Posted Mar 7, 2014 by Martin Armstrong
We are is the most serious crisis when it comes to pension plans. They simply do not work, are too expensive, and will collapse of their own weight. This is the decline and fall of Marxism. The real crisis will raise its head after 2015 and this is the very same issue that cause the collapse of the Roman Empire. As Rome could not meet its pension promises to its soldiers, two things developed. (1) there was a progressive trend of debasement as government tried to meet its obligations, and (2) many general revolted and we see a great number of usurpations of power and civil unrest as well as civil war. Armies began attacking any city that did not support their candidate and they sacked the cities for their payment.
Boeing is scraping its pension plan for 68,000 employees and it is moving to 401Ks. This will eliminate the worry going forward concerning its unfunded liabilities. This is the start of the trend and we will see a lot more of this as well as municipal governments collapsing as government employees discover they will not be secure in the future just as they discovered in Rome.
As the pension crisis hit Rome, then more and more people no longer joined the army with high expectations. The defenses of the Roman Empire declined as we are seeing today and as that declined, the barbarian invasions became successful. The government started raising taxes dramatically and that led to more corruption. The higher the taxes, the higher the bribes and corruption to escape them. In the end, people began just walking away from their property and the population of Rome itself collapse.