Spain’s pension crisis reflects its crisis of faith

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[…] On the other hand, Spain’s pension system may not be far from systemic failure.  As in the United States politicians have raided the pension system’s reserve fund, created in 1997 by José María Aznar’s center-Right government. This month alone the government withdrew €3.6 million from the fund’s coffers in order to provide an extra payment to recipients before the Christmas season. The fund is being drawn down despite the fact that, in 2011, the left-wing government of José Luis Rodríguez Zapatero raised the retirement age to 67. Still, not one mainstream politician from the People’s Party (PP), Socialist Party (PSOE), Citizens (C), or PODEMOS are asking for deep reforms to the system.

Their only solution so far has been more taxes – something the PP and PSOE agreed to last month. But families and businesses are already suffering the consequences of high taxation. Every Spaniard works 178 days of the year to pay taxes, according to a report from the pro-market think tank Civismo. The tax burden is so high that it is impeding economic growth, and economic growth is the key to lower unemployment and wealth creation. Judging by its temperature on the Heritage Foundation’s annual “heat map,” Spain could be considered one of the European countries closer to the status of tax Hell.

Despite the heat, Spain is feeling the chill of “demographic winter.” According to Eurostat statistics, Spain has the second-lowest fertility rate in the continent (beaten out only by Cyprus). Nevertheless, there is no plan to boost the nation’s fertility rate through tax reform nor a courageous and strong promotion of pro-life and pro-family values. Instead, politicians are trying to respond to the nation’s population woes through immigration policy, including accepting more so-called “refugees.” […]