Socialized

We were out for dinner with friends who mentioned in passing that his wife was receiving social security (US equivalent of CPP), despite never having worked herself in the US. This triggered a long conversation and debate about how this could be possible.

It turns out that in Canada, CPP is completely specific to each member of a couple, with the exception of the death benefit. In the US, however, a spouse automatically qualifies for 50% of the paying-in member's benefit, regardless of whether they are alive or not, and potentially can start to collect before the other does.

It doesn't seem so extraordinary that there are large differences in the ways countries organize their pension systems. I guess it is like taxes, actually, I think of public pensions as a sort of reverse tax.

By the way, The Economist has written a few articles recently about how the US SS fund is going to run out of money in 6 years, nobody is paying attention, and it's going to be a big problem that can only realistically be solved with even more borrowing - the US is already running dangerously high deficits, almost unprecedented in peacetime (it's normal to run huge deficits during war). This combined with the ever shrinking appeal of US dollars is creating a real looming funding crisis.

With a little luck (OK, a LOT of luck), by then we will be back to a Democrat government, which will probably get the blame for this mess.