by Nicholas Dunbar and John Foley
Reuters/New York Times
November 28, 2010
It is not just America’s retirement system that will struggle to make ends meet in the future. Europe faces similar potential trouble. Economists are trying to evaluate pension promises and tax revenues and compare them with today’s more visible debt burdens in the region. The current woes pale in comparison.
Those who are currently European paragons of fiscal virtue are only a couple of decades away from becoming indistinguishable from basket cases like Greece, according to a recent Standard & Poor’s study. For example, Austria, which currently has debt of just 72 percent of its gross domestic product, would see government borrowing balloon to 329 percent of G.D.P. by 2050 if it honors promises to its aging population.
It is easy to dismiss this forecast. After all, S.& P. concedes that its gloomy projections apply only if no reforms take place.
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