“The second reason is economic. When the birth rate drops below replacement, the population ages. With fewer working people to support more retired people, it puts a crushing tax burden on the smaller group of working age people. As a result, young people delay marriage and having a family. Once this trend starts, the downward spiral only gets worse. These countries have abandoned all the traditions they formerly held in regards to having families and raising children.

The U.S. birth rate is 2.0, just below replacement. We have an increase in population because of immigration. When broken down by ethnicity, the Anglo birth rate is 1.6 (same as France) while the Hispanic birth rate is 2.7. In the U.S., the baby boomers are starting to retire in massive numbers. This will push the “elder dependency” ratio from 19 to 38 over the next 10-15 years. This is not as bad as Europe, but still represents the same kind of trend.

Western civilization seems to have forgotten what every primitive society understands; you need kids to have a healthy society. Children are huge consumers. Then they grow up to become taxpayers. That’s how a society works, but the post-modern secular state seems to have forgotten that. If U.S. birth rates of the past 20-30 years had been the same as post-World War II, there would be no Social Security or Medicare problems.”

Excerpt from an article- A Global Intelligence Briefing for CEOs by Herbert Meyer

Just a few days ago, CNA reported the impending change in the CPF policy to permit Singaporeans to withdraw their CPF minimum of $100K only when they have reached the age of 65. This is another increase from 62 with the original permitted age being 55.

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Mr Lim Swee Say was quoted in the report saying:

“25 years ago our life expectancy was less than 70 years old. Today, 25 years later, our life expectancy is about 80 years old. I’m very sure that 25 years from now, our life expectancy could be 85 or 90 years old. So we have to ask these very tough questions… will Singaporeans have enough savings and earnings to see him or her through this longer life span? If the answer is yes, then none of us need to worry, but I don’t think the answer is yes.”

Personally, Mr Lim’s statement gives the impression that the gahmen is doing us a favour by extending the age policy in order we can save enough for our lives. But since when has it been the gahmen’s priority to be concern if we are saving enough for our lives? 

And to be honest, Mr Lim’s reasoning in favour of the impending policy change isn’t all that convincing:

“If you continue to have an income, you can defer drawing your CPF by another two to four years. This way, by the time you really stop working, there will be more money in your CPF. You can also earn interest in your CPF account.”

Duh….

If we relate our situation with Herbert Meyer’s theory from the excerpt, then the rational behind this impending policy change could be due to the lack of babies that Singaporeans are producing. More Singaporeans equal more taxes. So in order to ease the tax burden on the younger age people which might be us or our children, the retirement age is extended.

As the US are navigating their way through a social security crisis with their baby boomers and 401K , I believe our gahmen are watching them closely and taking steps to avoid a similar plight. Hence, this highlights the gahmen’s changed of stance in 2004 to encourage more babies in Singapore. 

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I wonder what would the response be from the Singapore baby boomers if they knew the real reason behind the reason?