The subtle ignorance of La Prensa newspaper

in a recent one article published in La Prensa newspaper entitled “15 Key Points to Understand pension system, eagerly trying to show that a pension model based on individual accounts, as well as their private management, is the only way forward for solving the social security crisis. It is not only a failed attempt, but also a demonstration of the ignorance that characterizes this newspaper on the subject.

That’s right according to the analyzed article we should models of solidarity are unfeasible, with regard to the extension of the life expectancy of the population. This contains two errors. First of all, it is not true that this type of model pensions are non-refundable. It is obvious that in La Prensa they ignore what Paul Samuelson He already showed in 1958, in the sense that the real profitability of this type of model is equivalent to the sum of the growth of employment for wages and the productivity of labor for wages. In the case of Panama, between 2009 and 2019, this total reached 6.2%, a figure well above profitability CSS financial funds. Obviously a problem here is that the style of development imposed on the country by the oligarchy meant that the benefits of increased productivity were not passed on to wage levels.

Second, thatanalysts of the newspaper La Prensa They also ignore that what matters for collecting quotas is the wage bill, which equals the number of workers multiplied by the wage level, so that a fall in the rate of growth of the wage-earning population can be offset by the rate of growth of the appropriate wage. Connoisseurs of the La Prensa newspaper should study the concept of the work the equivalent of Robert Solow.

Then it would be clear to them that this is the path blocked by the style of development concentrating and exclusive imposed by dominant sectors.

It’s even worse the prevailing ignorance in La Prensa about what Nicholas Barr in his article Pension reforms: myths, truths and political options” (2002) called “economy In it, the author shows that in a situation where employment and wages do not grow sufficiently between groups, the result for a system of defined accounts would be an inflationary situation or, in the case that funds are invested in financial assets, a serious reduction in possible pensions.

Of course, in La Prensa This knowledge is not beneficial to their interests, as it shows the importance of the country moving towards style democratic development, with social justice and respect for the environment.

Another element of ignorance found in the analyzed article is the idea that the state does not have the capacity due to the lack of resources to support the generalization and stabilization of the solidarity pension model. Two facts are being ignored here. First, that Panama Currently, according to CEPA Lthe country is in the region with the lowest ratio of tax collection – GDP, to which should be added the fact that it is tax evasion about 10.0% of GDP. Second, the problem of social security contribution evasion should be taken into account, which between 2015 and 2021 was B/. 3,035.9 million. As Goethe said “there is nothing more terrible than active ignorance”