A recent report in this newspaper about possible cuts to the State pension raised the hackles of the usual suspects.

The drearily familiar response is now a fixed part of our national economic debate: unless the proposed policy involves higher Government spending and raised taxes it represents an assault on the rights of the Irish people.

Pensions have now joined free water as a fundamental human right, something that will no doubt come as a pleasant surprise to the majority of the world's population with access to neither.

The State pension is one example of a more generic problem: the unfunded political promise that is easy to grant but next to impossible to take away, even partially.

Joan Burton is right: this Government won't cut pensions. The arithmetic is such that it won't have to: there will be no pension time-bomb exploding in the next 18 months. Indeed, it is a misleading description of the problem. This is not something that will suddenly explode in our faces, rather a series of tremors, some of which have occurred already.

The recent settlement at Waterford Glass is a case in point: pension rights accrued by workers turned out to be aspirations rather than cast-iron guarantees. Too many schemes have liabilities – future promises – greater (often much greater) than the assets backing those promises.

The State pension scheme, originally invented by Bismarck in the 1870s, came with a biblically-inspired retirement age of 70. The UK (and Ireland) adopted a means tested five shillings a week pension for the over-70s roughly three decades later. Needless to say relatively few people lived to collect their pension.

Next year sees more than one important 100th anniversary: in 1916 the retirement (pension eligibility) age was lowered to 65 in Germany. Many countries and companies adopted 65 as the default retirement age over subsequent decades.

Pensions were designed to be paid for two or three years to the few people lucky enough to be in retirement before they died. They were intended to be paid to a small minority. That we are all living longer is well known, welcome, but, in this context, hugely problematic.

Modern economies

Pension promises, as currently constituted, simply cannot be honoured when the ratio of pensioners to workers explodes as it is, to varying degrees, in most modern economies.

Ireland is actually in good shape relative to some other countries whose demographic problem is much worse than ours. This should not be a source of complacency, nor should it be used as an excuse to put off difficult decisions.

Many pension schemes are now broken. Some are beyond repair. In the US whole cities are threatened with insolvency by hopelessly unrealistic pension promises.

The state of Illinois is one of the biggest problems, with liabilities approaching $170 billion on some calculations: over a quarter of tax revenues are already devoted to pension-related payments.

The relatively muted protest over our own musings about pension cuts is probably in part prompted by the simple facts that we have known about the issue for some time and all of the big problems still lie in the future.

The costs of broken pension promises will dwarf any water charges. Unlike water, pension problems are easy: we deal with them by changing the subject.

The UK and Ireland have legislated to raise the retirement age. It will rise further. Whoever forms the next government I bet that one of their earliest decisions will be to announce further increases in the pensionable age: the briefing documents will present arithmetic that is stark enough to prompt action from any politician, of whatever hue.

New attempts to get us all to save more for retirement are inevitable.

Someone has to pay for pensions. For the public sector and the State pension that someone is the taxpayer. The idea that we are all “paying into” pensions is mostly false. For the majority of people, their pension depends on the goodwill of future taxpayers: there is no fund, no pot of savings.

Pensions are one aspect of a never-ending debate over fiscal priorities. Most of us realise that an infantile framing of that debate will get us nowhere: the single transferable answer – more spending for me, higher taxes for you – does not solve the basic arithmetical problem of far too many existing unfunded promises, let alone new ones.