Intergenerational inequity and state Ponzi schemes

Quote
"A son can bear with equanimity the loss of his father, but the loss of his inheritance may drive him to despair."  Niccolo Machiavelli (1469-1527)

News
In a high profile BBC lecture this week, TV historian Niall Ferguson addressed one of the biggest relational crises in the Western world: intergenerational inequity.  Broadly speaking, the baby-boomer generation have amassed most of the fruits of decades of stability and prosperity, then arranged for generous retirement benefits in pensions and healthcare. 
 

But now stagnating, high debt economies coupled with declining birth rates have changed the maths.  The financial burden falls on the next generations of taxpayers – whose own prospects are decidedly gloomy with housing costs, student debts and graduate unemployment high and rising.
 

Ferguson pinpointed the burden of vast, unfunded liabilities of most Western governments that don’t appear on the national accounts – promises of welfare payments in the future to an ageing population, liabilities which will have to be met by younger generations.  And that is without taking the national debt into consideration, which the next generation will also be obliged to pay for.  The state is effectively operating a giant Ponzi scheme.
 

Edmund Burke, in his “Reflections on the French Revolution” argued in 1790 that the most important social contract was not Rousseau’s one between the monarchy and the citizens but between the generations: “The state is a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born." 
 

The concept of sustainability has corrected much short-term thinking regarding economic and environmental impact of policies and decisions; it’s time to listen to Burke again and consider the condition of intergenerational relationships.   They hold the key to the sustainability of whole societies.
 

Read on…
Not everyone agrees with this rather negative analysis of the baby-boomers.  To find two lists of articles arguing the different sides of this particular debate, and a good introduction to the issue, visit the debating matters website here.
 

Walk the talk
To what extent do you understand the hopes and fears of other generations, beyond your own family?  Is there something you might do to put yourself in the shoes of school or college leavers to get a better grasp of their responsibilities and prospects?
 

The last word
From the Bible, Proverbs chapter 13, verse 22: ”A good man leaves an inheritance for his children's children, but a sinner's wealth is stored up for the righteous.”