The Old Are Eating the Young | Hacker News Reader

The Old Are Eating the Young

bloomberg.com

338 pointspetethomas448 comments

Note that the article makes a crucial assumption: That all those unfounded future liabilities (most of which are pensions etc. I assume) of governments are fixed and cannot be changed. This isn't true, though: By changing the law, those unfounded liabilities can be erased at the stroke of a pen.

What does this mean? That these staggeringly high numbers (if true) do not necessarily mean doom but "merely" that at some point people will find out that the pensions they have been promised won't be there when they reach retirement. (I.e. what the people in Greece are currently painfully experiencing will eventually hit others, too - one pension cut after the other until little is left.)

This doesn't necessarily affect "future" generations, though: Those that will pay for it is the generation that lives through the cut, i.e. which has paid into the system before the cut but was due to receive money only after the cut. This can very well be a generation that is alive today.

Edit: Just to clarify - the article conflates these financial liabilities with environmental damage. Just to avoid confusion: obviously, environmental degradation cannot be erased with the stroke of a pen, the above is only talking about the financial side of things.

Being born and working in a country with a strong social system, this is just another positive for my current lifestyle: Just earning enough to sustain myself and paying only minimal taxes so as not to waste anything on benefits I will never get back!

Now I made myself sad...

If everybody behaves like you then the above comment becomes a self-fulfilling prophecy...

Maybe, but the blame for this situation can't only be placed on the young who see the system failures approaching. Maybe a system built to provide care to its creators is fatally flawed if it is largely dependent on the consent and participation of children and unborn people of the future?

At which point I would like to point out that this world can likely provide for everyone were the economic ideology focused on sustainability and maintaining (at least) baseline human resource needs instead of demanding permanent growth, potmarked by boom-bust crises every 10-20 years.

I was also born in a country "with a strong social system". The so called social system is in shambles, and contributing to it is basically contributing to a ponzi scam.

I think that's what grandparent is getting at. Better to make use of the social system by working little or not at all, now, while it's still paying out, than to contribute now and not get any pension later.

How can it have a strong social system with minimal taxes?

I think his point is that he avoids paying high taxes by not earning much.

Do other people feel this way in regards to social benefits?

At least in my line of work, earning more money has much higher value than earning less and having assistance.

An example from Belgium. Imagine you're an employee and earning 38k€ a year including bonuses. Now you want to start a side activity as an independent contractor. You pay about 53.5% of taxes on this amount. On what is left after taxation, you pay 20.5% social contributions that you get literally nothing in return for. If you choose the cheapest "social contributions" provider. That means you get to keep about 36.96€ for every 100€ in pretax profit.

Don't you think this steers people in different directions?

Wouldn't the equivalent contractor wage factor those costs in though, plus a risk premium for short term work ideally

What makes you think it would?

The fact that they have to actually hire people for the position, and therefore need a decent value proposition?

When the costs of hiring for the position are much higher, "need to hire" can start to look fuzzy. Just like the "need to buy a soda" is different at $2 and $20. Demand for labor is at least somewhat elastic.

It really depends on where on the range of earnings you are. In Germany earning minimum wage nets you virtually the same amount of money as being chronically unemployed (when taking into account various benefits, like social housing and free transit for the unemployed).

And the benefits are regular and safe relative to a lot of badly paid work opportunities (especially they are not a regular full time job).

I don't think this makes as much sense as e.g. a programmer earning €50k/year vs €80k (especially if you're married with kids, which gives you huge tax deductions here).

Sure, earning money is nice, but consider this: you are just throwing 30-50% of your income away. When increase of 100% means 200% more effort, because you're throwing away 50%, you really start considering if the effort's worth it.

Also, at least where I live, we have our benefits capped. So I pay taxes proportionally to my income, but god forbid I get sick, get in accident, lose my job or have a child and take a child rearing leave - even though I've been paying full taxes >10 years, i get instant income cut by 50%. And don't get me started about pension - currently it's set at 75 years for males - and average lifespan is about 70...

So, to sum up, while earning more money, sure, is nice, but throwing the money you've earned fair and square down the drain to support society which will simply not support you is disheartening to say the least.

Hold on, your country has separate pension ages for each gender?

fair and square

And in those three simple words we encapsulate all of humanity's woes

I have to agree. I see this attitude in ever increasing numbers of German developers as our High-Tax System even openly admits to all the benefits you won't receive.

The amount of taxes one has to pay compared to the security one is offered feels strongly out of whack for the 60-200k/yearly family salary bracket.

There is braindrain, but also Stockholm Syndrome. I oftentimes see discussions between developers where ones that have left Germany's system get attacked behind their back for being so "irresponsible" and missing out on security systems here, while enjoying, after about two to three years of saving money elsewhere a lifestyle of financial security that is leagues above everything the german social security can offer. There are lots of reasons to stay in Germany, but social security and finances aren't ones if you are a talented developer that is just looking for a good life.

It's a strange tension currently, I'm unsure where this will lead in the long run.

Can you please explain a little more? I always thought Germany (and Scandinavia) to be a strong economy where although you pay a lot of taxes, the returns are extremely well in terms of childcare, hospitalization, etc.

I assume they compare it to upper-tier high-tech hubs like Silicon Valley, Boston & Seattle - where a software developer can earn well into 6 figures (and double or more of what they'd earn in Germany).

But I suspect this is mostly limited to those and very few other cases (e.g. top tier doctors).

Yes, but for how long? And what happens after you're put to pasture?

You can earn a lot more in the US when you're young (or at least, mid-career), but you'd better hope and pray that you never get sick, or laid off in late-middle age.

I've never lived in Germany, so I don't know the problems with their system, but the US system is (currently) a "get yours while the getting is good" approach to life.

Well, if you're German that means you move to Silicon Valley, make the big bucks for a few decades, then move back to Germany when your health starts to fail.

That strikes me as trying to claim the benefits of a system without participating in the costs.

(Unless you're suggesting that salaries are so disproportionately high in the USA that you can move here, pay all of your German taxes, and still be better off. In which case, I have to ask: what the hell is wrong with economics, and why is it leading to this obvious inefficiency?

I suspect the real answer is: "you can't actually do that.")

If you do it quite as cynically as that, yeah, that's sounds a bit dodgy - but the more common pattern, I think, and frankly more problematic for Germany, is the one where you go to Silicon Valley for a few years and try your luck, and if you're good (and lucky), make the big bucks and stay -- for all the badness of US health care, people who've made big bucks for decades are generally by a wide margin able to secure and keep really good health care. The people who aren't as lucky (and/or good) return and take up their €45k/yr careers.

I doubt that's a serious problem, given the odds against it happening.

Seems far more likely that someone would leave Germany, earn a higher salary in the US for a while, and return as soon as a serious health threat made the disadvantages of the US system clear.

Presumably Germany has some sort of system to tax imported wealth to handle these scenarios.

No, you can totally do that if you put up with the severe inconvenience of being an economic migrant for that time.

(Immigration bureaucracy, distance from family, working and living in your second language, navigating an unfamiliar system, immigration bureaucracy, and the risk of being arbitrarily deported)

I didn't say you couldn't do it, I said it was unlikely you'd get rich in the US (true), and there's probably a system to tax you on imported wealth (as there is in the US).

It is totaly possible to do that. The hardest part is getting a US visa.

Germany's tax system is linked to residence, not citizenship (unlike the US). Therefore if you move to the US and work there for a few years, you will not pay any German taxes during that period.

Therefore the "free rider" effect definitely exists, but I don't think it is a huge problem, because the numbers of people migrating out and in again are not that high.

While you do not have to pay the benefits for social security while abroad, you could and it's not even that much. One pays around EUR 12k / year for social security on a rather well payed software developer job (EUR 50k / year). Given a salary difference of a factor two or more, it is actually very much feasible to life and work in a US technology hub and pay for German social security. So the question "what the hell is wrong with economics" does remain.

If you think this is wrong, Poland is bordering Germany and has 1/3-1/2 the wages.

I think the answer to that conundrum is just that it takes a lot more time for things to even out than you'd think. It hasn't even been 30 years since the Soviet Union collapsed.

It is exploiting the system without paying for it, but there's plenty of that going in the other direction as well - educated eastern/southern europeans in their 20s coming to Germany to work with their childhood and education already paid off, pay Germany taxes for a few years/decades and then go back to their home countries.

Germany in particular gets a lot more economic immigrants than emigrants so it probably adds up as positive or neutral.

Yes, it's a free rider problem, and yes, you can do it provided you don't surrender your German citizenship.

That's certainly one perspective. But some people see it as less of a "get yours"/"hope"/"pray" game, and then the US system can be cast in a different light.

I am expecting that the good times in the US will continue for 10 more years at which point I will have enough saved up to retire[0].

[0] Assume that I make 150k a year and only live on 50k a year I can put the rest into index funds. In ~10 years my money will be producing enough money so that I can quit and live on 50k a year forever. See http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... for the math/justification.

1. Salaries are much lower than, let's say US or Switzerland.

2. Taxes are much higher then, let's say US or Switzerland.

3. Real Estate prices are totally out of whack.

So if you make 60k (a very good salary for an engineer even in a big city) and want to raise a family of four you are basically on the same level as a non-working immigrant family of four. But yes, you have access to schools, universities and health care.

The trend that people are leaving or looking for exit options is definitely significant accelerating.

In Germany, tuition is nearly free or minimal, especially compared to US. With the strong social net, I feel people can do almost anything they want there, depending in some part on their social status and ambitions, but they will neither get extremely rich nor extremely poor. Like the food, German life is quite bland as well.

"I feel people can do almost anything they want there"

'We have always done it that way and we will keep doing it that way'. There is very little chance for change and opportunity. Also, very little venture capital.

I don't live in Germany but I can now afford to buy a house. The reason I can afford this is: BECAUSE I don't live in Germany. Yet, buying a house or an apartment in Germany is totally off the table. Why?

1. I disagree with the unlimited immigration into the welfare state that will make the welfare state collapse and totally changes our non-violent open society into a more violent and tribal one.

2. Real Estate or "Immobilien" or "inmuebles" how it is called in other languages. A much better word than real estate. It means "Non Mobile". And currently real estate taxes in Germany are basically zero compared with let's say New Jersey. This will change. The government will sooner of later have to tax the shit out of the real estate owners. And again, it is NON MOBILE, while you can leave, your house can't. In my opinion it would be madness to buy a house there.

> With the strong social net, I feel people can do almost anything they want there, depending in some part on their social status and ambitions, but they will neither get extremely rich nor extremely poor

I hear that in Denmark as well, but I feel it's often accompanied by a very strong unspoken assumption around what, out of 'anything', one should want to do. Denmark is a pretty sweet deal if you have a decent income, property mortgaged to the rafters (the only real tax break is for interest payments) and a couple of kids in institution/school age (and healthy private pension savings). If that lifestyle does not appeal to you, you are going to be paying through the nose for frankly very little.

This also informs the "ambition" bit. Having high ambitions is firmly in the "should not want" camp, so not a lot of people seem to have them, and the ones that do certainly keep them private if they want to considered polite company. Every year around graduation time, the newspapers have a raft of op eds on how "straight A students" are actually miserable and missing out on youth, while the mediocre students are celebrated for knowing how to live and have fun.

"but they will neither get extremely rich nor extremely poor"

Which is probably a net positive, maybe even for the rich.

>Like the food, German life is quite bland as well.

American life is bland! I'm not sure we actually know a way to arrange society that allows for most people to have exciting lives instead of bland or miserable ones.

What's the alternative? Restricting basic needs like education and healthcare to well earning citizens?

As a german, of course I don't enjoy paying high taxes, but that changes quickly once you actually get sick. Your health and education should be taken care of regardless of whether you're a janitor or an engineer - or their child, which can't change that status yet.

Sure this is nice, but other European countries enjoy equal or better public health services with a fraction of taxes.

You're delusional if you think your 40% base tax is being mainly spent on education and the health system.

Yes, you're right, there's certainly some middle ground - I was rather thinking about the other extreme, like the US.

Taxes aren't that much lower in the US - it's just that what Germany are spending on social programs, the US spends on estabilishing and maintaining world domination (via the military).

What is the bigger problem is that gross dev salaries are maybe half of what they are in the US.

I think the two might be linked. Maintaining world domination via the military effects the demand for engineering talent. It's not always direct; consider what Silicon Valley today would be if there hadn't been a DARPA etc.

Is military spending that large a percentage of US tax revenue? Tomahawk missiles and F15s aren't cheap, but I thought Medicare + Social Security chew up a majority of our tax dollars.

They do, along with other entitlements.

https://en.wikipedia.org/wiki/United_States_federal_budget

EDIT: Keep in mind that this is just the budget of the national government. Each state has its own budget that barely goes to military spending at all, instead focusing on entitlements, especially healthcare costs.

>Is military spending that large a percentage of US tax revenue?

Those $600+ billion have to come somewhere, don't they? And that doesn't even account for the unaccountable [0].

It doesn't look that bad in % of GDP because of the US's massive GDP, but in pure numbers, the US spends more money on it's military than the next 8 countries on the list combined.

[0] http://www.reuters.com/article/us-usa-audit-army-idUSKCN10U1...

[1] https://www.weforum.org/agenda/2017/03/the-us-spends-more-on...

Everyone recognizes that. They don't agree that the problem is the U.S. being war hungry as much as the other countries not being willing to chip in. Here's Obama on the subject:

https://www.theatlantic.com/magazine/archive/2016/04/the-oba...

""" “Free riders aggravate me,” he told me. Recently, Obama warned that Great Britain would no longer be able to claim a “special relationship” with the United States if it did not commit to spending at least 2 percent of its GDP on defense. “You have to pay your fair share,” Obama told David Cameron, who subsequently met the 2 percent threshold.

Part of his mission as president, Obama explained, is to spur other countries to take action for themselves, rather than wait for the U.S. to lead. The defense of the liberal international order against jihadist terror, Russian adventurism, and Chinese bullying depends in part, he believes, on the willingness of other nations to share the burden with the U.S. """

That's a narrative that works in the US and only in the US.

What are countries supposed to "chip in" for? The deterrence of a future alien invasion like in Independence Day?

Why should the world chip in for US Ambitions that result in massive destruction, like destabilizing the Middle East, while dealing with most of the brunt of the blowback of such US foreign policy decisions, in the form of refugee waves?

Nobody asked you to be "the world police" no matter how much you keep telling yourself that, "the people there asked for US interventions", is a tale many US Americans keep telling themselves to keep the "We are the good guys" narrative intact, but it has little to nothing to do with reality.

Because reality knows no "good guys" or "bad guys", in reality such terms are purely subjective. As much as I like the US as a country and it's people, there's a huge difference in perception in how US Americans see their country vs how the rest of the world perceives their country's actions.

Ugh, as a Pole in lived in Poland being a province of a Russian empire till 1989 and now am living in Poland which is realistically a province of US/EU empire. I much prefer the latter.

Amazing. Have Europeans forgotten the Iron Curtain and and, more recently, the Crimea already?

"Si vis pacem, para bellum"

how much would we all have to spend to reverse the re-annexation of crimea? clearly its not enough yet. or lets shoot for a resolution of the whole syria/iraq/israel/lebannon/etc thing. how much would that cost?

does that get paid to the US directly or do we all fund our own militaries that work...under US control? or based on our own ideas?

i'm just trying to figure out how this is supposed to work.

I don't think anyone is suggesting to chip in to reverse the annexation. The point is to have the military that could adequately protect against similar future encroachments.

I actually grew up on both sides of the Iron Curtain, maybe that's why I struggle playing along with this Star Wars like narrative which insists it's "good guys vs bad guys".

No place is perfect and how "bad" a place ends up, always depending on how much an individual adapts to the given circumstances of said place. This holds true regardless of where you are, a democracy, a dictatorship or anything in-between.

Btw: If you want to talk about Crimea then we first need to start talking about Kiev [0]. Of course, that won't happen because then the whole "Russia as aggressor" narrative wouldn't fit as neatly.

[0] https://www.theguardian.com/world/2004/nov/26/ukraine.usa

There might not be "good guys vs bad guys" but there is certainly a "better vs worse" and it's quite plain to see which side of the Iron Curtain, even after its fall, fared better overall, culturally, intellectually, and economically.

That "better" is worth defending against the encroachment of the "worse".

Going down to (relative) German level of military spending would free up around $350b (per year). That could go a long way towards improving various social programs. The other issue is that health care in the US seems ridiculously expensive (with doctors making 20x minimum wage and various insurance companies profiteering from a broken system), so in the end this money would buy less health care than in Germany. The same is true with higher education - it's free in most of Europe, but the conditions aren't nearly as lavish as in the US (so again, the money wouldn't improve the situation as much as it could).

"What's the alternative? Restricting basic needs like education and healthcare to well earning citizens?"

No. Especially health care is solved much better in most of Europe then in the US, where it is approaching 20% of GDP.

1. Higher wages but this is a tricky thing. Germany exports too much, both, goods AND capital https://thewisemansfear.files.wordpress.com/2014/05/dland_ku...

2. Lower taxes, especially income taxes.

3. Much lower spending on "social" which is approaching a staggering and unsustainable 1 Trillion Euro in Germany. http://www.preussische-allgemeine.de/nachrichten/artikel/soz...

As the first steps I would do:

1. Invest money into infrastructure which is crumbling

2. Invest in military. If you invest 1.2% of GDP in your military, as Germany does, you don't have a military, you have a museum. Actually, an argument that Trump got right in regards to Germany. (Hey, let the Americans pay)

3. European border defense. Germany has taken millions of illegal immigrants (illegals since none of them would have the right to be an immigrant based on Dublin III regulations). Most of them can't even read. They immigrate into the welfare state. I don't judge this, I would to the same in their position. Immigration should be strictly handled like in Canada or Australia.

Infrastructure spending is not the best way of propping up the economy. You get more for your buck by giving the money to the people who will immediately spend it. Germany doesn't need to increase the military. It's not running an empire like US. And doesn't need to find that kind of employment for the uneducated lower class. And Germany is what it is because of migrants. Do believe. And Japan is fucked because it's not accepting any.

"Infrastructure spending is not the best way of propping up the economy."

We were not talking about "propping up the economy", we were talking about sustaining it.

"You get more for your buck by giving the money to the people who will immediately spend it."

This is true. But by "importing all of India we don't make Calcutta rich, we make Germany a Calcutta" as somebody said.

"Germany doesn't need to increase the military."

Indeed it does not. Germany is in violation of her NATO contractual obligations. As long as she can "outsource" her defense and make the US defend her, maybe. In fact, Germany has no military anymore, Germany has a military museum.

"It's not running an empire like US."

She is unable to defend herself. Even Switzerland would be a formidable opponent in the current state. How many working tanks are left? 200 Tanks? How many helicopter pilots? http://www.n-tv.de/politik/Bundeswehr-fehlen-Hubschrauber-Pi... There is nothing anymore. And if you are German you will likely be able to understand the Latin saying: "Si vis pacem, para bellum"

"And doesn't need to find that kind of employment for the uneducated lower class."

What other options do you see for the millions of uneducated, low IQ (please refer to Wikipedia) immigrants do you have in mind? Most of them (75%) are supposed to be illiterate. Just social welfare and mosques?

"And Germany is what it is because of migrants."

Because of immigrants with a cultural similar background. Not because of a massive invasion of uneducated people from violent and tribal societies with a very different religion (I am agnostic). Why did the population of Christians in Turkey fall from 23% to below 1% in the last 100 years? Some things don't match and mix well.

"Do believe. And Japan is fucked because it's not accepting any."

Japan is a highly educated, highly industrialized, non violent, non tribal, quite egalitarian society with a tolerant religion. Yes, they are over-aging. But all industrialized countries are over-aging. So far it seems to me that the Japanese are doing the best for a soft landing. By the way, they are extremely restrictive to Muslim immigration. http://allfourestates.com/why-japan-has-no-islamic-terrorism...

You may also want to read this: http://www.martin-van-creveld.com/monsters-ii/

>Why did the population of Christians in Turkey fall from 23% to below 1% in the last 100 years?

Perhaps because 100 years ago it was still the Ottoman Empire, which was a far larger state incorporating many Christian-majority regions?

No. Because the same thing happened in all Muslims states.

I don't know about other states - haven't looked at those numbers. But your statistics about Turkey are deliberately misleading by an extremely large margin, because you are in fact comparing the demographics of the Ottoman Empire to the demographics of the modern day Republic of Turkey.

Well, the Armenians were Christians https://en.wikipedia.org/wiki/Armenian_Genocide

I'd say restricting fully government paid healthcare to citizens is a good step. For non-citizens (full time residents etc) the government would give basic healthcare, but anything elective or above the baseline should be funded by that individual.

In general I would say that most of social safety net benefits should be applied to citizens, and then be scaled down for the other groups of people living there.

Why should I get less than full health care if I pay the same income taxes and health insurance (15% of my wage on it's own)?

If you restrict services to permanent residents than restrict the taxes we pay as well (btw I'm 100% certain I pay more in taxes than I consume in benefits, and Germany didn't even have to pay for my education or early life).

I'm not saying restrict services to non-citizens, I'm saying do not have the government pay for those services for non-citizens. If you pay a private company for health insurance then you should be covered by that insurance for the things that the government won't cover.

This is one easy way that the government could cut health related costs.

But I am paying for these services, with 15% of my salary. Why should I have to additionally also pay for private insurance?

No, the Government of the place you are living is taking 15% of money out from your salary to pay for the services that it provides to both citizens and residents. It does not have to divide equally between the two groups.

> Germany has taken millions of illegal immigrants [...] Most of them can't even read.

[citation needed] Unless you meant "can't read German when they arrive"? What group/period are you even taking about?

This major [left wing] magazine says 2/3 can hardly read or write (in their own language). http://www.zeit.de/2015/47/integration-fluechtlinge-schule-b...

They also quote, 70% of refugees that started a "trainee" quit.

Not German. Many can't read or write at all, they are illiterate. So thinking they will master German in any reasonable timeframe and become employable is risky bet. They will need extensive training.

Don't overlook the inverse incentive created and psychological aspect of this equation. If you are the one working and at the same level as the non-working, there is a cognitive dissonance that cannot be easily overcome.

"you are basically on the same level as a non-working immigrant family of four"

That's an exaggeration. A non-working family (not sure what immigrant has to do with it) does not have access to the same quality of life than a working family with salaries of 60k. Sure, health and education-wise they both enjoy the same benefits, but for sure not in housing as you mention in your third point.

60k€ results in ~2900€/month after taxes for a married person. A decent appartement in a big sout/west german city for 4 people will easily cost you 1250€ or more. Subtract further costs for transportation etc. and your living standard is indeed not mich higher than that of a undemployeed family with free housing and welfare benefits.

But gotta feed them "refugees", eh?

I live in a decent apartment in a big south/west German city, I have a 60k+ salary and yes, I pay a lot in taxes and for rent. There's NO way I have the same quality of life as an unemployed family, while they might get some money from the state it's nowhere close to a 60k salary.

Now, where I do see the problem is that most of the housing is owned by people renting it out (check out Germany in this list [1]). My whole building is owned by the same guy who I guess lives quite a relaxed life out of my rent, while producing nothing. If you want to fight the increase in living costs, I'd start there.

I have no problem with feeding and sheltering refugees.

[1] - https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...

> Now, where I do see the problem is that most of the housing is owned by people renting it out (check out Germany in this list [1]). My whole building is owned by the same guy who I guess lives quite a relaxed life out of my rent, while producing nothing. If you want to fight the increase in living costs, I'd start there.

Because it's tax smart. If you own real estate, all repair, maintenance costs etc. can be deducted from your taxable rental income. On the other hand, if you live in a property you own, all maintenance costs are paid from your after-tax personal income.

Then close that tax loop. Easier, better, and more effective than blaming immigrants.

Its not a tax loop. And if the laws were changed, the costs would simply be passend on to the tenants, be it directly vor indirectly.

Laws do no change market realities.

Yes, we probably should ensure people don't starve to death in a modern society. What's wrong with you?

Besides crime and different values (women, gays, open society), Germany is one of the most dense populated countries and has 80 Million inhabitants.

How many immigrants do you want to accept? 1 Million? 10 Million? 100 Million? 1000 Million?

Based on the population and fertility rates of the middle east and especially Africa, 1000 Million (1 Billion) would be a number that is not impossible. But, don't you see a problem there?

I don't see a problem here

I agree that "the west" has a moral obligation to ensure people in other parts of the world are not starving to death. But: a 20-year old from Tunesia or Morocco is not starving to death in his home country, nope.

Where are you from man?

If he is accepted into wellfare (and the last number that I saw around 700000 had been accpeted) it is comparable. I posted it on HN and got downvoted. I will post it again:

60k is 2800 € net per month. A refugee on welfare would get approximately 400 per adult plus 300 per kid plus rent paid (and free insurance). For a family of four this is 1400 Euro. Let's assume 1000 for rent in a city. This is 2400 so basically the same that you have.

Can confirm that sometimes I have the impression that my SO's cousin is living quite a nice life (housewife, three children, husband's blue-collar salary) compared to us (childless, combined 6 digit salary, can't afford a 3 bedroom house without signing a 30+ year mortgage).

If you post this again and again please get your facts straight first: 2800 € is the amount for a single person. A married sole-earner in a family of four gets generous tax benefits resulting in 3300 € net (insurance included) plus 380 € child benefits. Substantially more I'd say.

Agreed. But please also consider the extra benefits for welfare recipients. Extra clothing support. Generous checks to buy their first furniture, laundry machine, TV. Maybe even a computer (not sure about the computer).

Fact is, even as a full working engineer your available money is not significant different. A policeman with two kids and his wife not working has less money as such a family living on welfare. In fact, he would qualify for subsidiary income.

And we are not talking yet about refugess with 4 wifes and 23 kids.... http://www.rhein-zeitung.de/region/lokales/westerwald_artike...

As a rule of thumb 2000 € can be used for four persons for initial furniture etc. After two months the 60k earner is ahead. Clothing is already included in the rates you posted (there is some additional clothing support if you get another, lower rate).

Police earnings are a bit complicated but basically everyone with kids gets more than welfare after initial training. Some young police officers from Berlin (rightfully) recently complained that they are below that but this is the exception.

Policeman compared to welfare (Sorry, Link in German): http://www.huffingtonpost.de/2017/03/13/gewerkschaft-polizei...

This is exactly the case I referred to in my comment above. As the article clearly states this is very exceptional and rightfully a problem.

> A refugee on welfare would get approximately 400 per adult plus 300 per kid plus rent paid (and free insurance).

Does it apply to refugees only, or to everyone?

That's the minimum amount you need to live with dignity in Germany as defined by the Federal Constitutional Court and thus applies to everyone although foreigner's are subject to certain restrictions. Many refugees get less than that.

In the former USSR, people were still getting their promised 60 rubles per month pensions. It's just that inflation had eroded the value of each ruble to where the government had no problem paying such an amount.

(Later, however, the government did increase many pension payments, from total penury level to grim survival level.)

They're on to that one. All of the "interesting" liabilities are indexed to one (or more - in the UK three) inflation measures.

And yet the pledge to link the student loan repayment threshold to average earnings was reversed almost immediately.

https://www.theguardian.com/money/2016/nov/22/student-loans-...

Pensioners have historically voted more than students and young people. If you don't participate in the process, you don't get fair treatment, unfortunately.

This seems to have improved somewhat in the 2017 UK election.

Only 57% of 18-19 year olds and 59% of 20-24 year olds voted.

https://yougov.co.uk/news/2017/06/13/how-britain-voted-2017-...

It's not like the consistent Tory voting pensioners were safe either. They tried to axe triple lock, the heating allowance and institute a new NHS tax this time around.

The heavily indebted young only voted in droves this time around because for the first time there was actually a party that actually represented their interests.

Both pensioners and students would be a lot more screwed right now if the left wing of the Labour party hadn't effected a successful takeover and shifted the overton window.

The Overton Window is a fascinating concept - I only encountered a reference to it in the works of Owen Jones ("The Establishment"):

https://en.wikipedia.org/wiki/Overton_window

I'm not sure they have shifted it significantly, if they had they would have won the election.

They ran on an unapologetically left wing platform and saw the largest increase in vote share since 1945, denying the ruling party a majority in the process.

You think the ruling party isn't going to react to that by moderating its position?

The Conservatives did so poorly because they had a lacklustre campaign, robotic leader, ill thought out policies and some brexit backlash.

I find it hard to believe the Labour left has shifted the public zeitgeist as they didn't win in a situation that could have been a walkover for a more moderate Labour.

>could have been a walkover for a more moderate Labour

This is absurd. Right wing Labour had been losing vote share steadily since 1997. The previous election was the worst result in 30 years and that is not because the Tories ran a great campaign. It wasn't as bad as this time but it wasn't good.

Most of Labour's losses wasn't even because people switched to Tories, it was just because people weren't motivated to vote for Labour. Scotland was completely lost to the SNP under Labour's right wing because the SNP ran on a platform of left wing policies.

This time around could have been a walkover for Corbyn if they weren't subjected to internal sabotage from the right wing of the Labour party, as Snowden pointed out:

https://twitter.com/snowden/status/872955838440329217

That same old story, if it wasn't for the right of the party, if it wasn't for the Murdoch press. You can keep telling yourself this but the fact remains that Labour are not in government despite the opposition having a disastrous campaign.

By the way if you look at the SNP actions it's pretty hard to argue they are left wing.

One of the controversial issues in the USA concerning indexing to inflation is whether the inflation index itself is manipulated, thus showing a lower rate than exists.

In some jurisdictions, pension guarantees have constitutional protections that may not be erasable by simply passing a bill [1]. While an amendment to the constitution (the CA state constitution, in the case cited) at issue would fix this problem, getting such an amendment passed would not be easy — at least not while many pension recipients are still alive and voting. Senior citizens generally turn out to vote more than other groups, and when their pensions are at risk you can bet they'll show up in force.

1: http://reason.com/blog/2016/11/30/california-supreme-court-w...

"In some jurisdictions, pension guarantees have constitutional protections that may not be erasable by simply passing a bill."

You would be surprised what bills can be passed. The 3rd Reich ("Nazi Germany") was supposed to last one thousand years by the way. It didn't. And in the end laws won't enable to circumvent the laws of nature (limited resources).

> Note that the article makes a crucial assumption: That all those unfounded future liabilities (most of which are pensions etc. I assume) of governments are fixed and cannot be changed. This isn't true, though: By changing the law, those unfounded liabilities can be erased at the stroke of a pen.

Easier: default on the debt made by previous generations. No law required.

If only one country defaults it's going to be hard for them, because the future lack of trust and the inevitable retaliations. If a large enough number of countries default, it's different.

The problem is that if they default and start borrowing money again then it will be in vain. Some debt is inevitable (think mortgage to buy a house) but debt for everything is too much despite being convenient: get the money now instead of with next year's taxes and possibly get as much money as the larger country next door (a competitive advantage but be wary of interest rates.)

> Easier: default on the debt made by previous generations.

Previous generations didn't leave us with much debt. Half of the debt is from post-2007. 85% or so came after 1990.

Previous generations were actually good stewards compared to today.

Not if they led us toward this

inflation distorts these numbers pretty massively. Especially when you consider something like "quantitative easing" to actually be causing massive inflation, but not visible to consumers in anything except housing, health care and education (all three are not tracked by typical inflation indicators either). The reason that traditional indicators are not being touched is that money is being sucked out of peoples pockets by the aforementioned three factors faster than printed money can inflate them.

Most of the money printed is also after 1990.

> actually be causing massive inflation, but not visible to consumers

This is like the "dark matter" theory of the universe, but without any evidence.

(The conventional explanation for health and education cost increases is "Baumol cost disease" due to non-automation.)

Its tough to explain why housing costs are exploding all over the country, year upon year, almost everywhere (NOT just popular to move to cities like SF and NY), double digit numbers without asking where all the money is coming from.

I wont deny that cost disease likely has a role in the rising costs of education and healthcare, but I don't think its a controversial statement that rising real estate costs play a role in that too.

Unlike dark matter, we can measure the money. Take the M2 monetary aggregate ( https://fred.stlouisfed.org/series/M2 ). Unless the US has doubled the amount of resources since the financial crisis, the value of the dollars should be reducing vs goods or assets, as the supply of dollars is increasing rapidly.

Yes, and we can also measure the inflation rate, which is pretty flat: https://tradingeconomics.com/united-states/inflation-cpi

So why don't these two line up? I submit two candidate explanations:

a) inflation is actually more an exchange-rate phenomenon, especially vs the dollar, so printing dollars or virtual M2 dollars makes remarkably little difference;

b) CPI does a poor job of capturing cost-of-living due to housing.

Mortgages to buy houses are not at all inevitable. Arguably they're the root of most of our debt issues.

"Arguably they're the root of most of our debt issues."

Are they? Growing debt is necessary for a growing economy in a debt based society (AKA capitalism). It was the housing debt bubble that kept the economy going (by increasing debt), it was not the housing bubble causing the problems.

"The question is: when do we reach the point that oil supply is growing too slowly to produce the level of economic growth needed to keep our current debt system from crashing?" http://www.resilience.org/stories/2014-02-12/limits-to-growt...

> Growing debt is necessary for a growing economy in a debt based society (AKA capitalism).

You can also increase the velocity of money; the economy is the product of the supply and the velocity.

> It was the housing debt bubble that kept the economy going (by increasing debt), it was not the housing bubble causing the problems.

A bubble is a problem almost by definition.

"A bubble is a problem almost by definition." Define a "bubble". Capitalism, a debt based driven industrialized society (high capital requirements and pre financing for the production of goods) is a running bubble. You always have to create a bigger one. And that "most money was printed the last 10 years" is just a consequence of this.

> Define a "bubble".

When overvaluation falls into a self-reinforcing spiral. Of course overvaluation is only obvious in retrospect. But our industrialised society has delivered a lot of very real quality-of-life improvements, so I think the value is real.

By definition, a society based on debt has a negative net worth on the books.

The only people who can logically value the perpetually indebted existence of billions of people and the massive leverage that comes with that as a net gain are the central banks to which the debt and interest is owed.

"By definition, a society based on debt has a negative net worth on the books."

No. One man's assets are another man's liabilities. And debt creation is always based on a better tomorrow. Why most big companies (there may be very few exceptions) have a shitload of debt? Even Oil giants have a tremendous amount of debt. Debt is always paid back with more debt (in hope of a better tomorrow). This systems works extremely well as long as tomorrow IS better than today. It will collapse, it must collapse when the growth stops. In this regard, Ludwig von Mises was actually wrong since he always describes perfectly a middle ages based trading and marked based society but not capitalism (so after 1750). He also dreamed of "treasure boxes" that entrepreneurs must have in their cellars to do investments. There are no treasure boxes and it is the pressure from debt that give us this tremendous dynamic.

Let him speak for himself: http://www.azquotes.com/picture-quotes/quote-credit-expansio... He is right with that. But what he does not say is that ALL booms bring a credit expansion. This is the very inherent thing of a boom.

Small joke on the side:

"Net worth": http://christianfinanceblog.com/wp-content/uploads/2009/03/n...

>One man's assets are another man's liabilities.

Exactly. National debt is a liability for the nation. It's an asset for the central bank which created it. Ipso facto the central bank owns the nation.

Mortgages provide the means for many people to own the place they sleep, and where they keep most of their property, so I think mortgages are a good thing.

It's a funny kind of "ownership". If they can't pay because they lose their job or the like they'll be kicked out of their home same as someone who's renting. And then people achieve ownership and independence right at the point in their lives where they should be looking to build tighter ties and preparing to rely on others.

"default on the debt" == "invalidate government bonds" == "blow up everything dependent on treating those as relatively safe assets" == "massive losses or bankruptcy of private pensions and insurance companies"

The Argentinian bond default from the early 2000s is still being litigated.

"at some point people will find out that the pensions they have been promised won't be there when they reach retirement."

One might argue this has already happened in the US, just subtly. Inflation (mostly ZIRP driven) has been very high, and is a hidden tax on those with fixed incomes. Perhaps headline inflation indicators are not high, but just look at the largest component of spending (rent) and you realize how difficult it must be to live on fixed pension payments. As a double whammy, seniors who tediously saved money hoping to earn interest income in their later years, find that income yield is near zero. This doesn't even consider the other major component of spending (healthcare)...

> Inflation (mostly ZIRP driven) has been very high

Totally untrue. In 2013-2016 inflation was lower than at any time in the last half century. 2017 has been a bit higher, but still lower than all of 1967-1996. Sure, you can cherry-pick a particular commodity in a particular market to make it seem otherwise, but momentary or local fluctuations in supply and demand aren't really inflation. Inflation is a systemic phenomenon, and it's actually at historic lows. The fact that some people make life choices that subject them to rising costs doesn't really have anything to do with inflation.

http://www.usinflationcalculator.com/inflation/historical-in...

Whatever inflation is being measured should be linked to the choices people are making, otherwise what is the point of measuring it?

You need to get higher education, at least bachelors if not masters level, in order to secure a decent income. The cost of this higher education increases at a ridiculous rate, and it's one of the biggest purchases a young person makes.

Then you need to live near a city, the bigger the better. That's where all the jobs are and since work is much more fluid, you need to be where there are many employers. Also, you the advantages of networking capabilities in cities will give you a shot at going big. Living costs near large cities have also increased at a rapid pace, whether it be a home or rental. If you're going to have kids, you want them in the best schools, so you pay high property taxes or pay for private school. Best thing you can do to increase the odds of financial success for your kids is to make sure they go to school with other rich kids and have an wealthy network.

Then you get start getting sick and need medical care. This is also one of life's huge, unavoidable expenses. There is absolutely no way inflation is low for you if you depend on certain medicines, just read the headlines, the price could skyrocket anytime if the patent holder chooses to.

> need

I think we are confusing needs with wants. All good things, but all choices, not requirements.

The data I have seen shows a considerable earnings and wealth gap for those who did make those choices versus those who didn't. No one needs anything other than a cave in the woods with some squirrel meat every now and then, but assuming you are like most people and want to land an attractive mate and secure heat and air conditioning and a future for your children, then you probably want to place your bets accordingly.

> earnings and wealth gap

But does that translate into a quality of life gap? It might not, and needing more earnings/wealth to pay for the same quality of life doesn't make it a rational choice.

Inflation measure (CPI) doesn't include real estate (and stocks etc), a single biggest cost young people will have to face in life. Unless they want to rent forever (and rent prices are not included in the official inflation rate either as social housing is over represented). So I can't take such inflation reporting seriously as that's a major omission.

And young people are the most affected by this shady way of calculating inflation as they are the ones that need to buy real estate to get on the property ladder.

>>> The fact that some people make life choices that subject them to rising costs doesn't really have anything to do with inflation.

Buying a house is not a life choice. It's a necessity.

> Buying a house is not a life choice. It's a necessity

Buying a house in a place where real estate will be your single biggest cost is indeed a choice. The way inflation is calculated might not be perfect, but let's not try to make it even more imperfect in a different way.

EDIT: also, even with housing factored in, inflation is still low.

http://cepr.net/data-bytes/prices-bytes/prices-2017-06

Well couple percentage points make a huge difference cumulatively. 2-3% over 10 years adds up quickly.

I don't agree with your opinion though. If you are career oriented and want to be successful you will be drawn to big cities as that's where the best jobs are and where you can get ahead a lot. And real estate is very expensive there. I do think in rural areas it's also your biggest life expense as incomes are lower there. So it's the biggest cost item irrespective of where you live.

> 2-3% over 10 years adds up quickly.

So do those 10-50% raises over ten years.

> If you are career oriented and want to be successful you will be drawn to big cities as that's where the best jobs are and where you can get ahead a lot.

There's a grain of truth here. I'm able to work remotely, and just in the past month I've worked from a variety of different kinds of environments in four states. However, that's because I've built a skillset and a track record by working in close proximity with others at a bunch of startups plus a couple of larger companies. I understand that not everybody has that option.

However, even within a big city you have a choice of where to live. The crappiest place I ever lived was right in the heart of a big city. I've lived in crummy places, tiny places, places with awful commutes, places with multiple roommates to defray the cost. Those were my choices. You might make different choices, but they are still choices. People who make far less money than we do can still find places to live where they can come in every day to clean our offices, cook our lunches, teach our children. If they can, so can we.

It's amazing what you can do if you don't enter the rat race of who has the biggest house, takes the best vacations, knows the best restaurants. There will be time for that, after you've built your base. The first few years after college are still part of the foundation-laying stage. You shouldn't expect to be better off materially, and often you'll be worse off for a while. That's life. At least it's not a permanent condition for those of us in tech, like it is for so many others.

It's somewhat true. I have worked remotely before. From my own experience I can charge about 2 times more when I can come to office in central London every day than remote. So that's also a trade off.

I could go back to remote and live in some cheap area but again I think it would hurt my career. The path to progression / promotion when working as remote employee is much longer. Being in the office and building relationships face-to-face, and learning how to navigate company politics is necessary to get to the next level.

"places with multiple roommates to defray the cost"

I had this perspective as well (in my 20s), until I had children. I supposed everything can theoretically be considered a want rather than a need. But how many people are really comfortable having roommates live with your family and children?

As for living in "the crappiest place", I lived in a pretty sketchy place during my childhood. We had metal detectors in our high school in Brooklyn. Reference: https://www.propublica.org/article/nyc-school-children-face-... You can consider wanting to go to a safe school a want (vs a need), but who doesn't aspire to that for their children?

> how many people are really comfortable having roommates live with your family and children?

Is it not also a choice when (or whether) to have children? I put off having any until I was well established, to make sure that I could provide for them without the kinds of tradeoffs we're talking about. It's amazing what a difference it makes to defer major spending - houses, kids, etc. - until you're further up the salary curve.

> who doesn't aspire to that for their children?

We can all aspire for many things, but we all have to make choices - where to live, who/when to marry, which job to take, which house or car to buy, which trip to take, which money to invest where, etc. Few of us get to have everything we aspire to, for ourselves or our kids. If safe schools are a priority, as I agree they should be, maybe some of those other choices need to be made differently. It's all about priorities.

The official inflation numbers in US are calculated in a rather dodgy way. You should read about that. Government statisticians take a very big effort to exclude a lion share of basic living necessities out of CPI calculation

> Government statisticians take a very big effort to exclude a lion share of basic living necessities out of CPI calculation

No, they don't.

Now, policy makers and media often highlight, and some programs are based on, the “core” CPI which excludes food and energy [0], rather than the full CPI, but since the data is collected by sector anyway, it's virtually zero additional effort to calculate the core CPI in addition to the full CPI; they are just two different aggregates drawn from the same base data.

The full CPI doesn't exclude “a lion share of basic living necessities” (it excludes taxes unrelated to consumer goods purchases, and that's about it.) [1]

[0] in principal, because of high short-term volatility of those components.

[1] https://stats.bls.gov/cpi/cpifaq.htm#Question_13

>Now, policy makers and media often highlight, and some programs are based on, the “core” CPI which excludes food and energy [0], rather than the full CPI

Well, yes. This is how it is

The point where the dodgy part is for example how they do weighting for things like housing rents, their criteria of non-comparable replacements, idea of product classes (an apple is not an inferior version of an apple; a car is a car invariably of it being considered luxury car or not) and so on. The CPI dynamic has real trouble reflecting real consumer spendings.

"What does this mean? That these staggeringly high numbers (if true) do not necessarily mean doom but "merely" that at some point people will find out that the pensions they have been promised won't be there when they reach retirement."

This is true. And since money, debt and energy are interlinked, it is very possible that there will be a cliff that we are approaching. Only two questions remain:

1. When?

2. How deep will we fall?

"There is No Steady State Economy (except at a very basic level)" http://ourfiniteworld.com/2011/02/21/there-is-no-steady-stat...

Limits to Growth–At our doorstep, but not recognized http://www.resilience.org/stories/2014-02-12/limits-to-growt...

Wealth And Energy Consumption Are Inseparable http://www.declineoftheempire.com/2012/01/wealth-and-energy-...

Galactic-Scale Energy http://physics.ucsd.edu/do-the-math/2011/07/galactic-scale-e...

> That these staggeringly high numbers (if true) do not necessarily mean doom but "merely" that at some point people will find out that the pensions they have been promised won't be there when they reach retirement. (I.e. what the people in Greece are currently painfully experiencing will eventually hit others, too - one pension cut after the other until little is left.)

Not only Greece; it's the same in Germany. People who have worked their whole life sometimes have a lower pension than they would receive if they would apply for welfare.

> By changing the law, those unfounded liabilities can be erased at the stroke of a pen.

True. However, the problem is: doing that will land a government in a world of trouble.

Firstly, the popular unrest. While in my country, it seems that most people under 30 don't believe the government pension scheme will survive to our retirement, people older than that do hope for their promised pension. After all, that's what they worked so hard and paid so many taxes for. Pull the rug out from under them, and my bet is you'll have riots in the streets[0].

Secondly, loss of trust. Kill off something as big as a pension scheme, and good luck in convincing next few generations to believe you if you want to reinstate it again.

[0] - Related - many young people will join too. While I fully intend to support my mother in her old age, if the government decides to take away her retirement money, I'd be pissed personally too - after all, they'll be impacting my finances as well.

Also related: that's why the loss of low-skill jobs by automation can't be ignored by people with high-skill jobs. Because after all, when your father, uncle, sister and closest friends will find themselves unemployed, who will they ask for help?

This is one of the major reasons why the UK Conservatives just lost the election, they attempted to

1) Maintain the ratio of working life to retired life by increasing retirement age in proportion to increased life expectancy. Which meant increasing retirement age to 67 by something like 2050.

2) Reduce the triple lock of pensions - which means the state pension rises by a minimum of either 2.5%, the rate of inflation or average earnings growth, whichever is largest - to a double lock, which only includes the latter two elements.

3) Means test the payment of winter fuel allowance, which is a yearly payment of about £300 made to everyone above a certain age, so that it would not be received by wealthy pensioners.

4) Put in place what was effectively an inheritance tax for payment of social care (i.e. care homes and in-home care) after death, which is currently both criminally underfunded and also massively expensive.

In combination, this is something like £15bn each year of extra spending now, rising to £50-70bn each year within the next 30 years.

All of these measures were opposed by Labour, and their most enthusiastic supporters are the young.

Put in place what was effectively an inheritance tax for payment of social care

This is the one policy of the Tories that I supported. There's been a massive transfer of unearned housing wealth to the elderly in recent years, owing to property price increases. It's criminal to tax young people to pay for elderly care, when those same young people cannot afford housing, housing that is owned by the elderly they'll be paying to care for.

This is exactly how the old are eating the young.

"This is the one policy of the Tories that I supported. There's been a massive transfer of unearned housing wealth to the elderly in recent years"

Nothing close to the size of the transfer from poor & middle class to the very, very rich.

"This is exactly how the old are eating the young."

The wealthy are explicitly trying to create a divide between young and old precisely so that the old can be relied upon to offer no resistance to student loan increases that soak the young while the young can be relied upon to offer no resistance to cuts to pensions and elderly care.

If young people are complicit in this game of divide and conquer they'll ultimately only hurt themselves.

How exactly are they hurting themselves when they can clearly see the impossibility of the system surviving long enough for them to benefit from it?

The Robber baron Jay Gould once put it as "I can hire one half of the working class to kill the other".

The middle and working classes are much less powerful political bloc if they are fighting each another (young/old). Hence the steady flow of articles like this one pitting "boomers" against "millenials" and vice versa.

The provision of decent pensions, free education and social welfare was affordable in the 50s-80s when the country was much poorer and the idea that it has become less affordable because we live slightly longer after many decades of massive economic growth is, to put it bluntly, economically illiterate. The money is there.

What was the difference in birth rates between 50s-80s and today? That's the more important metric in this case.

The dependency ratio went up from 15% in 1960 to 22% today.

The GDP per capita, by contrast, has increased 300% in 2005 adjusted dollars.

This is the metric that answers the question "why are pensions deemed unaffordable?", not birth/aging/death rates:

http://retired.talkingpointsmemo.com/images/productivity.png

This exactly: the old v. young issue is a deliberate distraction and divide-and-conquer strategy so the superrich can keep eating everyone else.

There can be more than one issue at a time, you know. It's pretty clear the increased ratio between pensioners and working people would be an issue regardless. Tax avoidance and the global race to the bottom is also a problem. I don't see why one precludes the other.

"I don't see why one precludes the other."

Sure, provided the title was changed to "the rich are eating the young and the old are doing slightly better than the young".

I don't think that was the impression they were trying to give though.

Oh, well, you're right about that, I just took as an assumption the title was humbug.

I remember reading that the average retired person in the UK earns more (higher _income_) than the average worker, so that's before you work out the 'wealth' bit.

And 80% of the country's wealth is with the 60+ crowd (this is getting worse, if anyone has stats that include 2015 / 2016 it'd be appreciated). As they've got both greater wealth and income than the young, and this is getting worse, I think it'd be foolish to call the problem a distraction.

>There's been a massive transfer of unearned housing wealth to the elderly in recent years, owing to property price increases.

Ok, that's got to be the weirdest mental gymnastics I've seen for justifying rich old people running the world. I'm also suspicious that's it actually true because I'm sure a lot of houses changed hands in the US housing crisis, and it probably went to real estate brokers who decided to rent instead of sell even after getting a bunch of houses in the firesale.

Even if old people realized those gains by selling their house (and going where?), it's not going to be enough money that they'd go out and start buying a bunch of other houses and charging outrageous rent. Certainly not enough to lord over sprawling apartment complexes filled with a bunch of millennial wage slaves.

Maybe, maybe someone in California bought a house for like 50k and turned it into life-changing millions, but to imply that's a massive transfer of wealth for entire countries is disingenuous.

Not sure how you think this was 'justifying rich old people running the world', rather it seemed to be justifying getting money to cover social care for old people, from the value of their house (after they die).

It's also in reference to the UK, where publicly owned housing was sold off to tenants in the 80s at below market rates, and housing markets have been booming ever since.

> housing markets have been booming ever since.

Petty sure 8 or 9 years of "emergency" low interest rates have had an effect in preventing the otherwise inevitable crash in prices.

The situation in the US is somewhat different to the UK, we are a densely populated nation and have significantly under-built houses for the last 30 years.

The UK isn't the same as the US, here house prices have doubled relative to wages almost everywhere in the country over the last few decades.

You're right in the sense that it isn't just a transfer of wealth to the elderly, it's a transfer of wealth to home owners, particularly in the prosperous parts of the country, and in the long run to their families. In the short term that's correlated although not matched to young/old, and it gets more and more fuzzy the further into the future you go.

Ironically in effect the left wing party just made a lot of political headway by allying with the right-wing tabloids to protect this inherited wealth against being used for care of the elderly. There are better ways of organizing it, but I didn't hear much nuance in the campaign against it, and I wouldn't be surprised if all policies even vaguely similar are now dead in the water.

>here house prices have doubled relative to wages Isn't it closer to tripled?

I thought (and I admit not to being an expert here) that one of the issues was that they were trying to basically bankrupt people who got a particular kind of illness.

Now, you might say, well they got a very expensive kind of illness, and so they should pay for it, because someone has to pay for it.

But, applying the "veil of ignorance" test, of not knowing whether you or your family will be struck by such a disease in the future, it would seem a system where everyone effectively pays insurance to guard against the highly negative outcome would be fairest and most sensible outcome.

I see parallels to the current healthcare fight in America, which seems to take advantage of people's strong belief that "it won't happen to me" to form policy, rather than actual statistics and a general right wing antipathy to these kinds of solutions. I guess it's easier to sell potential bankruptcy to people when they're young and healthy than a 100% certain tax rise.

> I thought (and I admit not to being an expert here) that one of the issues was that they were trying to basically bankrupt people who got a particular kind of illness.

It was nick-named 'the dementia tax', although that aspect of it was only half accurate, it depends on whether the case was severe enough to need to go into a care home.

Residential care (in a care home) already has to be paid for by the person receiving it. The difference is that now you have to pay the money up front until your assets go down to £23k, which usually means being forced to sell any property to release funds, whereas this bill increased the limit to £100k, and postponed payment so that it came out of your estate after death.

The major change was that care in your own home was going to be subject to the same system, whereas at the moment it is paid for by the state, albeit only available patchily. But a lot of this in-home care is going to be quite limited, I remember with my own grandparents the major help they received was someone coming in to give a bath once a week. That was probably only about £30 a week (£1500 a year) in costs, frankly it would have been better if they had received more care, and more money had come out of their property. If you are the child, and you begrudge £20-100k coming out of your inheritance so that your elderly relatives can be properly looked after, I don't exactly sympathize.

I agree with you about the insurance aspect of it, and that was what was recommended by a cross-party (that is, bipartisan) commission. The problem I see with that is that inheritance taxes are very unpopular, and the more you sever the link between the tax, and the thing that is being paid for, the more that people will object. But I agree that is what should happen, let's hope this 'dementia tax' label doesn't stick to those efforts as well.

I think inheritances are immoral :)

This is exactly how the old are eating the young

And yet, the young overwhelmingly voted for it! A paradox no?

Not necessarily. Usually older people vote in much greater numbers than the young.

Indeed... Simpson's Paradox I was referring to.

> these measures were opposed by Labour, and their most enthusiastic supporters are the young.

I wouldn't take many conclusions from the last elections. A lot of labour votes were actually "not-tories" votes. They didn't agree with Labour, but it's still better than the status quo.

Yes, nevertheless, conclusions will be drawn. Anything that could possibly be described as a 'dementia tax' is now dead in the water. That probably includes the cross-party proposals, even though they are incredibly important.

Well, that shows that Labour can run with a more left-wing manifesto and still capture the please-no-more-Tories votes.

> While in my country, it seems that most people under 30 don't believe the government pension scheme will survive to our retirement, people older than that do hope for their promised pension.

FYI and based on my anecdotical observations, mid- to late Gen-Xers rarely if ever think they'll get anything either. As to your finances when you'll need to support your parents or those of your spouse, IMO just try to get over it. You know it's coming anyway, and so do they.

What might be more concerning in practice as a society is what to do with boomers and early Gen-Xers who didn't make enough (or any) kids. Where before retirement plans it may have been for 4+ kids to take care of their parents, it's trickier when there's a single kid or none.

Aside: the Swedes, if memory serves, have an interesting take on retirement. Namely, there's a fixed-sized pot. What you get isn't based on how much you put in but rather on how much you put in compared to others. I'm pretty sure all countries in Europe with eventually adopt a similar system.

Disclaimer: I know about economy as much as the next guy.

Retirement pensions are one thing, the other is debt - whenever I hear that all countries are in debt I think of the law of conservation of mass and have an obvious question: who is this monumental, multiple-GDP debt owed to?

I figure it must be the private sector, but in such case - why are they lending? It looks like either there are people with resources they have no idea how to invest in something actually productive or there are people who knowingly choose to invest in this somewhat risky business of "pay companies to do something for the public now and hope that the public will return you more than the GDP of the whole country, maybe it will work out", which is how I see these big national debts.

Who are these investors and how hard would it be to make them cut their losses?

At the risk of committing a blasphemy against capitalism, could it be a sign of insufficient taxation of the proverbial "top 1%"? This doesn't necessarily need to be "top 1% individuals", maybe it's "top 1% companies" or "top 1% banks" or whatever. In either case, it appears that somewhere, someone has some big money which is being spent on public projects anyway but under the guise of an "investment" which may actually be a big dud.

It's banks. Our current capitalism functions on financial credit. Banks are lending all this money they don't have in hope that they'll get it back with interest. Everyone believes in it and I'd say that it's a form of modern ideology.

The function of private banks (apart of managing the system payments) is to arbitrate the creation of money when there is something deserving to invest. That's not a problem, or an ideology, is how the system works.

A different question is if they do a good work.

The debt levels are high enough that tax hikes would have to be very broad to close budget gaps. The top 1% can't make up these shortfalls.

Not advocating it, but what if we just confiscated their total wealth? "Eat the rich" and all that.

Hard to do legally, and if you do it illegally it tends to collapse the rule of law and result in investors fleeing.

Far better would be even small levels of property tax, land value tax, and (important for 21st century) intellectual property tax. IP licensing fees are a key component of how many big businesses shuffle money into low-tax jurisdictions.

Oh, and kill the tax secrecy havens. This is already starting to happen, but it's a very long slow process.

Unrest do collapse the rule of law for a shot time, but there is a problem. If investors start to flee then they stop being the top 1% earners in that place. Sooner or later the allure to earn money overrides the fear of loosing, and the cycle continues.

In a book called Debt, the First 5000 years they explore this concept and uses it to explain why nations tend to independently concludes that you must have laws that regulate lending. If not you get periodical unrest where the populace go and burn down the debt ledges, and in some historical places this happened as often as once every few years. Collapse of the law don't permanently scare away investors.

Not to say that unrest and collapsing the rule of law is a good thing.

In the Bible I think this was called a "jubilee"; debt was forgiven, slaves (some) freed every 20 years. I guess that in a high mortality society this makes a lot of sense - 90% of human assets will expire in that time period in any case so if you have the bad luck to live for 10+ years in slavery you deserve a break!

Just my opinion but I see this as leading to a depression. Who then manages those resources that were confiscated, many of which are likely the drivers of production (machines, mines, etc.) It would also place an imperative on the most creative to hide any assets they produce leading to a reduction in both the size and number of job producing enterprises.

I am not however, in anyway against a larger tax on the wealthy or at the very least the elimination of tax loop holes.

According to:

http://www.usdebtclock.org/

The US debt is now at roughly 20 * 10^12 USD, while according to:

http://www.economist.com/news/finance-and-economics/21631129...

The top 0.01% hold assets of close to 6 * 10^12 USD (371 * 10^6 * 16 * 10^3). Expand to the top 0.1 % and the number is 11.5 * 10^12 USD. Note that the article is from 2014, at the time the debt was at ~ 19 * 10^12 USD:

https://en.wikipedia.org/wiki/National_debt_of_the_United_St...

So simply taking everything from the top 0.1 % (not the top 1%) would cover roughly half the debt. Seems like an additional 20% taxation might make for reasonable down payment, though.

The problem arises when you assume that the debt of a country in its own money is the same that private debts.

When a private bank credit some household or business they get an asset (the debt owned to them) and a liability (the money they just created from nothing) that cancel each other. The entity receiving the credit have the same position but inverted. So, if you take all the economy, everything cancels to zero and not "law of conservation of mass" has been violated.

The debt issue by a country is a very different animal. In fact, probably we should stop calling it debt. When a government issue debt they are creating financial assets that allows the private sector to operate. An interesting mental experiment is to think in what would happen if all the governments pay all the 'debt' and stop spending.

Stephanie Kelton write about those things:

"Our challenge is not whether we can “afford” to make the payments we have promised to seniors, veterans, the disabled, government contractors, healthcare providers, bondholders, etc. (today, tomorrow and into the indefinite future) but whether we will be a productive enough nation to allow the government to make good on those promises without causing an inflation problem. That is the debate we should be having."

http://www.nakedcapitalism.com/2013/10/stephanie-kelton-how-...

In the UK the political parties are wed to a lock on pensions that keeps them tracking inflation. One of the parties tried to wiggle out of a small part of it in the recent election and it seems that was at least partly responsible for their poor election performance. It will be interesting to see how this plays out over time and whether at some point the dam will break and chaos will ensue.

At an individual level it's probably a good idea not to rely on the state for anything if you can manage that.

The point is that, the government, can always pay future pensions because it can issue money.

The question is: can do it without generating inflation?

It depends of the productivity of the economy in that future.

The conclusion is that saving money means nothing, what is really important is generate real wealth now so we can pay in the future without generating inflation.

So, investment in real capacity (creating infrastructure and knowledge) now will allow generate the real resources for "paying" in the future. Just the opposite of what they try to sell us.

Never mind how much money you save now if, in the future, there are not real resources for taking care of everybody.

In theory, you're right, but the way we measure things now basically prohibits that. Let's say we made sure, today, that "investment" were high so that it can produce the "output" that pensioners can consume. What would that look like, when it all plays out?

"You were promised $600/month. Obviously, we can't do that because that would require taxing 70% of labor income, which is way past the Laffer point. We're paying you $400/month instead. But it's okay, because we made productivity enhancements that let the same money go further. For example, the food tastes 50% better, so it's all a wash. Plus, you can move ten miles out to a cheaper apartment because construction and transportation are better now."

Strawman? A Federal Reserve banker tried basically the same thing to trivialize the inflation experienced by typical people: http://www.reuters.com/article/us-usa-fed-dudley-ipad-idUSTR...

if the government expend money in the economy beyond real available capacity (all else unchanged) we will see inflation.

If the government increase taxes in the economy in absence of inflation (all else unchanged), there is going to be a deflationary trend.

All the point of the argument is that if we have real available capacity in the economy you can spend, 600$ or whatever have been promised, and, if we don't have real resources available, we can't spend anything, never mind what have been promised.

It have nothing to do with how much money we have saved or how big is the deficit, but with the real resources available at the moment of paying.

>It have nothing to do with how much money we have saved or how big is the deficit, but with the real resources available at the moment of paying.

My point is that the obligation is phrased as "$600 + inflation index", not "the amount of utility you could have got for $600 at the time we made the promise". Improved productivity can help you meet the latter, not the former. The latter is a more reasonable promise, but the former is what was actually promised.

>All the point of the argument is that if we have real available capacity in the economy you can spend, 600$ or whatever have been promised,

It's not true that "if the real productive capacity is there, then taxing out the money for the pensions is no problem". The evasion behavior is non-linear and there's a cap to how much you can collect with taxes before e.g. pushing economic activity underground and into other countries. (Hence the Laffer curve point.)

> An interesting mental experiment is to think in what would happen if all the governments pay all the 'debt' and stop spending.

I suppose they would have to explicitly collect taxes to cover their current spending, not make bets on the future of economy. Isn't it how our civilization worked for a long time?

> Our challenge is not whether we can “afford” to make the payments we have promised to seniors, veterans, the disabled, government contractors, healthcare providers, bondholders, etc. (today, tomorrow and into the indefinite future) but whether we will be a productive enough nation to allow the government to make good on those promises without causing an inflation problem.

I don't really see the difference. If we are productive, the government can compel citizens one way or another to deliver on those promises. If we aren't, it can't and it needs to reduce them - either explicitly or implicitly by devaluing the money they are denominated in or any other creative way it could come up with. So sure, whether the government can afford future spending is the same thing as whether the economy will be big enough to tax it with fulfilling these promises. I think.

OK, so somehow I got back to making bets on future economy. But this time it appears to be a bet made to justify future spending, not current spending, so unavoidable.

"I suppose they would have to explicitly collect taxes to cover their current spending, not make bets on the future of economy. Isn't it how our civilization worked for a long time?"

So, If the government have pay all its debt and it's not spending anymore, where the money that is collecting as taxes come from?

" don't really see the difference. If we are productive, we can compel citizens one way or another to deliver on those promises. If we aren't, we can't and we have to reduce them - either explicitly or implicitly by devaluing the money they are denominated in."

The difference is what we should be doing now. Should we be reducing the deficit because we will "run out" or money?

or should we try to increase the future productivity creating infrastructure and knowledge?

What of the two options will make it possible to pay in the future?

"OK, so somehow I got back to making bets on future economy. But this time it appears to be a bet made to justify future spending, not current spending, so unavoidable."

I'm talking about investing in the sense of creating real assets. A bet and an investment are not the same thing, even if it is true that many 'investors' nowadays think that it is.

You added content to your post after I answered you, by the way. It's better if you answer in another post.

Part of "current spending" _is_ making bets on the future state of the economy. Governments build roads, dig ports, build new neighborhoods, etc. in anticipation of economic and/or population growth.

When a company lends money to do such that, it is called leverage, and considered a good thing because it allows them to make higher yields on their capital. Shouldn't governments be judged the same if they borrow money to speed up such developments?

> When a government issue debt they are creating financial assets that allows the private sector to operate. An interesting mental experiment is to think in what would happen if all the governments pay all the 'debt' and stop spending.

There's a great Planet Money about this, and what happened when the US paid off its debt in 1835:

http://www.npr.org/sections/money/2012/08/07/158376579/episo...

So I listened to this again and I feel compelled to update that it's merely a good Planet Money, not a great one. Not as much detail about the issue as I'd remembered.

> whenever I hear that all countries are in debt I think of the law of conservation of mass and have an obvious question: who is this monumental, multiple-GDP debt owed to?

Finally, someone asking the right questions!

The first observation is that if you try to tally "global debt" vs "global assets", a lot of it appears to be missing. This is because the ownership is obscured in tax havens. There's an excellent paper on this: https://gabriel-zucman.eu/files/Zucman2013QJE.pdf

The second observation is that the 2008 financial crisis put a lot of previously high quality government bonds in jeopardy, and we saw who the major bondholders were: banks. Banks are effectively required to hold bonds as "safe" assets to cover their liabilities.

> why are they lending? It looks like either there are people with resources they have no idea how to invest in something actually productive

This seems to be basically true, and is why there is so much SV money sloshing around. There's lots of investment that would be societally useful but the returns would not flow back to the original investor, so either it doesn't happen or elaborate schemes need to be constructed to bribe them with future taxpayer cashflow in order to make this investment.

> insufficient taxation of the proverbial "top 1%"?

Some of whom own more than the GDP of some small countries. And a few who have stolen a good fraction of the GDP of small countries.

> The first observation is that if you try to tally "global debt" vs "global assets", a lot of it appears to be missing.

Part of that comes through debt funding of future liabilities.

For example, if you invest $1M into a number of small businesses, those businesses make and spend money, buy and sell goods, hire people, and pay taxes in a variety of ways. Hopefully, they're a net positive in a variety of ways.

If you invest $1M into a bridge, there's no additional tax revenue, a brief burst of construction jobs, it will need maintenance, improvements, etc long term. You've created a net liability.

Therefore, many "global assets" simply disappear as time goes on while the debt/liabilities grow. This is why more and more cities are pulling in their borders (aka responsibilities) to let unsustainable streets crumble, water infrastructure collapse, and police/fire coverage dwindle. It's awful if you're in one of those de-annexed areas.

That's not at all what I mean: I mean the accounting entries for debt and assets.

If a bank lends a bridge-building company $1m, that produces a $1m liability for Bridge LLC and a $1m asset for Bank. (In fact slightly more, due to interest). When Bridge LLC spends money on concrete, its free cash goes down and its asset value labelled "bridge" goes up.

In the worst case, Bridge LLC spends the money to no effect and goes bankrupt - leaving Bank to take a writedown on the "asset" side of the loan. But until it does that the loan still exists as two sides held by the two companies which should have the same value.

The "missing" money is money owed where it is not clear from the outside statistical reporting where it is owed to - and in a global sense, the ledger must balance unless we owe money to aliens.

The PDF explains the methodology.

(An unsafe bridge may be a "liability" in the legal sense, but in any accounting sense it's an asset. Maybe subject to depreciation. But unless it's something that you owe to someone else, it's not an accounting liability.)

The ledger does not have to balance. If the probability of you repaying me is reduced I have no choice under accounting standards but to mark down the value of the loan on my books. You still owe me the money, but the asset on my balance sheet is a function of likelihood you'll go bankrupt.

>If you invest $1M into a bridge, there's no additional tax revenue, a brief burst of construction jobs, it will need maintenance, improvements, etc long term. You've created a net liability.

Not entirely true. If the net effect of the bridge is to connect two communities together more effectively then there may be people who pay property tax that buy land near the bridge, and then grocery stores, restaurants, barber shops, service stations and the like that spring up to serve those people.

A bridge, constructed in the correct location, can easily spur economic growth which can pay back both the initial cost for the bridge and provide enough tax revenue to pay for its upkeep.

"Who is this monumental, multiple-GDP debt owed to?"

Government bonds can be popular parts of the investment mix of private pension funds because they pay out in the currency that those pension funds will need to pay out pensions. That removes any risk of exchange rate changes (say that you know you will have to pay out a billion euros in pensions in the next five years. A mix of technology shares statistically will do better in the long run, but in such a short timeframe, it could do worse, especially if it pays out in US dollar, which may go up or down relative to the euro)

Also, for governments there is a fairly easy way out of last resort: print money. The resulting inflation effectively gives everybody a cut on the government debts they hold, without the government having to negotiate a deal on that cut (that only holds if countries write debts in a currency they control. Debts in euros are somewhat of an exception in this respect, as are the rare country bonds in foreign currencies)

who is this monumental, multiple-GDP debt owed to?

To our future selves. Why are pensions failing? Because in the past people moved the money from the future into the present (i.e. the past), and now we are in the future (i.e. the present) the money isn't there. Where is it? It was spent on crap rather than invested in assets. Oops.

> Where is it? It was spent on crap rather than invested in assets.

What makes something crap rather than an asset? How could they have done it "the right way"?

Governments spend a lot of this money on job creation. So the question is, what are those jobs? Are they creating value-adding infrastructure such as bridges and tunnels that accelerate movement between commercial centres? Or are they doing the equivalent of paying people to dig holes and fill them in again, such as employing huge bureaucracies to shuffle paper around and sit in meetings eating biscuits?

Another example is a person who borrows money and spends it on home improvements. He or she still has to pay back the money and the interest, but if the value of the improvements is greater than the cost, that money can be recovered later by selling the house. Or that person could have spent the money on... nothing. That might have been fun, but it still needs to be paid back...

A household an a government are very different things.

A government that issue its own currency is not limited in the same way that a household.

A government, that issue its own currency, could spend (constrained by the real resources available) without creating debt at the same time.

It's true that it would be wise to spend in creating more real capacity in the economy, instead of digging holes and fill them again.

Printing money inexorably leads to inflation. So the money might be there "on paper" but worth less (or even worthless). The net result is the same - money moved from the future into the present, then the same rules on how to spend or invest it apply.

"Printing money inexorably leads to inflation"

That's not true. Inflation could be though as a ratio between the money in circulation and the productivity in the economy. If you increase both, numerator and denominator you don't get inflation.

Also, "printing money" doesn't create inflation. Spending it when there is not enough available resources can create inflation.

If you have doubts, check the QE programs of the FED and the ECB (ongoing).

In fact, the more famous episodes of hyperinflation are originated because a collapse in the productive economy (the denominator), and not because an increase in money (the numerator).

If real resources are increased, a 'space' is generated for spending, and it would be a real pity if that opportunity is wasted.

Sure, I should have been more precise. If the productivity in the real economy is growing then of course the money supply should increase to maintain the parity. But the context here is that holes in the budget don't matter because you can just print money to pay them off - yes technically you can, but not without consequences that may be worse than just biting the bullet!

The "money" is always there. http://www.nakedcapitalism.com/2013/10/stephanie-kelton-how-...

And pension debt depends on how you account for future liability an d guess what Bloomberg etal have a vested interest in making things seem as bad as they can.

you need to ask Cui Bono "Who benefits" when you read articles like this

> Who are these investors and how hard would it be to make them cut their losses?

One of the bigger ones is pension plans for private companies which legally cannot invest in anything sensible. This is why companies are pushing their employees to invest in a 401k: the 401k can invest in something with a nice rate of return.

Making them cut their losses might not be hard though - private pensions are generally believed to be underfunded. It is generally accepted that many companies will cut their pensions anyway when they cannot afford them.

There are lots of other buyers of debt though.

The situation you're describing is a basic capital glut. There's too much cash floating around looking for something to invest in and make a return, but the pool of current and future aggregate demand has mostly run dry. As a result, society's most high-value projects have become money-losers, and useful stuff (like repairing trains or investigating the natural sciences) stops getting done.

Maybe Broad Institute, Harvard, MIT, shouldn't be tax free "non-profits" while TrainRepair Inc is paying 35% tax rate?

I'd certainly favor taxing the ever-loving heck out of Harvard and MIT (actually, everyone in Kendall and Harvard Squares) to repair the MBTA that literally brings their employees to work.

> no idea how to invest in something actually productive

It is productive, aka it produces a return. If you have another idea of "productive" to a lender, let me know.

The government doesn't want to do this because they will lose the next election if they do, guaranteed. They will never get enough votes from younger people to offset the guaranteed loss from the older people.

This is only true if elections are trustworthy checks on power. Given recent attacks by partisans and foreign powers, though, this is far from a certain thing.

No young person would vote for it either.

Not many would, but young people still have options at this point. For example some time ago it was a no-brainer to max out your pension contribution. Now, I don't know... Maybe I'd rather get a private fund (or funds) that I can access, while the national pensions are getting scrapped?

But if the next choice is between extreme nationalists and anyone else who wants to scrap the pensions? I'll take no pension over a potential civil war.

About the debt, why not just all default at once and start over at zero.

Then we could concentrate on starting to repair the damage we've done to the environment.

It's not like it's a law of the universe that these man made tokens have to be paid back with sweat and tears.

Unfortunately, it's the law of the universe (partially by virtue of our hardware, partially thanks to mathematics) that humans are damn hard to coordinate at scale. It's very hard for large groups to reach any kind of consensus - hence the governments and the economy. They can't be controlled directly, and distruption to either of them is always measured in blood.

>distruption to either of them is always measured in blood.

The existence and power of both of them is also measured in blood

> Firstly, the popular unrest.

> Pull the rug out from under them, and my bet is you'll have riots in the streets[0].

Let's make this even more fraught.

Imagine that the cohort net paying into the system at any given time has a markedly different national origin / ethnic / cultural makeup than the cohort net receiving benefits.

Further imagine that those two cohorts may have some rocky history and feelings of mutual resentment or recrimination.

This has high potential to get extremely ugly unless managed extraordinarily well.

There is little doubt in my mind that this notion (well-founded or not, consciously or unconsciously entertained) is a key contributor to the current political let's say volatility throughout the Western developed world.

I expected the downvotes (I mentioned the unmentionable) but please feel free to engage as well (if nothing else to satisfy my curiosity).

I don't get it either. You've raised a pretty important point I completely forgotten about. Blaming the problems of your country on foreigners is the tried and true method of controlling people. It happened in the past, and it happens today - as both Europeans ("it's the islamic immigrants!") and Americans ("it's the Mexicans!") should be able to testify.

When shit hits the fan I'm convinced politicians will try to blame immigrants, just to distract the native citizens from blaming the government (or each other). What happens then we all know from history lessons.

>What does this mean? That these staggeringly high numbers (if true) do not necessarily mean doom but "merely" that at some point people will find out that the pensions they have been promised won't be there when they reach retirement.

That's enough doom. What other "doom" would there be?

> What other "doom" would there be?

That what little you might have saved/your house is worthless because of inflation and/or punitive taxes. That the economy crashes so you can't take a job/stay on the labour market longer to make up, and your kids, if you have any, won't be able to help you because they have no jobs. That the heath service won't be there, so you risk adding sickness to poverty. Crime and civil unrest.

You think that if that default happens the economy and jobs will not be impacted, but continue OK?

No? I think that pensions getting a haircut (to save the larger economy) is significantly less doom-y than the economy at large crashing due to e.g. a default.

"Note that the article makes a crucial assumption: That all those unfounded future liabilities (most of which are pensions etc. I assume) of governments are fixed and cannot be changed. This isn't true, though: By changing the law, those unfounded liabilities can be erased at the stroke of a pen."

Ultimately this becomes fight between funding the liabilities (taxing the rich once again) and eliminating the liabilities (screwing the poor pensioners).

No politicians intent on slashing pensions would ever admit that it's a choice, though, just as they wouldn't admit that it was a choice to make the liabilities unfunded in the first place.

That's why consent for these policies must be manufactured, which in turn is why this article exists - to foment intergenerational strife.

Two future obligations are important, the social security and medicare provisions but one is worse

Many public employee pensions are in trouble is the idea of pension spiking and double dipping. pension spiking comes about by saving up sick and vacation time and cashing it out at retirement or taking on extra shifts. double dipping occurs where they retire from one qualified job and get into another though this has mostly been seen on the political side. You can end up for 100k retirees which is absurd on any level.

the trouble facing reform is there no set outcome in courts. some courts have allowed government to reign in costs and others have forced it back on the taxpayers to make up. California law has been towards and reduction is one category has to be made up in another. Illinois just keeps digging the hole as their State Supreme court has basically stomped on all attempts to fix.

The unions representing many government employees are very strong and politically active and if they cannot stop changes in court political intimidation will be the rule. the will simply work to unseat anyone who doesn't play ball. even the threat of reform by changes in party who runs the state brings out tens of millions of dollars and all sorts of shenanigans (look at Minnesota)

yeh, I work in clean energy, and I'm all about it, which is why casual conflations or assumed relationships like this are irking, because all it does it add to the pile of things parties that still want to reject climate change get to point to show how many arguments are lacking in substance, this being one of them.

I guess its true just about as much as any other correlation can be made with anyone who purchases anything. The more valid and underlying issue I thought would be focused on here is the baby boomers who have paid off their houses, have nice pensions waiting for them and refuse to retire after living 30+ years at the same job, while our generation has to re-educate ourselves 3-4 times over throughout our lifetimes (the first time in college being 500% more calibrated for inflation than baby boomers paid to go to college, many of who didnt need to go to get a good job) and change jobs every 7 on average years to stay relevant and avoid being too niche to niche ourselves out of career growth, which is the opposite approach of most baby boomers, relocate to follow our industries and/or navigate around jobs where we find out there is not career progress for the next 15 years because our superiors won't retire, or require a large amount of effort to navigate around their informaiton hoarding habits to maintain job security.

This along with the fact that as our generation is laden with college debt and switching jobs to stay relevant, the few who can manage to pay off loans, afford to livei nc ities where the good jobs are and set aside money for buying a home, are competing with baby boomers for starter homes as baby boomers downsize after kids graduate from college, so now many jobs, even most engineering jobs outside of software have us held back from higher positions and catalyzing change due to baby boomers, and their cash offers make it impossible for promising young couples or individuals to mortage houses.

The icing on top of the cake is the passive comments I hear from baby boomers about how we are narcissistic and lazy.

I know these are human beings, and they aren ot to just be thrown out as soon as it bcomes inconvenient for society, but moreso than ever I experience a bigoted increase of hatred for our generation couples with a lack of acknowledgement for our hard work, increase in adaptability and refusal and resistance to wanting to grow in any way to even slightly accomodate our generation, and justifying it all under the broad stroke that we are all wasting our lives away taking selfies, and our retirement funds away on avocado toast and urbanoutfitters clothing, most of which is untrue and irrelevant to the group in our generation that works harder and longer hours and puts more time and money in our education to earn stagnant wages, and for those less educated our age who don't have jobs, they have top struggle with being their own brand and selling themselves or personalities in the service industry because there are no factory jobs to send young men of low education into, and I'm sure the baby boomer generation would be experiencing the same issues if factory jobs were not there en masse waiting for them as well.

I guess its true just about as much as any other correlation can be made with anyone who purchases anything. The more valid and underlying issue I thought would be focused on here is the baby boomers who have paid off their houses, have nice pensions waiting for them and refuse to retire after living 30+ years at the same job, while our generation has to re-educate ourselves 3-4 times over throughout our lifetimes (the first time in college being 500% more calibrated for inflation than baby boomers paid to go to college, many of who didnt need to go to get a good job) and change jobs every 7 years to stay relevant, relocate to follow our industries and/or navigate around jobs where we find out there is not career progress for the next 15 years because our superiors won't retire, or require a large amount of effort to navigate around their information hoarding habits to maintain job security.

This along with the fact that as our generation is laden with college debt and switching jobs to stay relevant, the few who can manage to pay off loans, afford to live in nice cities where the good jobs are and set aside money for buying a home, are competing with baby boomers for starter homes as baby boomers downsize after kids graduate from college, so now many jobs, even most engineering jobs outside of software have us held back from higher positions and catalyzing change due to baby boomers, and their cash offers make it impossible for promising young couples or individuals to mortage houses.

The icing on top of the cake is the passive comments I hear from baby boomers about how we are narcissistic and lazy.

Its avocado on toast that causing all their problems. That and iPhones.

Pension liabilities are, no doubt, big. But other unfunded large scale liabilities include loans, infrastructure maintenance costs, student loans, household debt, health care costs, etc.

Basically all the stuff that turns into daily cash outlays in the Sim City game.

> Those that will pay for it is the generation that lives through the cut, i.e. which has paid into the system before the cut but was due to receive money only after the cut. This can very well be a generation that is alive today.

I suspect I'll retire after the cut, but I'm glad I got out of the pension funds before the cut. I have a kind of private pension fund for freelancers, which, if I understand correctly, is technically already my money, so it can't be looted to fund the retirement of someone who retires before I do.

I am sad to see the solidarity of pension funds break down like this, and I feel a bit guilty that I'm leading the charge, but that solidarity has to go both ways. Expecting future generations to pay the entire bill for the greed and mismanagement of today, is not solidarity; that's exploitation.

> I have a kind of private pension fund for freelancers, which, if I understand correctly, is technically already my money, so it can't be looted to fund the retirement of someone who retires before I do.

Wrong.

The only difference is that your pension fund will not be "looted", it will have to cut its payouts because its investments don't yield the same returns as they did before. Inflation will do the rest.

Private pension funds and investments are no more sustainable or "honest" than public pensions.

The underlying problem is the same: the currently working population has to produce the goods and services for themselves as well as for pensioners. If they cannot produce enough of something, some people won't get that thing, and it doesn't matter what some numbers in accounts say.

> The only difference is that your pension fund will not be "looted", it will have to cut its payouts because its investments don't yield the same returns as they did before. Inflation will do the rest.

Only if the economy goes down and inflation goes up. At the moment, inflation is low and the economy is growing.

My problem is not so much that I'm exposed to the whims of the economy, because that's unavoidable. My problem is when I need to pay extra so others don't have to feel the whims of the economy while I get to feel it double.

You missed my point completely. It's not about the "whims of the economy", it's about demographic change. If there are not enough people to pay into a public pension scheme, then there are also not enough people to generate the profits a private pension scheme needs.

Lets just vote on that. Nobody has the intention to build a anti-statistical wall. The youth would never escape the loving hug of the last generation.

Some parents are generously allowing their children to live at home rent-free. Mine are not. They provided me with an education, but in fact that was a scholarship from the institution my dad works at, not their own generosity.

Young people are better-educated, well-travelled, and more aware of the world than ever before. But old people control the Human Resources department. To protect themselves, they keep changing the rules to keep us out. HR demands years of continuous work experience, not only a degree.

The result is that we settle for low-paying entry level jobs. We can't afford to have children. Instead of seeing this as a problem, I consider it a weapon in this war of generations. I'm denying my parents the joy of grandchildren.

Pension funds take money from young people and pay it out to old people. I have no hope that the fund will still be around by the time I'm able to retire (and the retirement age is probably going to increase anyway). A similar thing can be said about insurance. Therefore I think that young people should boycott pension funds. The system is not working for us, so we should not pay into it. We must continue to pay taxes because of legal requirements, but all other financial services are biased towards an older generation.

The worst part is the inequality that will come when the older generation finally pass on their inheritances. Some people will be very rich. My parents promised me that I will not receive any inheritance. So I will be poor.

The instability and debt is likely to lead to a war. It wouldn't surprise me if the USA decides to fight China about the huge debt they owe the Chinese. And who will die in the war? Young people.

We really need to see this through. (Anthem Part 2 - Blink 182)

The US has a huge trick they can pull with debt.

The US borrows in its own currency. Ultimately, if the US government debt burden becomes to large it can choose to print money to print itself out of debt.

There are huge costs involved in pulling these sorts of tricks, but it's far cheaper than a nuclear confrontation with China.

The Chinese are also well aware of this and don't just buy US treasuries for their own reserves.

Most advanced economies are in a similar position - having their bonds denominated in their own currency and having a central bank that can never run out of that currency. The Eurozone are an exception, which is probably going to cause the currency to eventually collapse, but that's another story.

There aren't really 'huge costs' to paying down debt with new money. People assume that it would cause problems, but when you look into the mechanics of how both central banks and commercial banks work, some things become clearer.

The first thing to note is that the money supply is actually constantly expanding, even without the central bank creating money, because new money is also created when central banks issue loans (see [1] for an explanation from the Bank of England, central bank of the UK). So money creation by itself is not inherently inflationary. Inflation actually happens when aggregate demand over some period is greater than the amount of goods and services produced in that period. Money creation generally does add to aggregate demand, but so does all spending in general (i.e. increasing the velocity of money). So, if money creation is properly managed (to keep it from adding too much to aggregate demand), then it can be done without any inflationary consequences.

But that only applies for a Government creating money to spend. Changing bonds ("debt") into central bank reserves is actually asset-neutral. The bond is an asset worth a certain amount that can already be bought and sold. Replacing it with central bank reserves makes it more liquid, but doesn't actually add new assets into the system.

Of course, there's not much point to paying down bonds like that. Since the Government can't run out of its own currency, their bonds are basically meaningless. Since the gold standard was dropped, they exist mainly because the private sector likes having a zero-risk asset to invest in. What really needs to happen is to stop pretending that bonds and taxes actually finance Government spending, which hasn't been the case since 1971...

1. http://www.bankofengland.co.uk/publications/Documents/quarte...

> The US borrows in its own currency. Ultimately, if the US government debt burden becomes to large it can choose to print money to print itself out of debt.

A major reason independent central banks exist and have monetary policy entrusted to them is to assure lenders that this—a common problem when fiscal and monetary policy are controlled in the same place, which is a short-term fix foenthe government thst crushes it's long-term credibility—won't happen.

> There are huge costs involved in pulling these sorts of tricks, but it's far cheaper than a nuclear confrontation with China.

Debatable. It's probably cheaper for the US in the short rub than a total nuclear exchange with China, but “nuclear confrontation” is a broader concept encompassing many less-costly potential outcomes.

And it has pretty enormous consequences that include, even in the intermediate term, a great escalation of security risks.

Not that war with China over debt, directly, is the alternative (war with China over resources as both countries try to secure growth is more likely, though.)

> A major reason independent central banks exist and have monetary policy entrusted to them

You mean to say, "delegated"? Because that's the nature of the relationship between the state and its central bank in practice, and just like any other delegated authority, it can be revoked.

> Young people are better-educated

that's a pretty bubble-thing to say ... leave your bubble for a while and you'll see that only some young people are better educated - most are terribly educated or not at all.

In the US that's just statistically accurate: https://www.census.gov/content/dam/Census/library/publicatio...

See pg 2

This assumes that "bachelor's degree" is itself a constant measurement, which out of the context of this particular conversation virtually nobody would agree with. The number of people with "bachelor's degrees" can be going up even as the objective level of education is going down, and even if "the objective level of education" is very difficult to measure.

(There are some people with a "bachelor's degree" that I would consider anti-educated by their college, having gone to school for four years to learn to close their minds with the right invocations of words, despise knowledge, and condemn free inquiry that threatens to upend their ideas. Counting them as "educated" in the statistics doesn't much impress me.)

If only there was some sort of evidence that wasn't anecdotal...

It's really not. The vast majority of people under the age of 30 have fully completed high school and have at least some college education under their belt.

> The vast majority of people under the age of 30 have fully completed high school and have at least some college education under their belt.

Well, no, the vast majority of people under the age of 30 have not. A majority (not vast, only about 65%) of those 25-29 meet that description, and it's lower as you get younger.

Younger people are substantially more educated than earlier generations were at the same age, but for a number of reasons (older people have had more time for additional education, life expectancy and educational attainment are mutually correlated within an age cohort, etc.) That affect is attenuated when looking at young people vs. older people rather than young people vs. previous generations at the same age.

> I consider it a weapon in this war of generations. I'm denying my parents the joy of grandchildren.

Wow. Do you really think this matters at all?

To some parents, this matters a lot and it matters even more to the individual making this choice because they free themselves of a huge burden put on them by expectations of society/family.

I always considered it weird how "getting children" is the default choice for so many people, even when they are clearly in no good position for anything like that, a certain scene from the movie Idiocracy always comes to my mind when I think about that.

Yeah but using it as a way to "get back" at your parent's generation? After a decade of "no mom, I won't have children!!!! That's what you get!!!" they'll get over it and keep enjoying their retirement.

>After a decade of "no mom, I won't have children!!!! That's what you get!!!" they'll get over it and keep enjoying their retirement.

OP did not specify if he actually informed his parents about that decision, he might just as well get his satisfaction from the knowledge it won't happen, without even telling the parents.

There's also parents who simply can't/won't accept such a choice and not even recognize when you inform them of your choice not to have offspring, they will just go about their ways pretending nothing changed, still expecting cute little babies a couple of years down the line.

"I don't want to have children." - "Yeah, everyone gets over that phase eventually." - ":|"

It's not weird, it's a drive created by a billion years of evolution.

When all is said and done, what matters is passing on your genes. It's nice if you can bring up your kids in luxury, but the idea that it's necessary is rather nihilistic. You don't need to be able to afford an Ivy League education for your kids for them to be realized human beings.

If you live in a first-world country, and can feed and clothe your kids, and have space for no more than 2 kids/bedroom, what more exactly do you think you need?

>You don't need to be able to afford an Ivy League education for your kids for them to be realized human beings.

No, but I do need to be able to afford whatever it takes to give my children a fighting chance at getting a good job and having a good life. I personally do not plan to have children until I have some level of confidence that I can help them get on their feet when becoming productive adults. If the best I can do is kick them out of the house when they turn 18 and tell them, "good luck" I really shouldn't be having kids.

That's well and good that you feel that way personally, but the grandparent was suggesting that anyone who doesn't share that opinion could play a role in the movie Idiocracy.

But to address your point specifically, respectfully, 'giving your kids a fighting chance at getting a good job and having a good life' doesn't require very much money - pretty much nothing beyond healthy food, clothing, a roof over their head located someplace with decent public schools, and doing your best to instill them with the right character and values.

You don't need to live in the Valley and make six figures to have a good life. There are millions of happy people working in productive mid-five-figure jobs across the country right now. Do you really believe that, right now, you couldn't raise a kid who could accomplish that? There are people in awful areas with awful schools, who can't, sure, and real poverty engenders social conditions that make that difficult, but is that true for you, right now?

I don't mean to try to convince you to have kids, but I feel like a lot of people believe that if they have kids, they have to provide them with every material advantage possible to compete in a rat race/keep up with the Joneses, and I think that's unhealthy for society and even for individuals - after all, having kids later in life dramatically increases the rates of virtually every adverse medical condition kids can have.

>It's not weird, it's a drive created by a billion years of evolution.

Sure it is, but I always thought we humans differentiate ourselves from other animals by not being motivated merely on instinct/drive, aren't we rational beings after all?

>When all is said and done, what matters is passing on your genes.

I don't consider my gene stock to be especially outstanding, it's actually quite flawed, so I see no point in "passing it along".

There's also no shortage of able-bodied and smart humans on this planet, we already don't know what to do with all those we already got, so why would I want to add even more?

>what more exactly do you think you need?

What exactly do I gain? Except for a whole lot of long-term responsibilities, at least if I want to be a decent parent. I realize this might sound egoistic to some degree, but the same could be said about "passing on genes for the sake of passing on genes".

> Sure it is, but I always thought we humans differentiate ourselves from other animals by not being motivated merely on instinct/drive, aren't we rational beings after all?

Absolutely not. Humans are plain, regular, irrational animals with extra capacity for language and abstract reason. Humans are never motivated by reason. Reason in humans is typically used for rationalization - man is the rationalizing animal. We do things for irrational reasons and come up with persuasive arguments to ourselves and others as to why they were rational.

Similarly, I think it's worth reflecting on the drives and forces that led you to feel this way about children. In some sense, it's a kind of 'sickness' to not want to - maybe that's reflected in your comment about your genetics. In general though, I think there's a tremendous societal malaise, a social disease, that lays pretty heavy on a lot of people.

> I realize this might sound egoistic to some degree, but the same could be said about "passing on genes for the sake of passing on genes".

I personally look at it a different way. My ancestors, going back to the first single-cell life billions of years ago, lived, fought, mated, and died so that I could live, knowingly or unknowingly - there's a chain of life from me going back all the way to the very beginning. Parts of them live on in me.

Who am I to say - it all stops here, thanks, all of it ends with me?

>We do things for irrational reasons and come up with persuasive arguments to ourselves and others as to why they were rational.

We do that sometimes yes, but it's not the only thing we do, sometimes we actually end up doing pretty reasonable things like valuing our environment more.

>Similarly, I think it's worth reflecting on the drives and forces that led you to feel this way about children. In some sense, it's a kind of 'sickness' to not want to - maybe that's reflected in your comment about your genetics.

It's the logical consequence of me growing up in a country with something that resembles a social security net. Historically one of the main reason for humans getting children was old-age/disabled security and the additional income for the family generated trough the free labor.

This function of offspring does not exist anymore, at least in such a direct relation, in most countries with a social safety net.

In that regard, drive is a rather meaningless emotion we manage to keep in check the majority of the time. Why is that considered sick? Usually, it's the other way around: People who can't keep their emotions in check are usually considered unstable.

>In general though, I think there's a tremendous societal malaise, a social disease, that lays pretty heavy on a lot of people.

Sorry, but what are you referring to there as societal malaise? That so many people don't want to have children anymore? I think it's the sensible reaction to the global state of affairs.

> Some parents are generously allowing their children to live at home rent-free. Mine are not.

As someone who has struggled with my parents for years to let me go and live on my own place (on my own expense), I can't understand why parents won't let their children live with them.

Is it because of space? Is it because of the extra cost? (I'd suppose it is negligible and you could contribute to it)

The thought is that subsidizing lifestyle choices is unhealthy compared to letting people get accustomed to the lifestyle their income affords.

This might be understandable if the guy is blowing his money on drugs and parties. But if he is using the rent + food money to save it later (for a purchase or by investing in stocks), then how is that unhealthy?

People have a funny way of confusing nice-to-haves and essentials. Getting used to a certain lifestyle in certain kinds of neighborhoods can be unhealthy, at least in abstract.

Of course different people are different. This isn't a universal law or something.

> As someone who has struggled with my parents for years to let me go

Why is that? Helicopter parents?

It's a very common thing in the country I live in.

>Some parents are generously allowing their children to live at home rent-free. Mine are not. They provided me with an education, but in fact that was a scholarship from the institution my dad works at, not their own generosity.

You seem to feel that you are owed more. Are you joking or are you really this bold-faced entitled?

>Young people are better-educated, well-travelled, and more aware of the world than ever before. But old people control the Human Resources department. To protect themselves, they keep changing the rules to keep us out. HR demands years of continuous work experience, not only a degree.

Since when does being well traveled or aware of the world mean you are better qualified for most jobs? It very rarely matters (would you put this on a job resume?). Young adults do have degrees at a higher rate than ever before, but most of those degrees are worthless degrees.

>But old people control the Human Resources department. To protect themselves, they keep changing the rules to keep us out. HR demands years of continuous work experience, not only a degree.

This is quite the conspiracy theory. So there are jobs to be had but the old people are keeping you out of them?

I define a worthless degree as a degree where you could have learned the same skill on the job or at a trade school. This is the way your parent's generation did it. The degrees in this case are a waste of time and money. They provide false hope as well.

>Pension funds take money from young people and pay it out to old people. I have no hope that the fund will still be around by the time I'm able to retire (and the retirement age is probably going to increase anyway). A similar thing can be said about insurance. Therefore I think that young people should boycott pension funds. The system is not working for us, so we should not pay into it. We must continue to pay taxes because of legal requirements, but all other financial services are biased towards an older generation. The worst part is the inequality that will come when the older generation finally pass on their inheritances. Some people will be very rich. My parents promised me that I will not receive any inheritance. So I will be poor. The instability and debt is likely to lead to a war. It wouldn't surprise me if the USA decides to fight China about the huge debt they owe the Chinese. And who will die in the war? Young people.

Is this whole thing one big joke? You got me, you are trolling with sarcasm right?

Millennials are scary...

> You seem to feel that you are owed more. Are you joking or are you really this bold-faced entitled?

Everyone stands on the shoulder of giants. The current old generation just does not want anyone stand on their shoulders. Society was always asset driven. Assets like land and houses have become speculation objects instead of the means to living.

>I define a worthless degree as a degree where you could have learned the same skill on the job or at a trade school. This is the way your parent's generation did it. The degrees in this case are a waste of time and money. They provide false hope as well.

The parents' generation's employers were willing to train on the job or hire people who had learned in trade schools. (US, white collar, non-programming) employers today tend to make some kind of college degree a minimum requirement, even if what was "learned" at college bears no relationship to the job. This isn't the fault of the degree-earning youngsters.

>>I define a worthless degree as a degree where you could have learned the same skill on the job or at a trade school. This is the way your parent's generation did it. The degrees in this case are a waste of time and money. They provide false hope as well.

The primary reason 18-year-olds go to college is because they are told by their parents that it is necessary to get a good job afterwards. Indeed, the vast majority of white collar jobs in the USA require a bachelor's degree. Those with degrees implicitly or explicitly have a leg up on those who don't. Just ask your company's HR department.

Maybe it is entitlement. You get out of school, struggle for 15 years, and have absolutely nothing to show for it but a heap of debt. Then you look around the world and see that success isn't a reward for hard work, it's a reward for being born wealthy and connected. If you don't own land, you're screwed. It's expensive, and old people love hoarding it.

Millennials are scary? Do you know who the President of the United States is?

The government is who has screwed you over. By offering student loans, the govt (perhaps accidentally) inflated the cost of college to insane levels.

Continuing the flawed system is not accidental, because having a generation in lifelong debt is convenient to those who control wealth.

But I doubt it's your parents who are to blame. It's yet another failure of our government to look out for the best interests of its citizens because it gets swayed by greed.

Fuck that. The government paid for most of my college and living expenses during, without incurring any debt (MGIB.) I'm getting screwed over by the combination of medical expenses and rent.

>You seem to feel that you are owed more. Are you joking or are you really this bold-faced entitled?

It's not really feeling that we're owed anything. It's more of a wish that older generations would take a look at the world as it is today, realize that what worked in decades past is no longer viable, and adjust their expectations accordingly.

Regardless of education, you can't just walk into a job today. Worse, employers expect you to be ready to hit the ground running fresh out of the gates – few provide workplace training, even for entry level positions. If one isn't fortunate enough to land an internship, this creates a nasty catch-22 situation where you can't get into X industry due to lack of experience, but you can't get industry experience because nobody will employ you. Even if you do have a degree and experience, it's likely that you're not any company's first choice.

As a result, you end up with a ton of young people who if were entering the workforce 40-60 years ago would be on a path to a solid career instead grinding away years of their lives (sometimes upwards of a decade) working at places like Starbucks and Walmart in hopes of a glimmer of opportunity presenting itself. Some lose hope entirely and resign themselves to that kind of life.

I was lucky. My parents wanted to help but couldn't and I don't have a college degree. Thankfully I had cultivated some level of programming ability in my teens which with a couple years of living on nothing I was able to develop into a well-paid software development career, but this was only possible due to my being in the right part of the country, the current crazy demand for SEs, and because this field doesn't obsess over degrees too much.

Software dev is an odd bird in that respect. You can't do that in most other fields, and thus the idea of young people pulling themselves up by their bootstraps is largely unrealistic. Most are going to need at least a little bit of assistance to become a productive member of society, but the older generation is denying them of that.

who will receive their inheritance? please don't say some charity or gov instead of own child which could use it

And you'll have to wait practically half your life to get it as medicine improves. So it's kind of useless when it matters.

Young people are better-educated

Is there any good data showing that young people actually have more useful skills or knowledge than their predecessors did, not just certifications and years of schooling?

Are you trying to suggest that my art history degree is somehow worth less than an engineering degree?

fascist

> The result is that we settle for low-paying entry level jobs.

uh... isn't the point of entry-level jobs to be the kind of jobs where people entering the market start out?

> Young people are better-educated

Actually, while education years have increased, education standards have slipped. The people reaching tertiary education these days are a year or two behind where they were in the Xers days.

The point is this: stop painting yourselves as undeserving victims. Every generation faces challenges. The fact that your generations challenges don't come pre-solved for you isn't going to be solved by constantly bitching about the boomers and doing nothing.

> isn't the point of entry-level jobs to be the kind of jobs where people entering the market start out?

The point of entry level jobs is to do low skilled labor. There is no grand design, especially a philanthropic one, in how corporations structure their ranks.

Job mobility is drastically down. You are much better suited to quitting your current employer for greener pastures every ~3 years than trying to move up an established ladder. There is no upward mobility from Starbucks Barista, and it isn't a pivotable skillset.

> The fact that your generations challenges don't come pre-solved

I think the hostility is more about how the problems millennials face now are man made problems previous generations didn't have to face because of greater social cohesion they have no practical control over until after they inherit it ~20 years from now.

By then I fully suspect the current upstarts with ambition to be bitter and hostile and look back on "when <nation> was great" just like the boomers do now.

> I think the hostility is more about how the problems millennials face now are man made problems previous generations didn't have to face

The GP is bitching about a potential war between the US and China, and conveniently ignores the actual wars that the Boomers were conscripted to fight (Vietnam) and the generation before them (WWII, Korea) and the generation before them (WWI). If those wars aren't classed as 'man-made problems' and the young being sent to die for the old, then what's the point of discussing further?

As for job mobility being drastically down, that's looking at the past with rose-coloured glasses. We may have passed the peak of job mobility, but it's far more labile now than it was in the 60/70s and earlier, especially if you're female. The fact that you can job-hop these days is proof of this.

The only way millenials have it worse than 'previous generations' is if they're completely ignoring how previous generations actually had it. Hey, you know what I hate? I hate how every week I have to get down on my hands and knees and manually polish the floorboards with wax, so they last longer. Oh, hang on, I didn't do that, that was my grandmother. She was a bit of a clean-freak, but the point is that 'maintaining the floor' used to be a thing, now no-one thinks of it beyond a bit of a vacuum. It's stuff like this that the millenial "we have it sooooooooooo hard!" complaints completely ignore.

I think by "entry-level jobs" the OP meant "dead-end jobs". A coffee shop barista doesn't exactly have a career progression.

In the context of this article, it's about boomers expecting millennials to solve their own problems and their parents' problems (all that accumulated debt to pay pensions etc).

I think, beyond your personal story, an issue is that the youth today does not have the economic independence to give their parents the finger when they want to, something that in the past has created socially progressive movements. 3 decades after the internet, the dominant culture is still controlled by hollywood and TV stars.

We don't actually owe China that much. It's only like 5% of our total debt....That's a meme that's been so overblown.

> The worst part is the inequality that will come when the older generation finally pass on their inheritances.

This worries me as well. Many people who are already doing well because of their financial-care-free childhood and early adulthood will be launched even further into the economic stratosphere. Many others will be buried by the burden of supporting their parents for longer (and at higher cost) than they were supported themselves. Whatever inequality already exists is only going to be magnified by these inter-generational effects. The results won't be pretty.

"The result is that we settle for low-paying entry level jobs. "

Should you be given a high paying mid-level job when all you have is a college degree and no experience? Shouldn't people start from the bottom and work their way up? I got an entry level job after college and am not entry level now. It took a few years. Don't be afraid to take an entry level job just to get your foot in the door.

The question I guess is what is our entry level job salary compared to yours, inflation adjusted and tied to the CPI?

I'm willing to bet ours is far less favorable.

In my purely anecdotal observations, there hasn't been a great demand for entry-level work, especially so following the last recession. A college degree and no experience won't even earn you the benefit of a rejection letter. People instead find themselves "sustained" on low-paying jobs that don't count as entry level for anything but fast-food and retail management. If you're lucky to come from a family with some money, maybe you get an unpaid internship or two before landing that first entry level position.

You don't absolutely have to get an 'entry level' job--you could be an entrepreneur, for example. Everything is risky. The problem I see with the entry level roles right now is that they all require ~5 years of experience! How are recent grads getting experience when the definition of 'entry level' has changed from meaning 'no experience' to meaning 'this is how much experience you need to work here?'

> We can't afford to have children. Instead of seeing this as a problem, I consider it a weapon in this war of generations. I'm denying my parents the joy of grandchildren.

A few things:

1. You're also denying yourself the joy of grandchildren. And children, who can be really wonderful in their own right...

2. Instead of thinking of your decision to not have children as something that affects your parents, maybe think of it as something that affects your children. The only way they get to enjoy life is if you make them exist...

3. In light of #2, maybe consider lowering your bar for what you think is "necessary" in order to have children. If you decide not to have kids, the alternative for those kids you would have had is not that they get to have some posh upbringing with all the fixins. No, the alternative is that they never get a chance at life.

Just some food for thought...

There's no "they" there - a person that doesn't yet exist does not feel or suffer, and therefore they cannot be meaningfully empathized with, nor can there be any moral obligations towards them.

> nor can there be any moral obligations towards them

I think most people have a sense of moral obligation to unborn humans. If you have ever felt that the current batch of humans has an obligation to not screw up the earth for the humans who will come later, then you feel a moral obligation to unborn humans. And even if you don't, I assure you that many people do.

There's a difference between an obligation to humanity as an aggregate entity, which is sort of always there with an uninterrupted continuity (even as individual members are born and die), and obligation to a specific hypothetical human being that may or may not exist. This is especially weird in the context this question, where your very decision is about whether they'll exist. I just don't see how an obligation to create can be owed prior to creation.

1. You can have children further down the line...

2. Exactly, think of the kids. Conditions are not favorable for having children at the moment. Odds are it will be better for the child if I wait a few years. Whose fault is that? Not mine.

3. "necessary" at what level? To have children you don't need healthcare, decent education, and a safe clean home.

Just some food for thought... Many people, including my dad, are literally voting for the 2nd coming of Jesus at the cost of the next generation. Maybe we don't want our kids to have anything to do with that fuckery but lack the financial means to do so.

I have a theory that may not be popular around here. I also probably have not thought this through and researched it enough, but I will throw it out there anyway. I would love to have it torn to shreds by someone who has studied economics or more likely this is something that has already been extensively researched.

It seems to me that real sustained economic growth cannot happen without population growth, at least the way things work right now. Efficiencies gained through technological innovation and financial manipulation cannot sustain growth indefinitely, they just smooth out the bumps and with population growth help increase the rate of economic growth. And without economic growth, we are going to keep running into these issues and others brought up in the article.

Look at Japan, no amount of economic/financial manipulation has really helped them. Their main economic issues stem from the fact that there are not enough young people.

Aside from epidemics/catastrophes, there has almost always been sustained population growth through human history. It is in our nature to multiply and expand. I feel this is why so many people are fascinated with space and space colonization.

The current demographic trends in western society is unprecedented and in my estimation, I do not think it will end well unless someone finds another solution, or these demographic trends are reversed.

Feel free to rip apart my theory. I would love to hear what someone with a better understanding of this area has to say.

I think we covered this in my Econ courses.

When you have population growth (or non-native settlers), they prop up the old. It's a pyramid scheme.

> When you have population growth (or non-native settlers), they prop up the old. It's a pyramid scheme.

It's literally a pyramid scheme: the population pyramid is supposed to have a broad base, but today it's upside down.

And if it is not occasionally reset by natural catastrophes it will be reset by man-made ones. In the 1980ies we feared man, today we are blindly growing towards destruction (by population growth domestic or imported). Some people cite Japan as an example of failure, I see them as an example of sustainability: they abstain from the quick and easy wealth fix that could be had by pyramid-scheming.

I'm no historian but I believe that there is a precedent for the current demographic trends - the late Roman Empire. From what I've read, birth rates didn't sufficiently outpace infant mortality rates during the late days of Roman rule, which may have been a contributing factor to the fall of the Empire.

This is basically conventional wisdom.

Why do you think politicians say they will sort out immigration, but then encourage even more immigrants? They want more workers.

I am not so convinced, given that our jobs are all supposed to be automated soon, we shouldn't have to rely on more humans to grow economically.

In the UK they claim we need mass immigration for growth, but jobs that teenagers used to do are now being done by grown adults, so I don't believe it. We also apparently have terrible productivity compared to other countries. I think that if we stopped relying on extra humans, productivity would suddenlg rocket.

How do you reconcile this with what is happening in Japan? Do you think huge amounts of automation would fix their problems? Isn't much of their manufacturing already automated?

Not to mention their extremely widespread usage of vending machines, which, Vox (from YouTube) posits is a result of their shrinking workforce.

Reasons vending machines are popular in Japan

- they were an easy place to get beer before convenience stores sold alcohol or became open 24/7 (this is a bit before my time so maybe someone else can elaborate)

- a vending machine requires less space than a store.

- there is not a large difference in price buying from a vending machine or convenience store (10 yen or so).

- It is very hot in summer and very cold in winter, so people like having access to a hot or cold drink.

- a lot of people operate on a tight schedule, so their only "free time" might be when they are walking between places (home and train station, train station and work etc)

- vending machines are useful in a disaster. I believe they will give out free drinks in an emergency.

Slightly OT but I once had a Japanese vending machine deliver a cardboard can printed with an apology when it was out of the drink I requested.

The can had a plastic lid with coins in it, returning the amount I had deposited, and the cardboard can contained an instant cold pack, presumably to assist me with managing the heat while finding another vending machine.

Some manufacturing jobs are automated. I'm talking about the next phase.

Is Japan really in that bad of shape? Their rural areas are dying out, but that is the natural trend towards peak urbanization. The larger cities are vibrant, and while their work life balance is (to put it lightly) completely wack, there are plenty of major international players in a lot of markets of Japanese origin - Toyota, Sony, Nintendo, Subaru, etc.

Those companies are growing or at worst sustaining at globally satiated production, to the best of my understanding few go hungry, technological adoption is extremely high, and homelessness and crime are low. Per-capita they keep ending off better off year over year by staying put while everything else gets cheaper. Their whole economy looks like it is contracting with the population decline but nobody is suffering a lack of supply availability to meet their demands for it. Top it off with the giant entertainment sector amount of culture they output globally and that does not ring of doomed society.

Could this be a reflection of our monetary system (the fact that we cannot possibly repay all the money because there is interest that is owed to the lenders, and where does that extra interest come from? The lenders!)? This means we need more people to earn more money to pay it back ad nauseum leading to an exponential problem? I'm not an economic expert but believe the basis of the above is rooted in reality but happy to learn more if someone can correct me!

That's only true if the interest payment is larger than the income that can be made available to pay it.

If you live in Greece then, yes, this is a bit of an issue. The solution there is likely to be some form of writing down of the debt.

what you described is essentially a global ponzie scheme. and that's what it is at the bottom line - the growth feeds on itself - no more growth - everything crashes.

is that sustainable or even reasonable by any standard - the answer is an obvious "no". but it benefits the powerful.

No. The error that you have made is confusing stocks with flows. Your problem would be true under two circumstances - if all debts had to be paid at once, or if money disappeared when spent.

But when you introduce the time dimension, the system works. The money supply is a 'stock' of some quantity, but payments (principal and interest) occur over time, making them a 'flow'. Those payments will then generally be spent back into the system, which circulates (all expenditure is someone else's income). This circulation is measured as the 'velocity of money'.

So interest isn't a problem ultimately, but the increasing accumulation of wealth by the most wealthy may become more and more of an issue.

Exponential population growth is fundamentally unsustainable. Given a population growth rate of about 2% per year, like it was in the 1960s, an average mass of 60 kg per person, current world population of 7 billion, and a total mass of the universe of 3x10^52 kg, we can calculate the amount of time before humans consume the entire universe, including dark matter. It's a little under 5000 years, far shorter than the record of human history.

So, this is a fact: we cannot grow exponentially for very long. Also a fact: humans have survived the vast majority of human history with near zero population growth, if we consider human history to be 200 millennia old and population growth to be a factor of a million during that time, average growth is 0.007% per year.

Economic growth is also the wrong thing to measure. Surely something else, like quality of life, would be more appropriate. You say that "no amount of economic/financial manipulation has helped [Japan]" but does Japan really need help, or are their citizens enjoying a relatively high quality of life?

"...are their citizens enjoying a relatively high quality of life?' I would say yes.

To me, the question is: can their high quality of life be maintained if there is no economic growth? Is it possible to print money/borrow indefinitely to support this quality of life?

Especially with regards to the article, I think these are valid questions.

> Is it possible to print money/borrow indefinitely to support this quality of life?

Why do you need to print or borrow money to sustain a quality of life?

Some people think money has inherent value..

They would be wrong.

Due to technological progress, the amount of money and resources required to maintain a constant quality of life has decreased over the years. So you could in fact maintain quality of life even during economic contraction, as long as resources permit.

My question is: why do you suspect that economic growth is necessary for quality of life? What is the exact connection there that you are thinking about?

Great questions. Thanks. Looking at their economy as it is, they are borrowing massively with essentially 0 growth. The government is doing this in an effort to prop up the economy and spur growth.

If they were to stop borrowing money without a substantial leap in technological progress, would the economy go into a deep recession? I do not know enough about economics to say, but I am basing my assumptions around this reasoning. Am I missing something?

I'm then assuming that if the country went into a deep recession, that quality of life for the average person would decrease.

> The government is doing this in an effort to prop up the economy and spur growth.

How so?

From where I sit, Japan's borrowing is funding infrastructure rebuilding and quantitative easing. The infrastructure, including energy production, is necessary for future economic and human activity. Quantitative easing combats deflation and keeps monetary policy functional when interest rates are low. This borrowing looks neither unsustainable nor does it look like a measure to artificially prop up the economy.

> If they were to stop borrowing money without a substantial leap in technological progress, would the economy go into a deep recession?

If you suddenly stop borrowing money, it would cause economic turmoil, just because everything is economically connected and everyone's economic forecasts would change. The borrowing is being used to support QE which causes inflation, without it Japan could be at risk of deflation. Deflation would mean that goods and services would get cheaper (and maintaining quality of life would also get cheaper), but there are also negative consequences—people who save money win, people who borrow money lose, people who invest money have a hard time making good investments, lack of investment causes problems down the road, etc.

You haven't addressed the question at all.

To reiterate, the question was:

Why do you think quality of life is tied to economic growth? What do you base that assumption on?

> calculate the amount of time before humans consume the entire universe

I've heard this same argument made using energy instead of mass. That article correlated economic growth with increased energy usage. It does make sense, our universe might be expanding but it is finite.

However, what if this is a social and not a physics problem? Maybe more and more new people are required to keep human social structures functioning optimally. Maybe the solution is virtual reality.

> Given a population growth rate of about 2% per year, like it was in the 1960s, an average mass of 60 kg per person, current world population of 7 billion

Economic growth in developed countries is driven by population growth, and this is why they all have a decent amount of immigration, to sustain that growth. In developing countries, they can grow by development - adding more subsistence farmers doesn't really grow the economy.

Australia has just taken the record for the longest period without a recession (26ish years), and this has been done on the back of immigration - since 1999, we've increased our population by a quarter, and our birthrate is only replacement-level. Population growth in developed countries != population growth globally.

> Population growth in developed countries != population growth globally.

Right, and both are unsustainable long-term.

I'd say a lot of the growth has been by exporting dirt and food to China and other Asian countries. This made Australia resistant to the GFC crashes because our raw materials were in great demand. It was also regardless of immigration as other countries with similar levels of immigration did not have the same economic success.

Mining is only 7-8% of our economy. We survived both the GFC and the recent years of mining downturn. Mining isn't a small part of it, but it's not really the key player in our economy. Agriculture is much bigger, but still, the reason why we import so many humans[1] is to keep our economy growing. Immigration isn't the only thing that can affect an economy, but with an ageing population, bringing in new youthful blood helps keep the workforce growing.

[1] The only large Western nations with higher immigration rates are Spain and, surprisingly, Norway.

Productivity growth per capita (= "economic growth even without population growth") has been happening since the industrial revoluation, and lately it's moved more and more into immaterial / less resource intensive domains.

You don't seem to present any arguments as to why it wouldn't happen without population growth. It has been rather self-sustaining.

(A different questionis whether we should aim for economic growth - given our biggest problem now is climate change).

In college I had an econ friend who said that there's basically only three ways to grow an economy: more workers, better technology or more capital.

If you look at technology, then I think "yes!" it has improved the economy. Look at engines and trains and telecommunications. The first world economy today, per person, is rip-roarin' compared to 100 years ago.

Many western economies haven't noticed the decline in the birth rate yet because of so many immigrants. Japan is unique in that they are a modern country, with a declining birth rate, but very low immigration.

doesn't declining population mean also lower expenses on infrastructure and everything?

No because you might need a lot of infrastructure to keep up with the fact that the largest part of your population is old.

Populations don't decline uniformly and people don't naturally optimize for infrastructure use and the best use of existent resources.

You don't have to even wait for population decline, we already have more unoccupied homes in the US than homeless by an order of magnitude, but all those homes are in "dead" areas where industry or resource extraction came and went. Now those houses and all the infrastructure around them decay without use, while elsewhere infrastructure is overburdened with concentrated people.

If anything, declining population means more per-capita expense on infrastructure, and the per-capita costs of maintaining current infrastructure (at least in the US) is out of control.[1]

[1]: https://www.strongtowns.org/journal/2017/6/4/this-is-why-inf...

This video seems relevant: https://www.youtube.com/watch?v=FACK2knC08E

According to Hans Rosling we've reached "peak child", meaning we're almost at 2 children per woman globally. This means population will continue to grow for a few years as globally there are more children than adults but will stabilize after that around the ~11 billion mark. And as long as we stay at that "peak child" number we won't go any further. I really recommend his videos if you haven't seen them.

My intuition tells me that productivity per capita has been increasing; we have not been relying on population growth alone to grow the economy.

The catch is that the increased production is not distributed equitably. For the average (more productive) worker, the things that they need such as health and housing are not any 'cheaper'. So where is their 'share'?

As productivity increases, credit expands to capture it. This is how, ultimately, those with the capital end up with the increased productivity.

Just a thought.

Is economic growth necessary? Is it valid that no growth / slow growth is the same thing as stagnation? What does a world look like when the population is staying roughly constant, with births and deaths in balance?

Japan has been in a situation like that for a while now. Instead of poo-pooing it as a long recession, maybe the rest of the world should try to learn from it.

Some days it's robots taking all the jobs, other days it's who's going to take care of all the old people. Come on people, just pick one.

Unless you count hoarding canned food, you can't really save for the future. You can acquire claims on income in the future by buying stocks or bonds or whatever, but that income will have to be produced in the future, produced by young people working. Old people have always been taken care of by young people. The illusion of the financial system can't change that. There are relatively more older people now than there used to be, but on the whole that's a good problem to have, because people are living longer and have more control over their lives. The best way to deal with an aging population is to guarantee a decent standard of living for the young, so people don't have to wait until they're pensioners to enjoy income security.

At least in the U.S., we can rationally worry about both things at the same time! Social Security is bankrolled by a tax on labor income. Robots, however, produce capital income. We could easily be in a position where millennials have limited employment because of automation but nonetheless carry the burden of supporting the baby boomers in retirement.

You seem to be contradicting yourself. Unemployed but working to support old people? That's employment. Not all jobs have to be in factories. Why can't elder care be a booming industry that sucks up all the unskilled labor left behind by automation? The customers are the very people who can afford it the most.

You don't understand the premise. The Parent is pointing out that taxation of working people is used to fund the care of others. Low (human) employment breaks that system.

Having a large pool of potential workers is meaningless if there is no money to pay them for the work, or to pay for the other necessary elements that go into that kind of care.

Lets face it, there is plenty of money about, the problem is that much of it is is being stashed in offshore tax havens.

>>Why can't elder care be a booming industry that sucks up all the unskilled labor left behind by automation?

Elder care is skilled labor.

> Why can't elder care be a booming industry that sucks up all the unskilled labor left behind by automation?

The problem is not finding jobs for all the people displaced by automation. The problem is finding paying jobs. In your example, who is paying for all that labor? If it's unpaid, why would anyone do it?

The obvious answer is that it's paid from the pension funds. But said funds are maintained by taxing income. So if your entire labor force is working to support older people by drawing on the pension funds that were originally produced by taxing those same older people, what happens when that labor force becomes old?

Note that it's only a problem so long as you need money to partake in the benefits of automation (i.e. to buy the goods that it produces) - but which is the case for our system today.

A promise from the government to pay you something in 30 years is inherently a promise to take the resources from your children, because there is nowhere else for it to come from. It doesn't help anything to have the government hold its own bonds; then your children inherit the debt instead of the unfunded program. It's the same number of dollars no matter what you call it.

And you don't want governments holding other investment assets because the government choosing what to invest the money in would be the world's strongest corruption magnet.

> Rather than reducing high borrowing levels, policy makers use financial engineering, such as quantitative easing and ultra-low or negative interest rates, to maintain them, hoping that a return to growth and just the right amount of inflation will lead to a recovery and allow the debt to be reduced.

This is a misapprehension of the relationship between debt and inflation. Inflation is how you reduce the real value of the debt. It's effectively a tax on dollars, and it reduces the debt on both ends: If the government creates new money then it can spend that instead of borrowed money, and if the value of the dollar goes down then the value of each outstanding dollar of debt goes down.

But none of that changes the problem with retirement benefits because, again, the government holding its own bonds is self-canceling. The only thing inflation might "help" there is to allow a reduction in real (inflation-adjusted) retirement payments without a nominal cut.

If you want the same real benefits then you need to collect that number of real tax dollars, and if you won't or can't collect that number of tax dollars then you have to pay lower benefits.

> A promise from the government to pay you something in 30 years is inherently a promise to take the resources from your children, because there is nowhere else for it to come from.

Not a big deal: those people helped their parents, their children will help them. It's fair and it's what happened for tens of thousand of years: people knew they must have children because without children they'll be pretty much without any support when old. However it works when the number of children is substantial. It can't work with 2 or 1 children per couple and that's where most of the western world is now.

Yet increasing the population will also lead to either war, or the destruction of the environment to the point where none can survive.

Yes. That's one of the many reasons why we're at those levels of natality now and why that kind of hand waving problems to future generations is becoming a problem. I was not advocating for having 4+ children.

Not only the Western world. Countries like India, Indonesia and Iran all report about 2 children per woman already. https://ourworldindata.org/fertility/

> A promise from the government to pay you something in 30 years is inherently a promise to take the resources from your children, because there is nowhere else for it to come from.

I'm frankly surprised at the level of ignorance in these comments. Debt is not zero sum in every regard.

Debt in the service of investing in something that will provide a return is not bad debt. For example: Investing $1 into things like preschool programs returns benefit to society of $3-$7. [1] Programs like universal preschool access are no-brainers yet they meet intense resistance from austerity-pushers on both sides of the aisle.

1. https://www.washingtonpost.com/news/fact-checker/wp/2015/04/...

The point isn't that the government should never borrow money, it's that it can't lend money to itself. It could easily be that there is a net benefit to society of collecting tax dollars and spending them on preschool, but you aren't adding anything by pretending the tax was to fund a retirement program even though the money was immediately spent on preschool.

The preschool program is independent of the retirement program and could exist without it with no change to anything except for the fiction that the tax revenue was for retirement and the debt for preschool instead of the other way around.

"A promise from the government to pay you something in 30 years is inherently a promise to take the resources from your children, because there is nowhere else for it to come from."

If you die in 25 years and pass that wealth to your children then it becomes a promise to take resources from somebody else's children and give it to yours.

It's simply cementing wealth divisions across generations.

> And you don't want governments holding other investment assets because the government choosing what to invest the money in would be the world's strongest corruption magnet.

IDK, sovereign wealth funds seem to work for quite a few countries

Mostly countries with a positive balance of trade, minimal or no public debt and minimal regulatory capture, none of which is true in the US.

And if you actually wanted to do that, it would require deep cuts to other government programs, because the social security administration wouldn't be there to soak up government debt anymore, which would raise interest rates. The same tax dollar can't both be invested in stocks and "borrowed" by the general fund to pay for education or the military.

I had a conversation with a retired person. They were upset that they had to pay taxes to support schools. Yet, they expected me to pay for their retirement in a system that I'll likely never see a penny of. This retiree had an income well above the median, and was at the same time getting full social security benefits.

Regardless of age, people will take and take if they're allowed. Unfortunately, we've built "safety nets" that enable this behavior.

This is a fundamental problem of democracy: a voting minority uses the government to extract wealth from other portions of the population.

Just look at the comments in this thread. Tons of "us" vs "them" when talking young vs old. We would not be divided without the government exacting the will of the voters on portions of the population for the benefit of others.

Instead of uniting us, democracy divides us.

I'm skeptical of purely financial measures of this. It would be nice if we could distinguish between purely financial "savings" versus real-world actions that might actually make things better in the future.

For example, there's such a thing as perishable resources. You can't "save up" labor; if people are unemployed now (and not doing something useful like going to school), that doesn't mean there will be more labor available in twenty years; it's just gone. Sunlight or wind power not used now is gone; it can't be saved for later. And even the things that can be saved often have storage or maintenance costs.

Finance makes it seem like you can save for your retirement or pass on wealth to your children, and that's true for individuals but only to a limited degree for society as a whole; the labor you use in twenty or forty years will come from younger people who are working then. Call it a ponzi scheme if you like, but this is the only way it can work.

On the other hand, natural resources are the opposite; oil or natural gas can be left in the ground as long as you like, and it's cheaper to leave it where it is than to do anything else with it. There are also long-term investments in people (education in particular) that could pay off later with a better educated workforce. Instead of deferring infrastructure maintenance, we could do it before it's needed, possibly freeing up future labor to do something else. Scientific research done now can come up with new techniques that will always be useful.

A couple of years ago there was a discussion in Netherland about increasing the retirement age from 65 to 67 because babyboomers were about to retire and the working population that would pay for it would shrink. (Also because people live longer; increasing retirement age is not unreasonable in itself.)

But because increasing retirement age just in front of people who were just about to retire would be too big a shock, it was decided to increase it slowly over a period of years. The end result is that all the babyboomers can still retire at or near 65, but it's the younger generations that have to keep working longer to pay for the boomers' retirement.

In the mean time, the mortgage crisis has undermined pension funds, which in some cases meant everybody had to chip in extra so the babyboomers could retire the way they were originally promised.

I have no idea where this is going, but I'm glad my retirement savings are actually my money rather than part of a fund that can be plundered or mismanaged by others. Dutch retirement funds are among the strongest in the world, but these past couple of years have seriously hurt people's trust in them.

I'm all for solidarity, but the solidarity has been a bit one-sided lately.

Just because it's "your money" now, doesn't mean it will stay that way permanently. In the US during the last decade, there's been talk of plundering 401k accounts...

That's exactly what I'm talking about. When it's my money, that plundering becomes theft. When it's not actually my money until it's paid out, I have less control over it and rules may be changed so it can be plundered.

In the past I've heard plenty of stories about American companies looting retirement funds in ways that would absolutely be illegal in Netherland, so even if I'm part of a big fund, I'm probably better protected than an American. But even that protection might not be enough if I can be required to pay extra.

I wonder if anybody ever has thought of a solution... why, we'd need massive growth (to increase the tax base), a reduced population, and the ability to completely eradicate some debts. As if you were removing the people who lent you money in the first place.

You know what fits that description? A bit of war. And that's exactly where we're heading. (Middle East is not going to get better. Refugee numbers will become staggering as climate change destabilizes even more countries. Russia has its eyes on Ukraine and the Baltic states. Europe is militarizing to counter that. Pakistan/India is about the same as it ever was - so, precarious balance, with nukes on hair trigger. China would like nothing more than a Greater Asian Co-Prosperity Sphere. North Korea is about as bonkers as the US)

Yeah, but we want to reduce the population old people, not young people. Maybe an intergenerational war.

Strictly speaking, we want to reduce the ratio of nonproductive vs productive people. Culling the old is not the only way to do that, and certainly not the best.

(edit: and we definitely need better language. "nonproductive" need not be synonymous with "having an income to support oneself", since there's still many productive activities that are not rewarded monetarily)

Even productive old people can't bear children.

Even non-productive young people can bear children.

If you "cull" young people (by war) you make the problem worse by having even smaller working-age population later.

Of course you can lose and have incoming invading horde which may solve the problem, FSVO "solve".

Here's the thing... It is very hard to tell now if we've gotten our money's worth for the debt. Many things are much better today than 50 or 100 years ago. Longer lifespans, better health care, less pollution.... Was it worth the debt? Hard to say.

Also - debt is just one person owing money to another. Yes someone today funded their consumption at someone else's expense. But guess what - someone tomorrow will get the dollar back to consume it. We can argue that as a country we will be paying for the consumption of others in the future, but is that so awful for the world's richest place?

(And please note - this rant comes from someone who believes we should live within our means and balance the budget)

We can't really "balance" the budget though, as there are just too many savings needs and the USA has become a debtor of last resort (which in turn is why the dollar is so strong and widely used). Money you need tomorrow can't really be saved under a mattress, someone has to "spend" it today, hopefully on something productive that will provide enough value tomorrow to pay it back. Saved money must produce growth, it has to be invested in someway, even if it is just invested in ultra safe but low interest government bonds and treasuries.

If everyone lived within their means, but still needed to save money, we'd all be screwed. These are wild imbalances one sees in china, where the lack of a safety net and sky high housing prices means one must save much of their income, dragging down consumption and leading to easy money for SOEs, who then often spend it unproductively.

By balancing the budget we wouldn't be getting rid of debt, we'd be stopping the growth of debt. Ideally, debt should grow at the rate of inflation, but there can be some large spending times and some low spending times. Debt shouldn't be larger than a significant portion of the economy.

We already have mechanisms to control debt accumulation: raise interest rates if we want to borrow more and lower interest rates if we want to borrow less. Interest rates have been rock bottom, negative if inflation is considered, and the US government has been practically paid to borrow via Treasuries.

> Debt shouldn't be larger than a significant portion of the economy.

Are you referring to just public debt? It really depends again on saving needs. It really isn't that simple. Debt in itself isn't bad, default on debt is bad. If you had to choose between debt and a depression, unless you are Hoover, you will choose debt.

You are assuming that savings needs to be govt backed debt. Why not baskets of corp debt or lower risk equities instead?

Home values appreciating out of proportion to salary increases are another way this is occurring. Discussed a couple of weeks ago.

It's great someone who works as a bus driver bought a home 40 years ago and it's now worth a mint. For that person. For the young person wanting a home now it's a very bad situation.

I read an interesting comment thread on a Seattle-oriented forum the other day: It was a thread about some landlord something or other--the topic isn't all that important, just that it brought up the classic landlord-versus-tenant debate--and someone made the comment that a sizable contingent of landlords in Seattle are one- or two-unit (usually standalone house or townhouse, but sometimes condominium or duplex) owners renting out places where the landlord previously lived. The point was that tenants should be more predisposed to give "landlords" as a group a break because many landlords aren't corporate real estate trusts.

A person replied to take issue with that statement and made a what I thought was a good point. He or she pointed out that all of those houses that are being owned by a small-time landlord and subsequently leased out are houses that are out of the pool of available properties for people to own and, possibly, redevelop into more dense or different housing styles. Ownership and renting in this way contributes to the upward spiral of housing prices: a person has owned a house in an area for a while and then moves out. Instead of selling, that person rents out the house while, in all probability, having purchased another house in the same area. As the first house's mortgage is paid down by outside rent, the small-time landlord has even less incentive to sell because, hey, "free"[0] money. Lather, rinse, repeat for an entire metro area and it's just as good a contributor to tight owned housing availability as the specter of foreign investors swooping in or people moving from other regions of the United States. And it reduces the pool of houses that could be used for someone to buy[1] into a market.

0 - I know that being a landlord incurs costs and that not all landlords, especially small landlords, make money on the deal but many obviously do because to do otherwise would be financially foolish.

1 - There's a really good argument to be had about whether or not ownership of one's residence is a good thing for society at large. I happen to think that yes, it is, but that the pool of "culturally acceptable residences" must be expanded beyond "detached house with fenced yard, large driveway, and bountiful on-street parking directly in front of the structure." Point being, people want to have stability in where they live and there's a wide gulf between "5,000 square foot minimum lot size" and "downtown condominium high-rise" that is not being served in many metropolitan areas.

Can you provide the link to that thread/comment? It sounds like they've made the argument I've been trying to make to my peer group (and their parents, who explicitly encourage this "buy a house/never sell it, but rent out/etc" behavior)--but have done so elegantly.

I'd love to see how they put it, so I could explain to others why these schemes to "invest" end up hurting the city when they play out at large.

I went looking but can't find the thread again. It was on the Seattle-themed subreddit so there's a better than even chance that it was yanked by one of the overbearing moderators there.

Rent-seeking is getting stronger and stronger because money is getting cheaper and cheaper. Those with good credit lines get ahead of the poorer ones and force them to pay them rent. I wonder if a reset like 2007/2008 is coming.

If there is a reset I hope it's actually effective at fully deflating the bubbles this time.

I think this is much closer to the issue. It is not about solvency of the global economy as a whole - that is absurd, there is so much loose capital floating around in corporate coffers and the stock market and HN is just a testament to how relatively loony ideas can still get millions in rounds.

The real issue is the dramatic wealth divide that has been growing worse over time, which bleeds into capital ownership by the rich as a means to extort rents from the poor. It doesn't matter what generation you are from - these debts exist not just to pay for past generations but to keep the current ones under foot of the wielders of the capital. Debt isn't just some evil force from the shadows, it is a business run for profit as the ultimate rent seeking, and is wholly intentional.

Short term thinking pays off and has been favoured by evolution, so human beings have a strong bias to choose short term benefit over long term gains.

Local maximums, or even cul-de-sac paths that are good in the short term but fatal in the long one, are chosen by short term gain maximization.

To overcome this bias, we need better education of the general population - the ones that vote and choose our future - so they understand the situation.

About pensions, it is ridiculous to compare "working people"/"pensioners". The correct comparative is "production capacity"/"pensioners needs". Comparing the output of an employee from 1970 with a 2050s one (the future they talk about) makes no sense.

About climate change, and general environment protection, the article is spot on. We ripe the benefits while future generations pay the cost. That's the only reason we destroy so much to get so few, because we don't pay the cost.

I'm as salty about baby boomers as the next guy, but it's a bit ironic that millennials don't realize that they'll be screwing the next generation over even harder. We are in the position we are in now largely because baby boomers didn't have enough kids to support them in their retirement.[1] But millennials are having even fewer kids. When millennials in western countries can no longer work, who will take care of them? Can they count on an endless supply of young immigrants raised and educated on foreign taxpayers' dimes?

[1] In the past, people had children so someone would be around to take care of them in retirement. Financialization of that process decouples the specific children from the specific retirees, but does not otherwise change the basic dynamic that there has to be a working generation to provide for the retired generation. You can't eat money in your 401k.

Not really, the biggest problem with the baby boomers aging was the "boom" part, there were a disproportionate number of people in that generation. Gen Y may be having less kids, but there will be less of them to support in retirement and the next generation might even get cheaper housing as the population shrinks.

By the time millennials retire, around 2045 and later, robots and AI are likely advanced to the level that they could take care of the old and produce most necessities of life. The labor needs of that future world would likely look quite different from what most of us envision now.

2045 is about as far into the future as the first episode of "Seinfeld" is in the past. Unless a black swan event happens in AI development, the world will look pretty similar to how it does today.

As a counter anecdote, one can also say that just 10 years ago, no computer systems came close to human at facial recognition or scene recognition for still images. Today's AI systems can caption events in videos. [1]

Researchers are also working on higher-level cognition tasks. We do not know for certain if there will be breakthroughs but there are many diverse tasks that seem within reach in the next 10-20 years.

What are human capabilities that you believe AI/Robots in 2045 will still likely be lacking?

[1] Dense-Captioning Events in Videos

"...We introduce the task of dense-captioning events, which involves both detecting and describing events in a video. We propose a new model that is able to identify all events in a single pass of the video while simultaneously describing the detected events with natural language.... " https://arxiv.org/abs/1705.00754

As a counter counter anecdote, scientists where estimating that perfecting automatic text translation will take another 10-15 years... in ~1960. I guess hoping that future technology will solve all out problems is similar to expecting next generation to pay our debts.

There's a difference between technical capability in a laboratory/R&D context, and widespread adoption of a technology.

In 2045 we may very well have highly capable robots, but IMO there's not a chance they will be widespread to the point originally posited: that they will take care of (most of) the old, and produce (most of the) commodities.

One consistent theme when it comes to futurism - whether it's the Jules Verne vintage or the Popular Mechanics vintage is the consistent under-estimation of how much it costs to change the physical world.

Software will continue to be the largest source of change between now and 2045, because software is cheap and generally does not seek major edits to the physical world. Robots and other physical manifestations of futurism are very different.

The futurists of the past predicted domed cities, flying cars, orbital space resorts, mile-high towers connected by floating trains, robotic servants, and the such - none of it has come to pass, and the present world is dramatically less futuristic-looking than originally predicted, because major edits to the physical world is crazy expensive.

Software has been largely an end-run around this expense, by being (nearly) free to deploy to the masses. Deploying billions of household robots, or something similar, is far less likely to actually happen.

IMO a more realistic way to predict the future of 2045 is to imagine how much technological advancement you can cram into a world that still almost entirely looks like the present day. The physical world changes at a comparatively glacial pace.

While I broadly agree that things don't usually change how we expect, I do think the near future could invert that somewhat.

If we look at you examples of failed predictions: > domed cities, flying cars, orbital space resorts, mile-high towers connected by floating trains, robotic servants, and the such we notice that the real reason none of these exist is because they are all essentially impossible to achieve with our current technology.

However, robotic servants are partially already here. We can verbally ask a device to play a certain song or order us some loo roll, and it works. We have autonomous cars that can, reasonably safely, drive us wherever we want to go. Elon Musk's new factory is, reportedly, almost entirely automated. And as most of this progress is recent, it seems likely that it will continue to advance for a while.

I will agree that there is significant friction against changes in society, which slow down adoption of new tech, but consider that robots in the context we are discussing are not a consumer good, they are a replacement for employees. So perhaps the most relevant question that will drive or stall adoption is: Is a robot more cost-effective than a human.

I also think watching the extent to which self-driving cars are adopted by delivery/freight/taxi companies, and the fallout from that, will be a fascinating (maybe terrifying) glimpse into that future.

How is what you are saying different from someone saying 50 years ago that they can build both planes and cars, so the flying car is surely achievable in a few years?

The problem is that extrapolation is fundamentally hard.

> As a counter anecdote, one can also say that just 10 years ago, no computer systems came close to human at facial recognition or scene recognition for still images. Today's AI systems can caption events in videos. [1]

These "basic" computer vision tasks seem so trivial compared to the actual AI that the original AI researchers famously assigned solving them to a grad student over summer.

On the other hand, the problems in most "Seinfeld" episodes have been rendered trivially solvable by a technological development that has occurred since the show originally aired: the ubiquitous smartphone.

I'm not so sure: https://twitter.com/SeinfeldToday

I believe with will need way less people than in the past due to automation and robots.

Its difficult to have conditions that have Millennials both supporting aging Boomers and raising their own children. Not without lowering standards of living and care for one of the three groups.

>When millennials in western countries can no longer work, who will take care of them?

What does this question even mean? There isn't a 1:1 ratio of nursing aids to nursing home residents.

>But millennials are having even fewer kids.

Thanks to the world the Baby Boomers helped create. Real wages have flatlined, careers being sold as more meaningful than families, and horrible maternity and paternity laws. Meanwhile, the wealth that a responsible couple generates is subsidizing the unemployed person who is on their fourth child. We basically live in a society that has inverted natural selection. That includes flooding the first world with people from the third world and pretending that we're all interchangeable and that the social conflicts created by multiculturalism aren't real.

I'm going to go out on a limb and assume that both of us live in the "first world", as you say. Where is the flood of third world people? I have never seen this "flood" in my 35 years wandering around the US.

http://i.imgur.com/nKcVpVU.png

We need to accept that the retirement model simple isn't sustainable. Either you live on less that your means while young and save for retirement yourself, or you work till you die.

Unless you're saving canned food that doesn't solve anything.

This is especially bad in Germany where the introduction of the Euro pretty much split the earning population in two.

Around 1990 the average retirement age in Germany was 60 years, retirees also got way more money (they still do) because back then people still earned proper wages and the retirement is based on prior income.

Since the introduction of the Euro real wages in Germany have kept on stagnating while living costs kept rising and live expectancy also increased.

This has lead to the absurd current situation where (old) retirees make up the bulk of the upper-income levels in Germany, while younger generations are not even sure they will be getting any retirement at all down the line, as German government keeps increasing the retirement age (67 years now, estimated target being at least 69 years) while decreasing the amount of retirement money people actually get.

The worst part is that a lot of this is based on the naive assumption that life expectancy is gonna keep on increasing and people can stay "productive for longer", like we are all gonna be able to work till 70+ by 2030. But nobody answers the question that actually matters in that regard: Where and as what are all those people supposed to work?

And why should any businesses hire a 60+-year-old guy vs hiring from a flood of overqualified, eager, and cheaper young folks?

A large part of this article discusses future liabilities, but makes no mention of growth.

For instance, it says total UK liabilities are 1000 times gdp, but past gdp growth over the same duration those liabilities are amortised over is 3000%.

Past performance would suggest this seeming over committed will simply be eclipsed.

There is no guarantee gdp will keep going up, either globally or in particular countries, but it does indicate that, growth is the way out and we should places our bets there.

As recent small state low tax economic policy has failed to deliver growth like we saw under bigger state higher tax policy, maybe we'd be richer if we reverted to that.

Growth is exactly like Jesus. Some people strongly believe it will return, despite strong evidence to the contrary.

And we're all cargo-culting around it, changing laws, reducing taxes, opening borders to lure it in, like if growth was a wild animal afraid of fences.

Meanwhile, old people live the good life of having revenue without doing anything productive. Good for them, but I'd resent them less if they didn't vote for Trump, May, Le Pen.

Now that's a little pessimistic.

Look at the graph: http://www.ukpublicspending.co.uk/spending_chart_1950_2010UK...

Exactly what would make the next decade special compared to the last 5? If lack of growth is unusual then expecting it to return would seem rational.

Have faith brother!

This log version might be better: http://www.ukpublicspending.co.uk/spending_chart_1950_2010UK...

You can see the S-shape in the curve. We hit peak growth in the 1970s and it has been slowing since.

I don't know who to blame here: the people for allowing this mismanaged of future problem, or the politicians doing the mismanagement.

As I just said this morning: "The reason you have to work longer before you get to retire is because the state failed to save and put aside the money required. And they have known for years this was coming." Lets hope we do better on global warming or other catastrophes.

Who is to blame?

Part of the original article is a lie (at least as how it pertains to the US). The social security system will eventually be unable to pay out at current rates. But notice how nobody worries about whether we'll still be able to spend 10x what everyone else spends on the military?

A lot of this is about how we plan on spending our money. The current argument is framed as "if we don't change anything, this might happen" but the change everyone focuses on is the change in how much money goes towards satisfying the retirement savings.

You notice nobody suggests buying less aircraft carriers or scaling back the military? Instead it's all about not reducing any other spending. Putting the spotlight on one particular form of spending and then declaring that if it can't pay for itself due to demographic changes, we should scare the shit out of everyone and privatize it and pour trillions of dollars into Wall Street.

>Instead it's all about not reducing any other spending.

I'm even more amazed how many people think the welfare budget is supposed to stay fixed, not accounting for any growth in population at all, while military spending, going over budget, is considered the most normal thing in the world and leads to an increase in military budget.

I've always considered myself a fiscal conservative. Not the "let's cut all welfare" type of fiscal conservative but the kind who says, "Ok, we just found out that the Pentagon can't account for billions of dollars worth of equipment. Let's figure this out and try to use taxpayer money as efficiently as possible."

I think if you cut all of the waste and abuse and held agencies to certain targets (i.e. 90% of taxpayer funds earmarked for education have to make it to the classroom level) you would free up enough money that you could actually create poverty programs that solved poverty. You could improve education without paying more for it. You could smooth out demographic shifts that challenge the social security system.

The government is a big money sucking machine. It's not that we aren't paying enough taxes, it's that they're being spent irresponsibly.

>I think if you cut all of the waste and abuse and held agencies to certain targets (i.e. 90% of taxpayer funds earmarked for education have to make it to the classroom level) you would free up enough money that you could actually create poverty programs that solved poverty.

You might not realize it, but that view is very similar to planned economies by a central government, just like in the USSR.

If you assume government agencies are merely inefficient (sure they are, barely anything is perfect) and you start dictating efficiency targets, you gonna get pretty much the same result as the USSR got: Lot's of corruption for the sake of keeping appearances of high efficiency intact.

Imho the solution can't be mere better micromanagement, that would assume up till now people have just all been too incompetent, which is, of course, an appealing thought because it makes it easy to point fingers and makes the solution looks so simple (if the lazy people would stop being lazy then everything would be fine!), but it's also a pretty generalizing thought and as such I don't think it represents the issue in its completeness.

An argument could be made for "simplifying government". That's where something like a universal basic income, ideally linked to GDP, might actually be quite useful. If a UBI is in place, then there's no more need for additional welfare programs, as such it would allow for the removal of a massive bureaucratic overhead.

When I was young, I used to love articles like this. Now that I'm old, I think they are stupid.

Empty statement. Back up why you thought they were loveable and what makes them stupid now.

That statement doesn't need backing up.

It is self contained, and speaks directly to the nature of human opinion.

But it doesn't add any depth to the discussion. I'm sure everyone has specific positions on how the article makes them feel. However, HN is about getting to know different standpoints which have a certain amount of profundity to it. Just saying: "I like this", or "I used to like this", doesn't give any substance.

As I understand the statement's intent, it has layers of depth and is concisely profound.

It speaks directly to (IMOP) the root of the problem the article talks about.

Well, I can think of a couple of reasons why the OP thought it is stupid now:

- He understands the article is preaching to the choir.

- He thinks the article does not take into account the total flow of capital. His better understanding of economics makes him understand this now.

- The article does not cite any sources.

- It (apparently) is a common theme that older plebians tend to vote more conservative. Perhaps he is referring to his changing political position.

- Without dialogue, these articles are fundamentally empty. They do not help different actors come together.

- The article is using various framing devices to make it appealing to a certain audience. The OP currently feels exalted from this pleading to the hoi polloi.

- Due to the effects of filter bubbles and targeted psy-profiling, the OP has unknowingly narrowed his vision, causing him to label the article stupid.

Which one is it? I'd like to know because I might be missing the point here.

So, my point is: I can create many layers of depth by just using my imagination. But that doesn't add anything to the discussion. I could say I'm a post-post-modernist or a holistic a-structuralist, which might capture some depth and raise some questions, but it does not allow for any kind of true dialogue.

Young OP thinking different than old OP is an important contextual modifier that excludes most of those options as reasonable though.

But everything isn't an argument (er, I mean "dialog") so feel free to be as right as you wish to be.

Allowing people to express themselves and taking the time to consider the meaning behind the expression is both polite and can be quite enlightening (as well as entertaining). If you are constantly arguing or saying things like "source?" for a personal point of view (perhaps because you differ in viewpoint or feel a position you hold is being attacked) you miss both of these benefits.

When I was young I thought razor whit logic and proving verbal correctness somehow trumped experiential reality. But now I am old I think differently.

What makes you feel you changed? Was there something about growing older that affected your point of view?

When I was young, I thought the world owed me. As I grew older, I learned about it. I gained perspective, and I now see that the articles like the one above are not constructive, fail to see the big picture and offer absolutely no solutions.

The young of today are likely to live longer and more prosperous lives than previous generations, worldwide. They have higher quality of life and more opportunities than previous generations.

The expanding credit market? It's due to the expanding world economy. We're on an exponential growth curve, and the young of today would be wise to take advantage of the incredible opportunity rather than lament circumstance.

Why are pension funds not changed (gradually) so that i get my own money back (+interest) instead of paying the pension for current retirees?

It's blatantly obvious that not changing the system will lead to issues as the populace grows older.

That’s how they worked originally. WWII killed that concept. Now in the past decades people switched to private pension funds, which do that, but that doesn’t fix the inherent issues with the system.

Apparently, we are too stupid to maintain civilization...

While your comment may seem simplistic, as years pass and as I study human history in more depth, I'm afraid that I'm beginning to nurture that exact sentiment as of late. It seems that Western civilization was not an inevitability, but a lucky roll of dice (or unlucky, depending on who you ask).

On average, we are not as intellectually capable as our civilizational accomplishments may indicate, quite the contrary. Seeing the missteps that we keep making, looking at our shortsightedness and our inability to act collectively towards long-term prosperity.. It's just depressing.

What bothers me the most is the degree of such incompetence. It should't be so widespread.

I know we don't on usually quote poetry on HN but there's some apropos Bad Religion - "I've got this one problem where I live forever // I've got just a short time to see."

The human mind is not apparently built for thinking at the scales (sizes, time frames) at which humanity operates. The limited distribution of competence is an amoral phenomenon - as a first approximation, I like to think about it as a natural consequence of limited information transfer between generations. Should or shouldn't is beside the point.

I liked this piece which touches on many of these issues: http://www.ianwelsh.net/the-basic-psychological-structure-of...

There's also the sociocultural aspect of it. Weak and economically dependent youth -> conservative values, avoidance of confrontation with parent generations. There is no such thing as the rebelious spirit past generation, and this is prominent in millenials.

Put your money into a full reserve bank, there quite a few around. I have an account with one of such. It also makes sense to open a "metal account" in some offshore bank abroad (remember, US was prohibiting its citizens from buying gold less than 50 years ago)

The baby boom generation, as well as the "Greatest" generation before them, have saddled our future generations with huge liabilities. Sadly, not every younger Gen X'er, Gen Y'er, Millennial, or Gen Z'er realizes the magnitude of the debt left behind -- and more importantly that it reflects future tax increases or government services that won't be able to be provided. The only hope is that the current generations will have accumulated enough personal assets to pass along to their kids and grandkids to offset some of this deficit.

The article cites no scientific evidence (references), follows no scientific methods and can be regarded as biased. To strengthen my point, the articles compares 5.3 / retired in 1970 vs 1.6/retired in 2050 without taking into account automation or scientific / technological progress. The analysis is therefore unsound.

Austerity NEVER works. It's small minded and looks solely at the debt instead of the investment.

IF we get debt for a billion dollar highway system but that highway system helps the country make billions of dollars over the time of the loan. That is called an incredible investment.

Greece, Kansas, Louisiana, etc have austerity governments and they are falling apart.

Investment pays off dividends...whereas austerity kills.

Greece is not falling apart because of austerity government but but because of the ones before that which were the opposite.

Ok..given that's the case. There are lots of governments who run high debt levels and aren't in that quandry.

The debt isn't the problem. It's misuse of the debt that's the problem.

Even most companys run standard levels of debt every quarter, because borrowing is a very powerful tool IF USED CORRECTLY.

So, there's a significant distinction there, the I feel less educated and less economically inclined people fail to grasp....

Debt can be a very positive tool if used correctly.

I actually agree. The problem is that it feels to me that governments use debt incorrectly far more often than companies. I believe that it is because the current political systems reward short-sighted populistic debt more than long term investments which are often unpopular.

As a consequence, austerity is often the only option for countries that obtained lots of debt irresponsibly.

I don't think old are really eating the young. To me, this intergenerational conflict is exaggerated. As technology improves and so is human life span, we all have to face this when we become old.

Hey, fellow older folks in the US! Wanna do your part to help deal with this problem? Wanna do it without all the trouble of getting organized?

Use some of your wealth to pay off the education loans of a younger friend or colleague.

This effect isn't new. Before antiquity, Greece had lush forests. Then, they cut off all the trees to build ships so they could fight their wars and conquer the world. And Greece has been a desert ever since.

Theory which is largely challenged today.

Where would they have taken the wood for their ships from?

Looking at youth unemployment rate (44%, 38%, and 25% in Spain, Italy and France, respectively), you will find how serious this issue is. It's not only about young people's job skills.

What should have been done was to make some precautions for the inevitable. There was always a good chance at the start of the various welfare states in the last century that people would live longer.

Why didn't they say "we'll pay pensions to the oldest X% of the population" or "we'll pay x% of GDP to the oldest people, according to living standards of the time"?

Instead we have societies where people feel entitled to be pensioned at a specific age. And it's very hard to change that age, while at the same time they become a larger and larger voting block.

Ireland raised the age at which people are entitled to a state pension. It's moving from 65 to 68. https://www2.deloitte.com/ie/en/pages/deloitte-private/artic...

Is the proportion of people being taken care of higher or lower than when the system came into being?

I get that a lot countries are aware of the issue, but moving a fixed age to another fixed age does what the article says: it kicks the can down the road.

Yes, but the road has a stop sign.

Not true, as long as we can keep the money printing machines working.

More like the rich are eating the poor.

Nom nom nom

Is it any wonder this is happening when the central organising feature of our political, economic and personal lives is a huge ponzi scheme? This reality has destroyed the possibility of changing a system to benefit all. This ponzi scheme is the housing market: since the late 90s this has ceased to be a true market, and instead became a pyramid scheme in which value growth and price is based on the expectation that money will be sucked in from new investors, not derived from the utility of house-ownership or expectation for yield. This is the very definition of ponzi - and it governs so much of our lives. Why are the young and the old so segregated in their voting? It's because they are either the beneficiaries of or the 'bigger suckers' in this state-sponsored fraud - and can be mobilised accordingly. Until the housing market is dealt with, it will be impossible for politicians to create policies which 'grow the pie', increasing wealth for all, rather than simply carving it up - governing by robbing Peter to pay Paul.

The only solution I can see if for the young to organise to boycott house purchase, but I am not yet sure how realistic this.

Housing is just now starting to emerge from a huge correction. Despite all the bullshit surrounding housing, it is still a functioning market. (meaning, prices are set by scarcity and demand) There are still inequalities there but it's not nearly as big an issue as the debt discussed in the article.

> prices are set by scarcity and demand

Scarcity which is artificially limited by zoning and demand which is artificially inflated through near-zero interest rates.

Reply on news.ycombinator.com