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The Old Are Eating the Young (bloomberg.com)
338 points by petethomas on June 14, 2017 | hide | past | web | favorite | 448 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.


> 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?


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.


> 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.


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-...


> 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.


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?


"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.


> 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.


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.)


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!


"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)


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 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.


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.


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.


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.


> 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.


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


> 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.


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.


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.


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.


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


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.


>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.


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?


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.


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.


> 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.


> 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.


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


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.


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.


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.


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.


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...


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.")


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.


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).


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.


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


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


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.


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.


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.


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.


"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


> 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.


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.


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.


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.


>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"


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".


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.


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.


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).


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.


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.


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.


>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.


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

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


"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.


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.


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.


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).


> 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.


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?


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.


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.


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.


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.


fair and square

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


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


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).


> 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.


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.


> 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.


Most of the money printed is also after 1990.


Not if they led us toward this


"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.


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.


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 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.


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).


"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...


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.


"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.


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.


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

> need

> 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.


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...


> 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.


> 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.


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)


>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.


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.


"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.


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.


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.


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 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 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.


> 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.


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


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.


>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 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.


>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.


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.


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

/s


> 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.


"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.


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.


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.


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?'


> 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.


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.


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." - ":|"


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.


> 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.


> 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...


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.


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.


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.


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