The boomer generation hit the economic jackpot. Young people will inherit huge debts

Young people in Britain are understandably despairing of the economic pressures they face, and feel that previous generations enjoyed a fairer economic environment. And to further heighten their concerns about home ownership and the precarious job market, came the bleak announcement that UK public debt now stands at 100% of GDP.

Taxpayers will have to shoulder this debt burden for decades to come. Interest payments on the national debt, or interest-only payments, currently account for about 7.3% of public spending. This is more than the amount spent on defense (4.8%) and transport (3.8%).

And while some of the remaining funds will go toward future essential public services, historic underfunding of public investment in water, rail, and other critical infrastructure (less money spent by previous generations) The funds will also be used to solve problems that arise.

Indeed, in the 1980s much of its infrastructure was used by the British government to help its own finances, and assets, including British Gas, were sold off at bargain prices. Baby boomers and older generations who could afford to buy stocks often made substantial profits.

There are also other types of costs that today’s younger generations have had to bear. Universities and schools were closed during the coronavirus lockdown, mainly as young people were forced to stay at home to protect the elderly. While 60% of retirees voted in favor of leaving the EU, the majority of young people voted against it, meaning they lost their freedom to live and work within the EU. Britain’s wealth has also declined due to its exit from Europe.

But not everyone is poor. Over the past 20 years, the average income of pensioners has increased by more than 50% on average, while the average income of working-age people has increased by less than 10%. Pensioner households now have a higher median income after housing costs than households with children.

Most of the country’s wealth is now in the hands of the elderly. In 2018, one in four people aged over 65 lived in a household with total assets of over £1m. Poverty rates for pensioners are now lower than for the rest of the population.

However, pensioners receive all kinds of unconditional discounts and benefits, such as free or discounted public transport. Their income is exempt from national insurance contributions, and their state pension has a triple lock, ensuring it grows faster than their labor income.

Until recently, the winter fuel allowance meant that anyone born before 1944 received £300 (reduced to £200 for younger pensioners).

Boomer and bust?

Although there is moderate public support for restricting fuel allowances to poorer pensioners, the issue of recovering funds from older people remains a very sensitive issue. (Back in 2017, then Prime Minister Theresa May was forced to quickly reverse course when she proposed using pensioners’ assets to finance rising health costs.)

One reason for the reluctance to accept awards from older people is that while most pensioners are better off (compared to the working population), this is not the case for the poorest people. Possibly. And some pensioners don’t claim the benefits they’re entitled to, and the last thing a civilized society wants is to freeze out the elderly.

But the glaring economic disparities raise broader questions about intergenerational justice. What does one generation owe to subsequent generations?

And it’s not just a question of money. Global warming is also a problem that older people have spent most of their lives not paying for, and the burden of repairing environmental damage is once again falling primarily on young people.

Perhaps a fair philosophical approach is that if we can generally expect future generations to live longer and healthier lives due to more choice and comfort for consumers and improved quality of life, then There is probably no problem even if the company does not pay the cost.

But that doesn’t seem to be expected at the moment. While incomes have stagnated and life expectancy has stagnated, home prices have become less expensive relative to incomes than they have since the 19th century.

In that sense, I think many people, no matter how old they are, empathize with the youth of today. And they may even argue that it is time for the government to focus on policies that clearly benefit young people, such as housebuilding, various forms of taxation, and national insurance coverage of pension income.

It could also change fiscal rules to allow for more investment in national infrastructure, increase taxes on fossil fuels for the energy transition, or increase the cost of higher education funding among all graduates, regardless of when they graduated. It is also possible to share the costs more evenly. degree.

Such changes would result in dramatic changes to economic systems that seek to redistribute wealth not only among citizens but also between generations.