by Ryan Streeter on June 18, 2012. Follow Ryan on Twitter.
Economic historian Niall Ferguson says, “If young Americans knew what was good for them, they would all be in the Tea Party.”
He’s right. It continues to amaze me how utterly obvious it is that the rising generation is being taken to the cleaners and yet how little anyone really ever talks (or cares) about it. Our politicians keep “reassuring seniors” (you hear that expression and its variants a lot) that we won’t do anything to harm their benefits since they “paid into” (you also hear that a lot) the system. But of course the reality is that most seniors will take far more out of Social Security and Medicare than they ever paid in.
They can thank younger workers for filling the gap between what they paid and what they consume.
And that’s radically unfair, even immoral.
Ferguson puts it this way:
Often [national] debts get discussed as if they themselves are the problem, and the result is a rather sterile argument between proponents of “austerity” and “stimulus”.
I want to suggest that they are a consequence of a more profound malfunction.
The heart of the matter is the way public debt allows the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn.
The problem, he notes, is far worse than we often think, because even our mind-numbing debt numbers don’t include the biggest culprits in the future:
But the official debts in the form of bonds do not include the often far larger unfunded liabilities of welfare schemes like – to give the biggest American schemes – Medicare, Medicaid and Social Security.
The most recent estimate for the difference between the net present value of federal government liabilities and the net present value of future federal revenues is $200 trillion, nearly thirteen times the debt as stated by the U.S. Treasury.