Here’s Why Younger Generations Need to Embrace Austerity
- Posted on June 18, 2012 at 7:39pm by
Becket Adams
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While many view the global financial crisis as little more than an argument between “austerity” and government spending, the historian Niall Ferguson argues that there is a much bigger issue at hand, namely, that governments have allowed “the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn.”
Indeed, many politicians and economists think of the growing debt in the U.S. and the E.U. as something of an inexplicable phenomenon rather than what it really is: the product of human choice. Ferguson argues that the system and the people in charge brought us here.
Greek public sector employees chant slogans during a protest against
the austerity measures outside the Greek parliament in Athens on November 15.
So young voters need to become more proactive and engaged, right? After all, they’re the ones who will have to pay for all of this. There are two problems with this: a) young voters are rarely engaged because they don’t understand the stakes and b) young voters rarely understand the stakes because governments do a poor job of reporting the actual cost of their policies.
“[O]fficial 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,” Ferguson writes, referring to the fact that most “official” government figures regarding debt are terribly misleading.
He continues:
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.
Notice that these figures, too, are incomplete, since they omit the unfunded liabilities of state and local governments, which are estimated to be around $38 trillion.
The frightening thing about these figures is what they represent: retiring generations sticking younger (and yet-to-be-born) generations with massive bills. Because of the spending habits of today, the generations of tomorrow will have to find ways to pay for everything — and it’ll either be through higher taxes or massive cuts in public spending.
Ferguson argues that the best way to approach the problem of unsustainable debt is to restore the “social contract,” as Edmund Burke referred to it, between generations. See, the contract is not just between citizens here and now but it’s also a contract with those who came before us and those who will come after us. What we see in these massive national debts is, as Ferguson writes, “a shocking and perhaps unparalleled breach of precisely that partnership.”
Clearly, this must change. One generation cannot rob from the next, otherwise the entire contract, the whole purpose of coming out of Hobbes’ “jungle,” falls to pieces. Strong leaders must attempt to reign in this “generational theft.”
Niall Ferguson (image courtesy BBC)
There are different ways this can shake out. Obviously, the most desirable scenario would be one where “the proponents of reform succeed, through a heroic effort of leadership, in persuading not only the young but also a significant proportion of their parents and grandparents to vote for a more responsible fiscal policy,” he writes.
Of course, how do you do this when younger generations don’t fully grasp the long-term consequences of present-day spending policies?
Ferguson has two suggestions:
Public sector balance sheets can – and should be – drawn up so that the liabilities of governments can be compared with their assets.
That would help clarify the difference between deficits to finance investment and deficits to finance current consumption. Governments should also follow the lead of business and adopt the Generally Accepted Accounting Principles.
And, above all, generational accounts should be prepared on a regular basis to make absolutely clear the inter-generational implications of current policy.
Active engagement, strong leadership, and actual transparency on spending policies can help restore the contract between generations. But most importantly, it comes down to people. Individuals must make themselves responsible for the spending of their generations and reign in their own governments.
“We blame the politicians whose hard lot it is to bring public finances under control, but we also like to blame bankers and financial markets, as if their reckless lending was to blame for our reckless borrowing,” Ferguson writes.
“We bay for tougher regulation, though not of ourselves,” he adds.
Read Ferguson’s full op-ed here.
Front page photo source: Washington Times
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321481
Posted on June 19, 2012 at 9:02pmA word of wisdom from my grandmother. “To buy that which you do not need is like steeling from yourself.” That goes for the government and people too.
Report Post »dmerwin
Posted on June 19, 2012 at 8:36pmWhats that song? “More, more, more”
Report Post »MRMANN
Posted on June 19, 2012 at 2:01pmWe ALL need to embrace austerity
Report Post »Force2bewreckin
Posted on June 19, 2012 at 12:36pmyoung people need to tell the federal government to go jump in a lake so we can get back to States Rights. State Rights is the only way we will ever fix our country. End the Fed and limit the power of the federal government.
Report Post »theabolitionist
Posted on June 19, 2012 at 9:34amthere are some who say, government is a compact between those who govern and those who are governed. but to say this is putting the effect before the cause. Humans existed long before government was even a thought. therfore, there could be no government to have a compact WITH. the reality is that individuals came together in thier own soverign right and formed a government and a constitution to keep it under control. that is the only princible which government fourishes under and the only right which it has to arise. History proves that governments are much more likely to try and disconnect the people from eachother rather than bringing them together. Human Nature never changes in terms of abuse, therefore, we must always guard against abuse, since human nature will always be flawed. People uniting, while understanding and embracing human nature, along with CONSTITUTIONAL government is the best way to guard against michief such as austerity measures, the violation of rights, and especially excessive debts. The moment society believes they can no longer help eachother, that uncle same must do it; and disconnect and fail to hold representatives accountable while upholding the system, is the moment we lose america.
Report Post »Individualism
Posted on June 19, 2012 at 7:26amJust imagine what all that money our goverment spends on the military and defense that doesn’t do the average joe any good would do if spent on the people like their retirement, education, healthcare or rent.
Report Post »hempstead1944
Posted on June 19, 2012 at 7:46amPoor fool……if it were not for the armed services of the U.S. do you really think you could live the life that you do?
Report Post »johnjamison
Posted on June 19, 2012 at 8:26amThe governments of the world are doing this to collapse the system. They have tied all of the economies together and when one major one falls they all fall. And out of the ashes they think the one world government phoenix will rise. How ever they must disarm the American first as we won’t stand for our country being sold out.
Report Post »Individualism
Posted on June 19, 2012 at 7:21amThat was one of the goals by Paul and the movement he set up and should continue but also we have to get rid of the central banking system otherwise there won’t be any work for money to embrace austerity. The only way now i can see things changing is sadly a violent revolution when its get so bad nobody has anything.
Report Post »Individualism
Posted on June 19, 2012 at 7:33amThe Revolution would be as frightening and nasty or even more than what Glenn Beck has talked about. it would be colossal hell.
Report Post »Upthegut
Posted on June 19, 2012 at 7:11amTotal spending of local, state, and the fed government is around 6.8 trillion per year. This is almost 22k per year for every single american citizen alive today. For my family of four that is 88k a year and for the last twenty years (the age of my oldest child) that comes to 1.76 million spent by our government in my family’s name. How do people not see that these figures are totally ridiculous. Can it really be called “austerity” if we drop that number down to about 12k per year per person? It sounds more like common sense to me, not austerity.
Report Post »Quasimofo
Posted on June 19, 2012 at 2:12amEmbrace austerity? More like “Embrace Serfdom!”
Report Post »TLS
Posted on June 18, 2012 at 11:42pmYou can not trust our government! They will soon steal your IRA if we do not change things Quickly! Where is the leadership?
Report Post »OperationNorthwoods
Posted on June 18, 2012 at 10:48pmWhy not mine Gold and drill for oil on public lands and then use the profits to pay off the debt?
Report Post »ktmrider1
Posted on June 18, 2012 at 9:25pmdumb and dumber. the future is going to be really messed up with the current crop of absolute idiots coming up. but hey the democrats love them
Report Post »encinom
Posted on June 18, 2012 at 10:14pmAusterity kills the middle class and jobs, while letting the rich retain more and more of their wealth. Our job recovery is slowed by the loss of thousnads of government workers, by the failure of the government to invest in infrastructure. Ayn Rand model is a failure of greed.
Report Post »C. Schwehr
Posted on June 18, 2012 at 10:22pmENCINOM: In other words, according to you…light is dark, night is day, government spending is real production, and the free market kills jobs….geez, are you for real, or just a sick parody of 1984???
Report Post »Git-R-Done
Posted on June 19, 2012 at 2:34amEncinom is just another dumb Marxist who expects taxpayers to take care of losers like him from cradle to grave rather than going out and providing for himself.
Report Post »HowardSternIsABigot
Posted on June 19, 2012 at 7:28amencinom is an embarrassment to trolls. encicom hasnt had a clear logical thought in its whole life. Coulds you imasgine actually having a discussion with this troll? Ill bet soros is asking for his money back from this failure. Have you ever seen anything witty posted by it? nope, just being a contrarian, and doing a badf job at that. Sharpen your wit or go to huffpo and practice.
Report Post »KeithOlberdink
Posted on June 18, 2012 at 8:56pmThe bankers got bailed out and got bonuses, that is the perception around the world. Now, everyone else must accept austerity… You don’t have to be a rocket scientist to see how this is gonna unfold. Get your marshmallows out, Europe is gonna be set on fire.
Report Post »CulperGang
Posted on June 18, 2012 at 8:39pmNobody has to have austerity. FRACTIONAL BANKING IS MAKING BILLIONERS INTO TRILLIONERS. The world is being CONNED by the major bank houses out of their wealth.
ARREST ALL OF THE GOLDMAN SACHS CROWD sieze THEIR stolen assest and give it back to the countries. ARREST THESE ORGANIZED CRIME SYNDICATES known as BILDERBERGERS who run GOLDMAN SACKS.
End fractional banking. Dismantle the Federal Reserve of profiteer bankers and REDISTRIBUTE THEIR WEALTH back to whom they stole it from. Start cracking their heads!!! not the poor slob trying to survive under the chaos fractional banking and derivitives have caused.
Report Post »C. Schwehr
Posted on June 18, 2012 at 10:17pmAnd you might want to learn proper english….and learn that your own solution is to merely kill off the banking community and redistribute their wealth A LA SOCIALISM!!!! Actually, doing away with the federal reserve is the only portion of your ignorant little rant that makes any sense…Do away with the banker’s primary route to unlimited wealth, and the bankers lose their power to control the U.S. economic system…which was their primary reason for forcing the Federal Reserve on the American people in the first place….
Report Post »HowardSternIsABigot
Posted on June 19, 2012 at 8:08amYou are right-culpergang. The bankers are thieves, the federal reserve is merely their tool. Split hairs all you want it still comes down to a scheme established to bankrupt the USA and capitalism. This isnt socialism its fascism. Instead of governing ourselves the money printers dictate. Isnt that what happens in Grease? An appointed government instead of an elected one, imposed from outside by the bankers.
Report Post »Helpful
Posted on June 18, 2012 at 8:33pmWe may or may not embrace Austerity, we might do like the Govt. and make believe we paid our Tax’s. Paid with what,Funny Money thats not worth anything, except a promise that we will pay,pay with what? What Right did the President have to get us in debt, and why should we pay for it. I’m tired of this Crap, its nothing but make believe with Play Money…………
Report Post »CulperGang
Posted on June 18, 2012 at 8:42pmwe are not gonna pay back, jack. it is all bogus debt. WE ARE GOING TO ARREST AND CONFISCATE THEIR ASSETS. That is what the Greek should do. Go after the bankers and their assest. Debt out of a Ponzi game??? HELL NO not for America. Let Obama pay for what he racked up.
Report Post »soybomb315
Posted on June 18, 2012 at 8:24pmThe same generation of voters that have plundered this country and saddled the youth with insane amounts of debt are the same people who picked Mitt Romney and rejected Ron Paul.
Report Post »freeberty
Posted on June 18, 2012 at 8:40pmSoybomb
Mitt Romney has said that he is not in any kind of hurry to cut the deficit, which means it probably won’t be cut at all. I guess people are that greedy and narcissistic, that they would vote for someone just to keep that government check coming in.
Report Post »Mutiny
Posted on June 18, 2012 at 9:06pm@soy
Hit the nail on the head again.
Report Post »Classical Liberal
Posted on June 19, 2012 at 2:18am@soybomb. Absolutely correct.
The irony of this story, that speaks about the youth taking a stand against the debt being forced on their back posted on a website that threw the one man who wanted to and could have stopped this madness, and his youthful following, under the bus, is pitifully funny to read through.
Seriously, wake the hell up America. The time for the phony left versus right BS is over. No part of our broken system is going to be fixed under Romney because he doesn’t want to fix it. It’s like beck always says, “it’s all about money and power.”
Report Post »flyingeagle
Posted on June 18, 2012 at 8:23pm12345wert
Report Post »flyingeagle
Posted on June 18, 2012 at 8:20pmabcde
Report Post »freeberty
Posted on June 18, 2012 at 8:08pmI am just curious from those that take a government check ,whether it be from a military contract, federal, state, county, city, government worker type job, farm subsidy, social security, Medicare, Medicaid. I asked this question before and all I hear are crickets.
What kind of lowlife do you have to be to knowingly steal and commit filicide on your future generations, do you have any kind of good reasoning beside the one that a broodmare in section 8 would give?
Report Post »David Foxfire
Posted on June 18, 2012 at 8:24pmI’ll answer your question, being someone who’s on SSI, Medicare, and Food Stamps because I’m autistic. I’m stuck on these programs because (1) there isn’t any jobs available for me, and (2) those who have the jobs flat out won’t hire me. Because I’m autistic.
I’m currently writing fiction books–and occasionally asking if I can write a fiction series here on the Blaze–with the hopes of getting published and eventually out of these programs without having to rely on sleeping in a tent until I get arrested. My books are available at foxfirestudios dot net. I strongly suggest purchasing a book from that site instead of thinking that I’m some Occupier bum and decry me of not getting a job, so I won’t Elvis my computer screen. Thanks in advance.
Report Post »C. Schwehr
Posted on June 18, 2012 at 10:29pmI do love it when an ignorant person lumps together those who are on welfare with those who work for a living….If you can’t tell the difference, then you should not be making ignorant comparisons like this. I work full time in a job that many won’t do because it happens to be dangerous. It also happens to be a state job. I earn my money. So how does that make me a thief? Is it because you don’t want to be bothered with paying for good roads? Try getting goods to market on the same roads that existed before our modern road system was built…it takes money to provide the constant maintenance needed to carry millions of vehicles for thousands of miles…Sorry if you don’t want to pay for the priviledge…
Report Post »term limits for congress
Posted on June 18, 2012 at 8:00pmIt will not change until our currency is worthless. Or, we set term limits for elected officials.
Went to high school with a girl who wanted 3 kids before she graduated – wanted a 3-bedroom townhouse instead of a 2-bedroom flat (public housing) when she ‘graduated’. She did just that.
Feds are paying for advertising to get more people to sign up for WIC and food stamps.
When the middle class and families are dissolved, I suppose we will have arrived at our destination. Vote Democrat (like France) and let’s get to the finish line.
Report Post »freeberty
Posted on June 18, 2012 at 8:32pmIt’s far beyond the broodmare in section 8, it’s anyone that takes any kind of government check, they are all part of a welfare subsidy program as far as I concerned. In my area even the religious organizations and hospitals are fighting over their government checks.
Report Post »Sicboy
Posted on June 18, 2012 at 7:57pmREAD IT……http://www.usnews.com/opinion/blogs/economic-intelligence/2012/06/18/how-wall-street-and-unions-are-ruining-politics
Report Post »chatmandu002
Posted on June 18, 2012 at 7:56pmIt’s going to be hard if not impossible to change the “socialist” attitude that is so pervasive in our country today. The entitlement structure is ingrained though out our society. Now that almost 50% of citizens can vote themselves more and more the country may have to go bankrupt in to bring about change.
Report Post »Wolfgang the Gray
Posted on June 18, 2012 at 8:14pmWe must be prepared to fight for our freedom, even if our children are too busy playing video games to pay attention.
“Those who have known freedom and then lost it have never known it again.” – Ronald Reagan
Report Post »C. Schwehr
Posted on June 18, 2012 at 10:33pmIt will be easy to eliminate the socialist element from our society. In the event that the government does collapse, these people who rely solely on the government for their livelyhood (welfare) will self-eliminate or adapt as an Ayn Rand convert.
Report Post »poorrichard09
Posted on June 18, 2012 at 7:53pmIt’s simple: DO NOT SPEND MORE THAN YOU EARN and you’ll be fine.
Report Post »Git-R-Done
Posted on June 18, 2012 at 7:58pmIt doesn’t take a rocket scientist to figure that out.
Report Post »progressiveslayer
Posted on June 18, 2012 at 7:50pm238 trillion in the hole and people actually think we’re getting out of this? Absurd doesn’t even come close to explaining how someone could think that.Barry says we’ll tax the rich to pay for all these unconstitutional programs and the shocking thing about that is people actually believe that BS,they’re simpletons,that’s the only explanation for that line of thinking.
Our debt is more dangerous to our republic than any terrorist and I‘m afraid we’ll see just how dangerous in the very near future.
Report Post »Dougral Supports Israel
Posted on June 18, 2012 at 8:04pmLike you, I don’t believe we will be able to solve this crisis without passing through some kind of collapse. Our whole system is based on debt and the required austerity will be too much for the dependent classes to accept without huge social unrest. The deficit cannot be solved via taxation and if we try it we will see spending rise even farther since taxes can’t be imposed without people feeling they are getting more in return.
The moment of opportunity to save America was probably 20-30 years ago, perhaps during the Reagan years. We didn’t take advantage of it and now we will pay the piper.
Report Post »progressiveslayer
Posted on June 18, 2012 at 8:18pmThis generation bares no semblance to the generation that endured the first depression and they will riot when the cash flow stops.I think you might agree that this generation feels entitled to taxpayer money,they’re somehow owed cash housing and health care simply because they exist.
Report Post »It’s going to be very bad when it hits so protect yourself and your family as best you can,good luck.
freeberty
Posted on June 18, 2012 at 8:20pmExactly right Progressiveslayer,
Since we have so many conservatives that post on this site, you could ask them if they’re willing to give up their military/government paycheck, social check, subsidy program. Maybe Beck could make that 1 of his foundations for restoring America. More likely your going to hear more excuses then a urbanite section eight recipient why they deserve their government welfare program, and they could give a fiq about committing filicide on their future generations.
Report Post »alinmatt
Posted on June 18, 2012 at 8:38pm@Progressiveslayer, well said. Unfortunately, Ron Paul, the one guy who would’ve actually tried to fix this mess was ignored and mocked by guys like Beck. The best foreign policy we‘ll have in the future is the one we’ll be able to afford, none.
Report Post »progressiveslayer
Posted on June 18, 2012 at 8:41pmI don’t equate a military retirement check with welfare,one is earned money the other is theft.SS medicare and medicaid and all forms of welfare,that includes corporate are unconstitutional and should have never come into existence.We have these unconstitutional programs because subsequent congresses that followed our founders have no idea the real role of government.
Report Post »Our founders were geniuses and they knew one day our republic would fail,that‘s why they put so many checks and balances in our government to possibly prevent it’s failure.But we strayed too far from our founding and we’ll all pay the price for that.
Classical Liberal
Posted on June 19, 2012 at 2:48amBecause mittens is just the guy to fix our debt problems, isn’t he?
Let’s face it, If our country can’t be serious enough at this time in our history to recognize the need for policies advocated by Ron Paul, than the the cultural failure that has occurred in this country will sink the ship.
That failure is the America whose citizens are not involved in government because they don’t care about politics because they believe government will take care of everything. That failure is the America that has no problem with that government they trust unquestionably amassing tremendous debt that later generations can worry about. That america is the America that has no problems starting wars with countries that have done us no harm and that are of no threat to us. An america That barely batts an eye when they are told the dead from those wars is up to a million including women an children.
That shameful America that decided to elect the “charming” Barack Obama or that nominated Willard ‘mittens’ Romney for god only knows the reason why (we all know why the establishment likes him).
America doesn’t need to like Ron Paul; America needs to fall in love with his message and the movement he represents. It’s about the idea, not the man. The problem of course, is that the America that desperately needs his message and the reforms he would bring, has become to culturally broken to realize that it’s broke.
And like beck said, you can‘t fix it if you don’t kno
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