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Injin

This Is The Age Of War Between The Generations

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http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article7142095.ece

it’s all those retiring baby-boomers who threaten us with national bankruptcy

Yesterday was my 58th birthday. If I were a Greek worker I could retire. Although pension payments in Greece normally start around 61, special provisions allow anyone to retire at 58 if they have been in employment for 35 years. That, as it happens, is how long I have been at work. My index-linked pensions from the Greek Government would be worth 75 to 90 per cent of the average salary in the country, guaranteed for the rest of my life by the State.

If you want to know why Greece is going bankrupt and why the euro seems to be on the verge of disintegration, look no farther. The best argument I have ever heard for a break-up of the euro was this observation in a German newspaper: “The Greeks go on to the streets to protest against an increase of the pension age from 61 to 63. Does this mean that Germans should extend the working age from 67 to 69, so Greeks can enjoy their retirement?”

This, however, is not another article about self-indulgent Greeks and self-righteous Germans. The battle over bailouts in Europe is only a sideshow compared with the great social conflict that lies ahead all over the world in the next 20 years. This will not be a struggle between nations or social classes, but between generations — and it is a conflict that, in Britain, begins in earnest this year. The end of the Second World War in May 1945 marked the start of the baby boom, which lasted until the mid-1960s. Now, 65 years later, the corresponding retirement revolution is about to shake up our society, economy and political institutions.

Mr Willetts shows how the overwhelming size of the baby boom generation, in comparison with the generations just before and after, allowed people born in the two decades after VE-Day not only to dominate culture, fashion and morality, but also to accumulate wealth, monopolise employment and housing and reduce social mobility for the next generation.

But strangely, however, nobody — least of all an active politician like Mr Willetts — seems to make the connection between long-term intergenerational tensions and the present controversies over public spending and taxes.

Why, for example, are governments everywhere running out of money, not just in Britain and Greece, but also in America, Germany, Japan and France? Why are taxes relentlessly rising in all advanced capitalist countries? And why is public spending being cut on schools, universities, science, defence, culture, environment and transport, while spending on health and pensions continues to rise?

The populist answer to these questions is that we are all about to pay for the greed of the bankers. But this is not true. According to IMF calculations, the credit crunch, bank bailouts and recession only account for 14 per cent of the expected increase in Britain’s public debt burden. The remaining 86 per cent of the long-term fiscal pressure is caused by the growth of public spending on health, pensions and long-term care. The credit crunch and recession did not create the present pressures on public borrowing and spending. They merely brought forward an age-related fiscal crisis that would have become inevitable, as by 2020 the majority of the baby-boomers will be retired.

The rational solution to this fiscal crisis would be for governments to reduce their spending on pensions, health and longterm care. Yet these are precisely the “entitlements” protected and ring-fenced by politicians, not just in Britain but also in America and many European countries, even as other government programmes are ruthlessly cut.

The politics of the next decade will be dominated by a battle over public spending and taxes between the generations. Young people will realise that different categories of public spending are in direct conflict — if they want more spending on schools, universities and environmental improvements they must vote for cuts in health and pensions.

More at the link...

An interesting take on the demographic issue and a very interesting assumption about what will remain "public sector."

Edited by Injin

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Guest absolutezero

it’s all those retiring baby-boomers who threaten us with national bankruptcy

An interesting take on the demographic issue and a very interesting assumption about what will remain "public sector."

Where did this come from Injin?

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Where did this come from Injin?

Kaletsky in the times, I have added the link in the OP, my apologies for the original ommission. :)

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the younger generations will be equally venal in response - they will vote to keep the boomers who didn't save for themselves, in decreptitude, with the bare-minimum of UN-recognised care, and the silly individuals (I hasten to add it is not the whole of that generation) will have a look of a baby that's just had its dummy stolen - which in fact may be the first time for them

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For once, Koletsky writes something decent. Thing is, this intergenerational war has been written about by columnists many times in the last 3 months. A bit late to the game methinks. Good article though.

I have an easier solution. When they hit 70, execute the baby boomers.

btw I think it frightening that all baby boomers will be collecting pensions by 2020. The pensions timebomb is coming quicker than I thought it would.

Edited by rolf

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Guest absolutezero

Kaletsky in the times, I have added the link in the OP, my apologies for the original ommission. :)

You don't need to apologise!

What do you make of the article?

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For once, Koletsky writes something decent. Thing is, this intergenerational war has been written about by columnists many times in the last 3 months. A bit late to the game methinks. Good article though.

I have an easier solution. When they hit 70, execute the baby boomers.

btw I think it frightening that all baby boomers will be collecting pensions by 2020. The pensions timebomb is coming quicker than I thought it would.

30 is good.

shag Jenny, carousel @ 30 for renewal.

perfik!

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You don't need to apologise!

What do you make of the article?

He's ignoring the obvious solutions

1) being inflating away the pensions

2) being state failure thriugh mass tax avoidance/non compliance/inability to pay.

My money is on 1) for the same reasons that the boomers have been promised a moon on a stick and a world to wave it at.

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it’s all those retiring baby-boomers who threaten us with national bankruptcy

An interesting take on the demographic issue and a very interesting assumption about what will remain "public sector."

It's obvious. People will have to work until their late sixties because there is nomoney to pay their pensions earlier and CRUCIALLY, they live much longer requiring much more health care. I am planning to work to 70 anyway. Wheni get to 60+ I expect to have perhaps 6-7 weeks holiday and might knock off at 5 instead of 6pm.

What's so wrong with that? If there are less younguns coming along in due course then the pressure on jobs will reduce for everyone as time goes by. The world might need over sixties to keep things going!

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Guest absolutezero

You don't need to apologise!

What do you make of the article?

The comments are "interesting", shall we say?

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Maybe the state could spend less time hammering smokers and drinkers who are busily taking a decade or two pff their lifespan.

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Guest absolutezero

It's obvious. People will have to work until their late sixties because there is nomoney to pay their pensions earlier and CRUCIALLY, they live much longer requiring much more health care. I am planning to work to 70 anyway. Wheni get to 60+ I expect to have perhaps 6-7 weeks holiday and might knock off at 5 instead of 6pm.

What's so wrong with that? If there are less younguns coming along in due course then the pressure on jobs will reduce for everyone as time goes by. The world might need over sixties to keep things going!

Are people living longer or is that a myth backed up by falsified figures?

Edited by absolutezero

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I think the below seems to sum it up for my friends and relations....

Grandparents generation (now in late 80's)- one full time working man's salary, one part time salary from wife, retired on state pensions, started in council house, managed to buy 3 bedroom semi with big garden when in their 40's, now worth £150k-£350k depending on area.

Parents generation (now late 50's - mid 60's) - two full time middle management/professional salaries (with 5-10 year gap for women for children), one index linked public sector final salary pension, one company scheme paying 2/3rds of final salary, bought family house in early 30's with young children now worth £400k-£700k depending on area. No intention of moving or downsizing.

Our generation (early 30's) - two full time salaries higher than my parents earnt, no pension for me, public sector pension for wife. Either renting or in small homes with large mortgages.

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it’s all those retiring baby-boomers who threaten us with national bankruptcy

An interesting take on the demographic issue and a very interesting assumption about what will remain "public sector."

It's obvious. People will have to work until their late sixties because there is nomoney to pay their pensions earlier and CRUCIALLY, they live much longer requiring much more health care. I am planning to work to 70 anyway. Wheni get to 60+ I expect to have perhaps 6-7 weeks holiday and might knock off at 5 instead of 6pm. What's so wrong with that? If there are less younguns coming along in due course then the pressure on jobs will reduce for everyone as time goes by. The world might need over sixties to keep things going!

If you actively enjoy your job then fair enough.

For most people that sounds like a terribly depressing prospect.

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Guest DissipatedYouthIsValuable

I think the below seems to sum it up for my friends and relations....

Grandparents generation (now in late 80's)- one full time working man's salary, one part time salary from wife, retired on state pensions, started in council house, managed to buy 3 bedroom semi with big garden when in their 40's, now worth £150k-£350k depending on area.

Parents generation (now late 50's - mid 60's) - two full time middle management/professional salaries (with 5-10 year gap for women for children), one index linked public sector final salary pension, one company scheme paying 2/3rds of final salary, bought family house in early 30's with young children now worth £400k-£700k depending on area. No intention of moving or downsizing.

Our generation (early 30's) - two full time salaries higher than my parents earnt, no pension for me, public sector pension for wife. Either renting or in small homes with large mortgages.

There are other countries, you know.

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For once, Koletsky writes something decent. Thing is, this intergenerational war has been written about by columnists many times in the last 3 months. A bit late to the game methinks. Good article though.

I have an easier solution. When they hit 70, execute the baby boomers.

btw I think it frightening that all baby boomers will be collecting pensions by 2020. The pensions timebomb is coming quicker than I thought it would.

old people should be shot at birth

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Guest Steve Cook

Are people living longer or is that a myth backed up by falsified figures?

Some people are only living a little while longer than they did say 20 years ago. Perhaps half a decade to a decade. If you actually look at the histogram, it is a skewed distribution where only a few live a significant amount longer, thus dragging the headline average up, whilst the majority haven't seen anywhere as near as much increase.

An additional problem is that what extra that has been gained in lifespan for people tends to to be an extension of decrepitude rather than vigour and so tends to correlate to an increase in expenses related to medical and social care. But, then, this increased public-purse expense is largely down to the nature of our demography now as the needs of a modern industrial state and extended family structures do not sit well together.

Edited by Steve Cook

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it's all those retiring baby-boomers who threaten us with national bankruptcy

An interesting take on the demographic issue and a very interesting assumption about what will remain "public sector."

It's obvious. People will have to work until their late sixties because there is nomoney to pay their pensions earlier and CRUCIALLY, they live much longer requiring much more health care. I am planning to work to 70 anyway. Wheni get to 60+ I expect to have perhaps 6-7 weeks holiday and might knock off at 5 instead of 6pm.

What's so wrong with that? If there are less younguns coming along in due course then the pressure on jobs will reduce for everyone as time goes by. The world might need over sixties to keep things going!

yep - not as many of the boomers have as reliable retirement income as you might expect

the complaint about medical care is that it costs so much - it costs so much because it CAN.

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as the needs of a modern industrial state and extended family structures do not sit well together.

if the oldies weren't spoilt by the state and the belief that theirs is a golden right to live in a home future generations can't afford, this wouldn't be the case. they'd move in with their kids and help with the grand-chuildren.

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The rich elites are certainly getting a meme going that it's not their theft that's the problem, it's the mass of relatively poor elderly who deserve to be disenfranchised, have health care withdrawn etc etc.

They're encouraging the healthy young to carry out this looming act of 'patricide' on their behalf. I note it didn't take long for someone to suggest they are all murdered.

Kaletsky is just Murdoch's mouthpiece after all.

So, continue allowing the rich to steal whilst murdering our dementia ridden elderly.

Nice.

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what screwed the west over was the parasitical organisations willing to outsource labour to 3rd world countries and reap ever higher profit margins along with reckless govt spending , the poor decisions were made decades ago it is too late now to avoid serious pain

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It's obvious. People will have to work until their late sixties because there is nomoney to pay their pensions earlier and CRUCIALLY, they live much longer requiring much more health care. I am planning to work to 70 anyway. Wheni get to 60+ I expect to have perhaps 6-7 weeks holiday and might knock off at 5 instead of 6pm. What's so wrong with that? If there are less younguns coming along in due course then the pressure on jobs will reduce for everyone as time goes by. The world might need over sixties to keep things going!

One thing Kaletsky missed, was the effect of global wage arbitrage. Chinese and Indian people, will work for far less than a European. So work will move to those countries until once again, there is equity between us and them with respect to wage rates. The social and economic situation of the developing countries, and the world, have changed. Work can now be moved, and before it couldnt. Private sector wages in real terms, have fallen all over the Western World, particularly over the last five years.

The state hasnt realised this either. They have noticed a collapse in tax revenues though. This collapse in tax revenues has happened all over the western world, with national and local government deficits out of control almost everywhere. There is a grumbling that public sector wages are too high, but except in a couple of cases, little has been done about it. Protection of state salaries is so entrenched, any attempt to cut them will prove fraught to say the least.

We had a new 'cost cutting' government introduced but a few weeks ago here in the UK. They dont seem to have any idea about the ideas in Kaletsky's article, nor any inkling of the consequences of global wage arbitrage. Instead of cutting pensions, they locked in a formula, that will see pensions consume an ever greater percentage of UK GDP. Boneheaded was the word that sprang to mind when I saw that decision.

Countries in the west have got to get back to basics. You have to look at your private taxpayer base, work out how much tax you can raise from that without being 'abusive' (35-40% of GDP appears to be the max you should take, but 30% ought to be a better target if you ask me), and then spend accordingly. Too bad if that means something you 'need' cant be afforded, you cant have it.

Indeed, we neednt see any cuts to our real government supplied services and benefits, if we just did sensible things like reduce pensions and benefits and public sector pay in line with the collapsing private sector pay. We would all suffer together, but we would get by, finding that real output was unaffected by everyone moving in step.

Instead what we have done, is make up the difference between what can be taxed from our shrinking private sector 'taxable base', and what the government have deigned to spend, by borrowing. £170 billion deficit per year. And those in charge appear to be labouring under the misunderstanding that this deficit is partly due to the business cycle, and only partly structural. Thats wrong, that taxbase isnt coming back.

So, what is going to happen? Well we are going to monetise the debt at some point, but that will lead to the collapse of the currency. GDP will collapse, and out of the ashes, we will get a system that only spends what can be taxed from productive workers.

At that point, many pensioners will be wishing that they had accepted a cut to their pension in 2010 when the enlightened Lib-Dems had come to power. Its not going to work out very nice for them. It wont be nice for anyone.

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The rich elites are certainly getting a meme going that it's not their theft that's the problem, it's the mass of relatively poor elderly who deserve to be disenfranchised, have health care withdrawn etc etc.

They're encouraging the healthy young to carry out this looming act of 'patricide' on their behalf. I note it didn't take long for someone to suggest they are all murdered.

Kaletsky is just Murdoch's mouthpiece after all.

So, continue allowing the rich to steal whilst murdering our dementia ridden elderly.

Nice.

That's what happens when you ask the man to sort out your retirement.

That's what happens when you ask the man to protect your bank and your savings.

That's what you get for not asking full pay for todays work but let the pay be paid "tomorrow" in some way.

Very sticky fingers the elite have.

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Are people living longer or is that a myth backed up by falsified figures?

Life expectancy is currently increasing at about 3 months per year. In other words an average someone born in 1954 will live a year longer than an average someone born in 1950 etc. This rate has increased and was not predicted by actuaries which is why the pension system is so screwed.

there's more here:

http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=15098

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  • 140 Brexit, House prices and Summer 2020

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      • down 5% +
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