When Sir Boyle Roche, an Irish politician in the 18th Century heard it posed in the Irish House of Commons that the government had no right to load posterity with a debt for what could in no degree operate to their advantage, he memorably responded “Why should we put ourselves out of our way to do anything for posterity, for what has posterity ever done for us?”
He could have been taking part in the current arguments over intergenerational fairness in the pensions field for his response sounds remarkably similar to the response of those who object to the removal or delay of benefits from the current generation of retirees. They seem to feel that there should be no problem loading burdens onto posterity for the benefits they feel they should enjoy in the near future.
Talk about intergenerational warfare is currently rife in the pensions field. Curiously, most people are addressing this as if it is a new issue, but pensions have always been based on the current payers supporting current payees; in effect pension schemes have always been glorified, regulated Ponzi schemes.
Therefore, the hope has always been that the next generation will create the wealth that can be used to provide for the current generation’s needs when they move into the retirement phase.
Unfortunately the declining ratio of workers to retirees blows a hole in this comfortable theory and the resulting talk of reduction of benefits for future retirees has inspired talk of inter-generational warfare and claims of unfairness. If no changes are made, then the next generation of workers will have to pay exorbitant amounts to maintain the current level of benefits to the retirees of the future.
This is not the way to look at the issue. Throughout mankind, older generations have worked to improve the lot of younger generations and progressively have given them a better standard of living than previous ones. This is one of the first times that an older generation of retirees are objecting to having their benefits cut so that the future generations are not over-burdened – that the focus has switched from unsought sacrifice to demands for repayment and support as a right.
Older generations must realise that the reducing workforce / retiree ratio cannot sustain the benefit levels that are currently available. Therefore, benefits must come down in real terms – either by direct reduction or by qualifying for them later. Posterity may have given younger generations better education, healthcare and opportunities but it can’t be seen to come with a price tag of impoverishment of future generations – not unless the older generations wish to be seen as the first ever group who were selfish enough to insist that their lifestyle be supported by making younger generations poorer than their forebears.
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