Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I agree that a large part of the problem is the misapplication of the idea that money is ONLY a thing. The paper money in your wallet is a thing and has current value. How that value varies over time is a function of government policies and the operation of the economy.

But money is also a relationship. This is especially true when there are significant time periods between the incurring of a debt and the payment of that debt. This is especially true, in the USA, for the "pay as you go" Social Security System. Opponents of that system convinced all to make the system more solvent, on a "money is a thing" basis, back in the late '70s early '80s, and so we did, by significantly increasing the withholding taxes for SS and Medicare.

But the "money is a relationship" aspects were flouted and the extra withholding was not used in ways that would help the society pay the debt when it came due. Instead it was used to paper over massive deficits that resulted from Reagan Administration tax cuts for the rich and increases in defense spending. Keynes had warned that there were problems involved in inter-generational wealth transfers and this sorry episode is example one, for the USA especially.

The idea that "We increased taxes to adequately fund retirements, but corrupt governments have squandered that money on tax breaks for their rich buddies and now want to blame the victims" argument should be very appealing to older demographics. The example should be a warning to younger demographics as well.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 21st, 2010 at 01:51:38 PM EST
[ Parent ]

Others have rated this comment as follows:


Occasional Series