First, I have a confession to make. I’m part of the problem. I am a boomer though I fall into the category called the SOL (shit-out-of-luck) boomers, those who are in the second wave that graduated from university after 1981.
On average, if you graduated during the recession of 1981-1982, upon graduation, you stood to earn $25,000 less than the maudits boomers who graduated before, and twenty years later, you probably had earned at least $200,000 less over the same time frame.
As a result, although I benefited from the social investments that made going to university ridiculously cheap and a growing population that turned residential homes into cash cows, I was never in the game of conspicuous consumption because I never had the income that would allow me to even enter into the game.
Nevertheless, I am extremely grateful for the social fabric that was provided for me that allowed me as a working- class kid to get a quality university education, which enabled me to attain an enviable quality of life on the cheap.
So, what’s my beef?
Well, I have a bone to pick with the maudits boomers, the most spoiled generation that ever graced the planet, who are so immersed in their own narcissistic self image that they have no idea what a pathetic legacy they are leaving for future generations.
From a financial perspective, they are ringing up a huge tab and are intending to stick future generations with an unmanageable debt load, and from an environmental perspective, they are pursuing a scorched-earth policy, hell bent on extracting as much fossil fuels from the earth as they can in order to maintain their unsustainable lifestyle as long as they can.
Now, that the chickens of the financial-speculation led, global recession have come home to roost, we are witnessing an inter-generational class war when it comes to the struggle to balance the books and to decide how to distribute the collective wealth.
This is where the economy becomes extremely political and we must be sensitive to the questions of social justice, in particular the question on inter-generational social justice, that underlie the debate over the numbers.
At the heart of the no-tax-increase position of economic and fiscal policy is the fact that the refusal to increase taxes coupled with a reduction of social program expenditures other than healthcare outlays benefits the maudits boomers and the silent generation at the expense of everyone that follows.
Here, the positioning to be prudent managers of the economy – remember the cant before the onset of the latest recession that the fundamentals of the economy were sound and that we would have no deficit – is a ruse to cover the collective greed of a large segment of the population and its intent to screw the rest.
Let’s face up to the facts. The huge increase in the quality of material life for post-war North Americans was due to a unique configuration of variables that will never be repeated: oil was cheap and abundant and the rest of the world lay in ruins while we switched our economic focus from the production of armaments to the production of consumer goods.
The maudits boomers had the extreme good fortune of being born into a generation that, through no effort of their own, afforded them the scale of economic opportunities that no subsequent generation will ever see.
The second fact to keep in mind is that there is no empirical evidence to support the claim that increases to the marginal tax rate will impact negatively on economic growth and, as a result, on government revenues.
The reality is that there is no correlation between tax rates and economic growth among OECD countries. Robust economic growth is possible in high tax rate countries like Sweden and Finland and in low tax rate countries like the US and Japan. In short, tax rates are conditioning not determining factors for economic growth.
So, the refusal to raise taxes and the intent to slash expenditures offset by increases in user fees is tantamount to setting up a social system built by and for the maudits boomers and then slamming the door behind them as they head off into retirement, which for many will be longer than the years they participated in the work force.
What kind of legacy is that?
It seems to me that at the very least boomers should leave behind a state of affairs that is at least as healthy as those that greeted them when they were born and that they enjoyed over the course of their lives.
Measures must be taken, other than offloading our collective problems to future generations, to ensure that we leave our children and our grandchildren a world in which we would want to live in.
Importantly, boomers have the democratic weight at the polls to translate our collective desires into the policy options of our choosing.
Since we are just days away from the tabling of the first post-recession beget, I will put questions concerning environmental stewardship aside and return to them in a later post.
To reduce deficits provincially and federally revenues must increase and expenditures must be controlled in a manner that adheres to the principle of inter-generational social justice.
Looking at the revenue side, the imposition of a financial transaction tax as a means to address structural deficits and accumulated debt holds great promise. Potential revenues are huge and the tax is progressive in nature since those who make the most transactions will pay the most taxes.
Moreover, since it has become readily apparent that risk management towards the economy is more important that fiscal policy focused on growth, the imposition of such a tax benefits everyone because increased economic stability reduces systemic risk.
In absolute terms, the benefits accrue on a progressive gradient: jobs for the working and middle class garner more protection and the rentier class is less apt to experience catastrophic losses when financial markets drop significantly, which now includes those who benefit from pension funds.
Second, relatively painless for those who were fortunate to experience economic conditions that led to unprecedented increases in material wealth, estate taxes should be raised significantly.
Collectively, since it is our generation that has benefited the most from the creation of our generous social programs, we should on our exit pay our fair share to ensure that we do not imperil the capacity of future generations to address their collective challenges.
Think of it as a boomer exit tax. It’s progressive by nature and it can be designed so that it balances our desires to leave a heritage to our individual families with the necessity to protect the common good.
On the expenditure side, let’s not get into the zero-sum game of healthcare versus education. Personally, I find it morally repugnant that we allow healthcare expenditures to take up approximately 50% of provincial budgets (supported by federal transfers), do nothing to bring them under control other than making a lame reference to further privatization, and then demand the younger generation to pay more for their post-secondary education, thereby forcing many of them into becoming wage slaves so they can pay down their individual debt while supporting our generous pensions and healthcare system.
If raising estate taxes is the first sacred cow that needs to be sacrifices, the second is the payment-by-medical act-performed healthcare system.
This system is no longer sustainable and it should be modified so that physicians are salaried employees as they are at the Mayo Clinic and the Cleveland Health Center, two of the leading healthcare institutions in North America.
From a deontological perspective, given the well-documented negative effects of income disparity on public health and the revenues physicians presently enjoy, they would be hard pressed to justify why we should continue to maintain their present levels of remuneration relative to the population at large.
If ever there was a time to think creatively about how we are to deal with our collective challenges, the time is now, especially since we are at the beginning of a demographic transition of which we have no idea of our public institutions capacity to adapt.
What is desperately needed is some exemplary leadership from boomers, so that we can properly assume our roles of stewards for future generations.