Boomers Pension Gravy Train Finally To Be Derailed

steampowered

A lot of people on here are assuming that "right wing" views are pro-boomer, and "left wing" views are anti-boomer.

I honestly do not think that is correct. Much of this debate was actually kicked off by a senior minister in the Conservative party with his book a few years ago, provocatively titled "The Pinch: How the Baby Boomers Took Their Children's Future - And Why They Should Give it Back". The premise of the book is essentially that boomers receive about a third more from the state than they contributed, and that should be given back.

Traditional right wing views typically advocate limited state spending, and only spending what you can afford. This seems very contrary to the position where pensioners are receiving ever greater retirement benefits, in a time of great national debt, far in excess of the amounts they paid towards their elder generation.

I'd think traditional left wingers should be far more likely to advocate decent retirement benefits despite the cost and despite the increase in how long people are living (which is what has led to the cost difference).

Cornucopia

Thanks for that. I suspected left-wing meddling, but it turned out to be right-wing. Political meddling nevertheless.

I asked many pages ago about this alleged overpayment of State funds to "Boomers", and no detail was forthcoming. As such, my objections to it remain as before. In short, Boomers who have mostly worked during their working lives will be net contributors (because we didn't have in-work benefits to anything like the extent we do now, and Income Tax was generally higher).

If the prevailing employment situation was such that some Boomers spent years on benefits, then that's hardly their fault or the fault of rest of their generation.

Excluding those two groups leaves what, exactly? A few stay-at-home Mums who were not entitled to anything more than Child Benefit?

Also I note again that the green-eyed Millennials are more likely to be talking about private sector issues like HPI and pensions than State funding and benefits.

steampowered wrote: »

A lot of people on here are assuming that "right wing" views are pro-boomer, and "left wing" views are anti-boomer.

I don't think that's exactly it. The presumption by some people (myself included) is that Boomer-bashing is a proxy for the more traditional class-war politics of the far Left. You can see it in some of the language and presumptions: it's clear that the protagonists often have cosy Middle-class pensioners in mind, rather than those struggling in hard-to-heat social housing.

So, to that extent the Boomer-bashing proposition is presented here in a left-wing context (inherently, since it is about redistribution of wealth). The centre and right-wing view will typically be that it is nonsense. That's not "pro-Boomer", as such, just a question of railing against divisive and disruptive nonsense that is not supported by facts or cogent arguments.

ukcarper

Cornucopia wrote: »

Thanks for that. I suspected left-wing meddling, but it turned out to be right-wing. Political meddling nevertheless.

I asked many pages ago about this alleged overpayment of State funds to "Boomers", and no detail was forthcoming. As such, my objections to it remain as before. In short, Boomers who have mostly worked during their working lives will be net contributors (because we didn't have in-work benefits to anything like the extent we do now, and Income Tax was generally higher).

If the prevailing employment situation was such that some Boomers spent years on benefits, then that's hardly their fault or the fault of rest of their generation.

Excluding those two groups leaves what, exactly? A few stay-at-home Mums who were not entitled to anything more than Child Benefit?

Also I note again that the green-eyed Millennials are more likely to be talking about private sector issues like HPI and pensions than State funding and benefits.


I don't think that's exactly it. The presumption by some people (myself included) is that Boomer-bashing is a proxy for the more traditional class-war politics of the far Left. You can see it in some of the language and presumptions: it's clear that the protagonists often have cosy Middle-class pensioners in mind, rather than those struggling in hard-to-heat social housing.

So, to that extent the Boomer-bashing proposition is presented here in a left-wing context (inherently, since it is about redistribution of wealth). The centre and right-wing view will typically be that it is nonsense. That's not "pro-Boomer", as such, just a question of railing against divisive and disruptive nonsense that is not supported by facts or cogent arguments.

Why is it that so many poster here try to blame everything on the left wing. As has been pointed out one of the main instigators of boomer bashing is a former Tory politician.

Thrugelmir

ukcarper wrote: »

Why is it that so many poster here try to blame everything on the left wing. As has been pointed out one of the main instigators of boomer bashing is a former Tory politician.

There is no hard and fast data to back up Willetts claims though. As an observation one has to say that the post war generation worked far harder than we do today and were far more frugal. Nor did they spend today and pay tomorrow.

Cornucopia

ukcarper wrote: »

Why is it that so many poster here try to blame everything on the left wing. As has been pointed out one of the main instigators of boomer bashing is a former Tory politician.

Since those people here who are pushing the Boomer-bashing agenda (and pushing it hard) clearly have left-wing credentials, I doubt that they have been inspired by a Tory politician.

Even if they have, there is way more momentum behind this than Willetts could ever muster. It can only be a thing of the Left. Ultimately taken from the Right, maybe. I guess that shows how messed-up it is.

Linton

Inciting hatred of a minority section of society and blaming them for one's woes is not normally the left-wing tactic but rather one used by the right over many years and across the world - look at Trump for a very recent examples. The left prefers to blame and wish to change "the system".

Why the focus on Stae Pension benefits for boomers? The majority of boomers are too young to be receiving State Pension.

steampowered

Cornucopia wrote: »

I asked many pages ago about this alleged overpayment of State funds to "Boomers", and no detail was forthcoming. As such, my objections to it remain as before. In short, Boomers who have mostly worked during their working lives will be net contributors (because we didn't have in-work benefits to anything like the extent we do now, and Income Tax was generally higher).

There are literally hundreds of sources I could link you to. A simple search on google for something like "boomer benefits vs taxes" would give you all you need.

I personally like this one, as it is a politically neutral economic analysis: http://www.niesr.ac.uk/sites/default/files/publications/dp377.pdf.

This is a detailed, neutral study by the National Institute of Economic and Social Research which analysed at intergenerational accounts in the United Kingdom. It is well worth a read for people on both sides of the debate.

A few choice extracts below:

Generational accounts show the net discounted life-time contribution, positive or negative, that people, as a function of their age, are expected to make to the Exchequer. Receipts include both welfare benefits and public consumption (allocated by age as far as possible) while payments are largely comprised of taxes.

The framework of generational accounts makes it possible to estimate not only the generational imbalances described above, but also the tax changes needed. We distinguish the intergenerational balance gap from the intertemporal budget gap. The former assumes that current and future new-borns are all treated in the same way and calculates the tax change needed for this. The latter is the tax change needed for solvency without any requirement that all future generations should be treated in the same way.

Table 2 shows the generational accounts of the current population as a function of age, and also the present value of the net contribution that each future new-born will have to make in order to make the government solvent. The table indicates that a current new-born baby will make an average net discounted contribution to the exchequer of £68,375 over its life-time. The table provides details both of what taxes will be paid and what benefits will be received. One might think that, in a steady state, the net contribution would be zero.

However, there is a past history of pay-as you-go benefits which has allowed earlier generations to receive more from the state than they have contributed over their life-times and it is inevitable that there is now a net contribution which has to be paid. The table also shows, however, that this contribution is not adequate to balance the budget. If the
government is to meet its budget constraint, then future generations have to contribute £159,668 discounted back to 2008, but growing at 2% a year reflecting the assumed growth rate of the economy.

This can also be seen in aggregate terms. The present value of net transfers to be paid by the government is £6811.9bn. Adding this to net government debt of £800.1bn gives the total intergenerational budget imbalance, £7612bn or the total value of required future contributions to the exchequer over and above what those currently alive and future generations are to receive from the public purse. Seen in these terms the total burden is just over five times GDP.

Our base simulation, with a real interest rate of 3% p.a. suggests that taxes need to rise by 15.4% to deliver intergenerational budget balance and by 17.1% to deliver intertemporal budget balance.

This all means:
- Boomers will receive from the state £6.81 trillion more than they paid in taxes.
- Taxes would need to raise by 15.4% to state spending on boomers without having a net impact on the national debt.
- Taxes would need to raise by 17.1% to enable future generations to receive the same level of state support/pension/healthcare etc. given to boomers.

I know you didn't like this sort of thing earlier in the thread because there are estimates involved. But I would encourage you to have a skim of the paper. Obviously there are some estimates involved, but it is based on pretty solid data.

steampowered

Cornucopia wrote: »

Since those people here who are pushing the Boomer-bashing agenda (and pushing it hard) clearly have left-wing credentials, I doubt that they have been inspired by a Tory politician.

Even if they have, there is way more momentum behind this than Willetts could ever muster. It can only be a thing of the Left. Ultimately taken from the Right, maybe. I guess that shows how messed-up it is.

I am inclined to agree with you. I think this is a real shame and reflects very badly on the state of British politics.

This shouldn't be framed as boomers vs. millenials. At the end of the day, life expectancies have increased dramatically without a corresponding increase in the retirement age. As a result there are a lot more retired people around than there used to be and they all need pensions, healthcare and so on.

It should be possible for people to have an honest discussion about how that gets funded without it being turned into a left wing vs. right wing issue.

On the other hand, I don't think we can ignore it and simply pretend that we can carry on as we did before. At the end of the day the demographics and age profile of this country have changed and are continuing to change. That can't be ignored - if it is ignored, you very quickly end up with an insolvent country and national debt going through the roof (I guess this process has already started).

Cornucopia

steampowered wrote: »

This shouldn't be framed as boomers vs. millenials.

Indeed. And yet....

It should be possible for people to have an honest discussion about how that gets funded without it being turned into a left wing vs. right wing issue.

Realistically, I think we will always have a political divide. Typically the Right will resolve such an issue by making people support themselves, and the Left will increase taxes so that the State can support them.

On the other hand, I don't think we can ignore it and simply pretend that we can carry on as we did before. At the end of the day the demographics and age profile of this country have changed and are continuing to change. That can't be ignored - if it is ignored, you very quickly end up with an insolvent country and national debt going through the roof (I guess this process has already started).

I don't see anyone denying the problem, or saying that we shouldn't address it. We haven't even got that far...

Cornucopia

steampowered wrote: »

There are literally hundreds of sources I could link you to. A simple search on google for something like "boomer benefits vs taxes" would give you all you need.

I personally like this one, as it is a politically neutral economic analysis: http://www.niesr.ac.uk/sites/default/files/publications/dp377.pdf.

This is a detailed, neutral study by the National Institute of Economic and Social Research which analysed at intergenerational accounts in the United Kingdom. It is well worth a read for people on both sides of the debate.

A few choice extracts below:


This all means:
- Boomers will receive from the state £6.81 trillion more than they paid in taxes.
- Taxes would need to raise by 15.4% to state spending on boomers without having a net impact on the national debt.
- Taxes would need to raise by 17.1% to enable future generations to receive the same level of state support/pension/healthcare etc. given to boomers.

I know you didn't like this sort of thing earlier in the thread because there are estimates involved. But I would encourage you to have a skim of the paper. Obviously there are some estimates involved, but it is based on pretty solid data.

I did have a look before, and unfortunately found it completely incomprehensible - I am not an economist.

When it was posted before, there was a headline claim lifted from it that an individual Boomer, on average, was £450k (IIRC) up compared to the estimated life-end position of someone newly-born today.

As you say, there are some huge assumptions there, and I can see no way in which such assumptions can be made neutrally or fairly. Who can tell how our society will look in 50 or 100 years time - the idea is simply ridiculous.

I have other questions, not least about the £450k difference - how does it arise, what are its components? For me personally (Gen X), I fully expect to be a net contributor over my lifetime, and am well on-target to be so.

I can see that someone on lifetime benefits might get to that kind of figure, but they are in the minority, and it's hardly my fault (if I were a Boomer) that they were denied employment for an extended period.

In short, the macro-economic details around this are so wildly varying, it makes any reduction down to simplistic inter-generational conclusions somewhat dishonest.