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What exactly DO we want to leave to our children?

May 22, 2011

Over the last few months several arguments have been put forward in support of tackling the national debt urgently. One of the most compelling is that it is irresponsible to saddle our children and theirs with crippling debt, so that we can ‘live it up’. It is an argument which resonates powerfully. After all, most of us have people that we love, who know not what a cassette tape is and to whom the name “Alexis Carrington” or the catchphrase “loads’a’money” mean nothing.

This argument appeals to the very best facet of human nature – the instinct to nurture; the aspiration to leave things better for the next generation – and is therefore almost irresistible.

Almost. But there is a little thread hanging from one corner. I have the urge to tug at it.

Let us suppose that I knew tomorrow I would be no more. The plane tickets to Geneva have been booked. The appointment at the Dignitas Clinic has been made. If I chose to leave my flat to my beloved nieces and nephew, encumbered as it is with a mortgage, would I worry? I would not. The repayments are manageable and the flat is worth more than its mortgage. Especially considering the invaluable security of having a roof over one’s head. To put it in terms even those concerned only with money will understand, I would have left them with positive equity.

This was precisely what our parents’ generation decided to do. And their parents’ before them. National debt, as a percentage of GDP, was much higher from the 20s to the 70s than it is now. But they made the positive choice of bequeathing it to us, as well as a world-class National Health Service, free Higher Education and a Welfare system which provided a safety net for the less fortunate. Had they looked at debt in isolation, they would never have achieved any of these things. Luckily, they did not. They left us with positive equity.

The proposition put forward by the Coalition government in support of their savage cuts, is the bequest of a clean slate. In the current economic climate, however, a clean slate means clean of assets and not so clear of debt.

On the one hand we have the self-interested privatisation of the NHS, the sale of local council assets, the dismantling of the welfare state. On the other hand is the transformation of public debt into private debt, by squeezing our living standards and the earlier enslavement of the next generation to the banks because of ludicrous tuition fees.

And the tragic irony is that, with inflation climbing and the economy stagnant, this government is due to miss its target in terms of making a dent in the national debt, anyway.

So, what is actually being proposed, is leaving our children with negative equity. The debt will still be there, but the assets will be gone. Important assets at that, the absence of which will translate into higher living costs – privately funded health, education and pension models.

Maybe this is genuinely what people want, having taken all the arguments into consideration – but let’s consider all the arguments.

Let us not be caught up in Cameron, Osborne and Clegg’s emotive language of “saddling future generations with debt”, without considering the assets and values that would also form part of that inheritance. And most importantly, whether it is worth it.

8 Comments leave one →
  1. Lisa Ansell permalink
    May 22, 2011 7:34 pm

    I have handed my daughter a world where she will have to spend more on her tuition for uni, than I borrowed for my first house. She will need to borrow money to get through uni as well- and in order for her to buy her first house, am not sure what has to happen.

    We don’t want to pass debt on to our kids. Pah.

  2. May 22, 2011 7:51 pm

    Another great post. Even through lens of this invented economic madness, the govt’s ‘plan’ is a mess of subterfuge and dogma.

  3. May 22, 2011 8:48 pm

    I’m afraid I have gone over to the full conclusion that we are being run by a corporate cleptocracy and any solution has to start with a return to Honest Money and a true Government owned central bank. This it would seem is highly unlikely as the banks have been aiming at this final blow to our liberties since the late 1700’s.

    On your “to whom do we owe this money exactly blog” there is a lot of very good comment all level headed and all pointing to main stream organisations all of which identify a real equality and fairness problem with the current system. Here is a link to a more radical site one that I think can safely be called a conspiracy site. I am no conspiracy theorist although I have to say a lot of the information on this obvious conspiracy site is actually information I do consider to be consistent with the evidence as I see it of a government consistently acting against the electorates interests.

    I have spent the afternoon researching alternative energy for our new Family small holding in Sweden Which my Partner and her family are buying I was amazed to immediately run into all sorts of accusations of foul play and underhand doings against projects that would be great for the electorate but bad for Tax revenues and profits of large corporations.
    Yep I’m sold the lunatics are running the asylum and robbing us all blind.

    I want my children to be bequeathed freedom and democracy nit debt slavery and absolutely no opportunity. I moved to Sweden as I felt there was a better chance of that for them over here The UK is in a very dangerous place it looks more and more like a Banana republic with each passing week.

  4. cynicalHighlander permalink
    May 22, 2011 9:57 pm

    THE HISTORY OF MONEY PART 1 in 3 parts.

    If anyone has thoughts outside the mainstream propaganda machine then one is labelled under many different names as it is the rulers only defense of their agenda.

    Who benefits from wars? The bankers as they can lend governments money to fund them at will knowing that the taxpayer will stump up many times over with no risk. When wars are not lucrative enough then encouraging debt is/was a more peaceful way of accruing wealth with complicit governments.

    Defaulting on those debts, which can be done by any sovereign nation is the only way we can stop mortgaging future generations for our spending spree.

    A People’s Debt Jubilee

  5. May 23, 2011 11:29 am

    Government debt is nothing compared to personal borrowing and the tricks used to sustain this. High Cost Credit is more prevalent now than ever before and every trick in the book is used to promote it:

  6. May 23, 2011 11:38 am

    From a commwenter above; “This it would seem is highly unlikely as the banks have been aiming at this final blow to our liberties since the late 1700′s.”

    Pah! I disagree. When George Downing came back from the Hague he was no longer our man over there, he’d gone native and was instead the bank’s man over here. Study his behaviour in thelight of this suggestion; makes sense, no? Who was it came up with the idea for the National Debt (and not simply becdause he was a teller at the Exchequer)? George Downing, debt on such a scale was a new idea in this country till he talked King Charles 2nd into it. And that was in the late 1600s! Hah!

    BB 🙂

  7. Dan permalink
    May 23, 2011 3:15 pm

    Capital Vs Labour, as true today as it’s always been!

  8. DumpCameron permalink
    May 24, 2011 1:09 am

    Once again, this blog hits the nastiest, most painful nails square on the head. A previous blog from Sturdyfellow pointed out that the debt is actively, technically being converted into personal, household debt… There are few things more annoying and infuriating about this corrupt government than its total disingenuousness. As ever before, the Tories are a totally valid, principled pressure group. They work towards a clear, specific end – the promotion of capital, the protection of private capital in the hands of “those who know best what to do with it”. Vested interests, of the few. But I am sick to death of their contuining pretence that they have any interest in alleviating poverty, promoting opportunity, seeking justice etc etc. THEY ARE SIMPLY A NARROWLY-FOCUSSED PARTY OF VESTED INTERESTS. And liars to boot. Shameful.

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