There has been a large number of people, specifically Gen X and Gen Y people, saying that baby boomers are selfish and have eaten up all the resources for themselves.
The case has been that baby boomers took free education, then when they got jobs they cut taxes and charged their children for education, then they purchased multiple houses and charged their children rent. Sure, this is all probably true.
However, today GST has gone up and income tax has fallen. This implies that younger people, who generally borrow to build up human and physical capital, have experienced a lifetime tax cut. Meanwhile, older people who have assets and net savings have experienced an increase in their lifetime tax burden.
Yet have we heard any more rubbish about “intergenerational war” and transfers between generations in the lead up to this? Well no.
Ultimately, the idea of intergenerational transfers has been overplayed. New generations are benefiting from the established capital stock and technology – in fact if we care about each generation equally we would WANT to transfer resources backwards in time. I get the feeling that Gen X and Gen Y (my generation) are simply a little bit to argumentative, and would like to pretend that they are being horrendously wronged – this makes sense to me, as I happen to be very argumentative myself 😉
There is a good article on the issue here, by Nigel Pinkerton from Infometrics.
