| | Keep your eye on the value, not the value-proxies.
1] Someone earns more than they currently spend: they accumulate excess value-proxies. But the value they exchanged for those value-proxies is loose in the economies.
2] They either save or invest those 'excess' value-proxies. When they 'sit on dollars' in a bank, the bank conservatively(when not monkeyed with by by government social experiments run amok) lends on their behalf, and they hold an accounting entry only-- a value-proxy. When they directly invest, they hold a slightly different value-proxy, one at risk of losing exchange value in the future, but also, chance of gaining and producing dividends in the future.
By doing so, they effectively hand over title to consume/use their excess value in the current economies to others, and tell them "go use my excess current value to create new future value." Either relatively risk free (as savings in the bank) or with ROI at risk (equities, investments.)
Either, directly, or indirectly. For example, when a bank lends to another in exchange for debt, that other has incentive to go out and create/work to create fresh, new value in the economies over time -- into the future. That is an indirect short term investment in the future economies. And when they instead invest in equities, that is a direct and long term investment in the future economies -- "use these titles (IOUs) to current value(at risk)to create new value in the future economies.
By targeting the 'dead equity' of the rich to pay for our current generational spending wishes, what we are effectively doing is saying "Screw the future, we want to consume all present value in the economies in such a way that it creates absolutely no future value in future economies."
And when we also fund much of our current spending instead by borrowing from the future via public credit, secured only by the ability to levy additional tax on future economies, we are not only not investing in those future economies, we are de-investing in them, effectively by consuming their future credit today.
Not satisfied with a present generation balance between savings/investment and present credit, we steal the credit of future generations-- our children, and try to consume it today. And remember, the way that governments spend in modern times, there is no means for government to 'save' and so, the sum of private and public credit must be balanced by the sum of private savings/investment. (This is with minor exceptions, such as school district capital accounts; government at all levels spends all of its tax revenue.) That requirement (of economies that do not want endemic corruption of value-proxies) should give us all pause.
That is why, when our great grandparents generation did not face the tidal wave of old age with a little plastic white card called Medicare, they lived to 60-70, while our generation is broadly living an extra ten years via paid for by others end of life heroics. But increasingly, that little white card is not funded from current generation transfers, or correctly accounted for savings/deferred generational pension spending, but by borrowing from the future -- our children, who will in no way be able to afford to support the kind of broad 'compassionate' old age tidal wave spending that Medicare is attempting for the entire nation. We are in effect taking those extra ten (largely miserable) years of our lives from our children, who will be in no fiscal condition to take care of their own generational support ratio while still also paying off ours as well.
When seen in its proper light, no generation would ever knowingly or willingly do that to their children. That is not 'compassion', that is the opposite of compassion.
That battle is currently being fought over Mediscare. The piper is going to be paid. The borrowing from the future party has come to its inevitable end.
What is it, exactly, that makes us think as a generation that we deserve to face that inevitable tidal wave with any more subsidy(by way of consumed national credit)from future generations than earlier generations did? Crudely put, that our great grandparents lived to 60-70, but we live to 70-80, at the expense of our grand children living to 50-60?
Which is essentially the impact of excessive borrowing from future generations. If we hand them a broke-ass busted credit card because we over-used it to pay for our 'compassion,' then they will not be able to fund their 'compassion' at the same level we find is a 'right' that is calculable without any consideration of actual generational contribution history. We define the benefits via a political process(in which the future has no vote whatsoever)and then borrow from that future generation as required to try and pay for it.
That future credit based insanity cannot be maintained for every generation, it has to end, because it is economically unsound, cannot be sustained forever.
For the exact same reason that individuals do not have an infinite amount of credit, neither do generations of individuals, collectively. We collectively act, publicly, as if the 'full faith and credit of the US Treasury' is infinite.
It is not. Not theoretically, and not in fact.
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