Back in 1986, Jerry Pournelle published an essay in Imperial Stars Vol. I: The Stars at War, in which he addressed the economic concerns of the USA’s aging population as it faced the prospect of bankruptcy:
If a family can see that over the next five years they’ve no choice but to spend money that won’t be coming in, they’ve got some decisions to make. Perhaps a second job, or a new source of income; but suppose there aren’t any?
Sell something? But if there’s nothing to sell? Cut expenses? Perhaps, although if the expenses are taxes that’s not going to work either. And governments, it seems, can’t cut expenses. Reagan’s “cuts” were only a slowdown of increases; the 1983 budget is considerably larger (in real dollars) than was the 1982 budget. So while we talk of budget cuts, we don’t mean it, and I don’t suppose we ever will.
Then what’s left? In the case of a family, it’s obvious. Speculative investments. If you’re going to go broke anyway, take a high flyer and the worst that happens is you’re bankrupt sooner; at best you make enough to keep going.
Return now to the US: we have an aging work force. It is absolutely predictable that in a few years there are going to be more people retired, and fewer able to work; and somebody’s got to support the retired. They’re voters, you know, and they’ll be organized.
Project this scenario ahead twenty years, and you can scare yourself; yet I think of no single institution, none whatever, that can and will do anything about it. All parts of our government operate on a much shorter time frame. If we had one hereditary house in Congress—heresy as it is to say—we’d at least have an institution that worried about the next decade, since its members would know they’d still be there to face the problems. They might also be concerned about their children. But we have no such institution in government, and now that the family has become relatively unimportant we don’t have many private ones to look that far ahead either.
Does this mean we’re doomed?
I don’t know. It’s sure a hell of a challenge.
How, then, can we prevent our children from cursing our memory?
The best way, it seems to me, is investment; to do what Keyworth said the administration wants to do; but do it in a big way. Look: we’re facing bankruptcy. They keep projecting federal deficits larger than the whole budget was during the Johnson administration. The remedy, some say, is to raise taxes, but we all know that’s asinine. All higher taxes do is stimulate people to spend effort on tax avoidance rather than wealth creation. Right now we have teams of the brightest people in the nation working for the IRS, and other equally competent teams working for their victims; the vectorial sum of their activity is zero. How is the Republic well served by this?
No: if we’re headed for bankruptcy, we’d as well be hung for sheep as lambs. You’re going to have deficits? Pity; but if so, take some of it and invest. Back long shots. Like space industries. Lunar colonies. Heave money at the universities. Change tax laws to provide really heavy incentives for industry to do basic R&D.
What you’re praying for is a breakthrough; some way to change the very rules of the game. That’s happened often enough in history, although seldom in response to deliberate stimulation; but what the hell, we’re desperate, or should be.
And I mean that: we should be in a state of near panic just now. How can you look into the future and be anything but scared? The work force gets older. Our machines get older. Our taxes get higher, and our savings get lower. More and more people become concerned with “survival”, the underground economy is the only thing that’s booming (and what a marvelous thing that is! We get surgeons out painting their own houses, because it’s cheaper than hiring it done. A real accomplishment). We ought to be scared stiff.
One thing we now know with the benefit of 34 years of hindsight: permitting mass immigration to import a younger work force is absolutely not the answer and will not prevent succeeding generations from cursing the memory of the preceding ones. Bankruptcy and a lower standard of living would have been vastly preferable.
But, unfortunately, that was not considered an acceptable option to the Baby Boomers. Now, ironically enough, and as we may be seeing sooner rather than later in Virginia, there will be war.