Economic Woes and No Easy Answer – Why??June 7, 2010
Read carefully this article that focuses on the Prime Minister of Britain. He is not exaggerating in the slightest when he says that there are perhaps DECADES of financial woes ahead for his country. And, as we know, as goes Britain, so goes the rest of Western Europe. Here is a quote that gives the flavor:
Mr. Cameron said that at more than 11 percent, Britain’s budget deficit was the largest ever faced by the country in peacetime. But he warned that the structural deficit was more worrisome. Britain currently owes a total of more than $1.12 trillion , he said, and in five years will owe nearly double that if nothing is done now.
Considering their relatively small Gross Domestic Product (compared to the US) this is an almost insurmountable problem for them. What can we take away from that? Namely that most other western nations are next. The conditions that existed for their economic demise are at our doorstep as well. But what has lead to this? Surely not the current recession? Nothing is ever that simple…except perhaps in this case, it is.
Almost every economic system we have in place today – whether public or private – was designed and put together in the 1950s. Post-war governments saw a way to prevent their economies from going through the endless cycles of boom and bust. They perceived (correctly) that governments could control the pain by collecting more taxes (during boom times) and then distributing to those hardest hit in bust times.This actually mirrors what ancient Egypt did under the leadership of Joseph.
So why isn’t that going to work this time? First, the problem has become much more global and much more complicated. As in the Depression, it is actually the policies of the Government (i.e. lending rates that were too low) that caused investors to take risks way beyond sanity. But the second problem is the one that will sink us.
Starting in the 1970s, people began to live much, much longer than ever before. At the same time, this emerging “retired” generation no longer had close ties to their children and grandchildren. This meant they had to rely upon their own savings, and public/private pensions for retirement years, and not the largesse of those children they had brought into the world.
When Social Security was invented, the average American lived to age 55. They could not collect Social Security until 62. Do you see why the system worked back then? By 1965, the average American lived to age 63. That meant the average person collected Social Security for ONE YEAR! That would hardly bankrupt the system.
Pension plans only expected to pay out to retired employees for a couple of years. Because pension funds were so rich back then, they even allowed spouses to collect after the wage-earner died. Some plans even allowed you to retire early. Why not? No one was going to collect on it anyway. Many pensions rarely had to dig into their capital. The interest on their investments paid all the benefits.
But then in 1975, life expectancy went up to 70. 1985, they lived to 73. Now, the average person lives to age 80. Social Security cannot afford that. Neither can pension plans. Up until recently, governments borrowed from their retirement accounts to pay other bills because they didn’t think that the Economy would ever need that money.
Here is the problem. We are living way too long for the system we have created. Can you see what that is going to bring? Assuming (as I do) that people are born in sin and are basically self-centered, then you can see who society is going to blame for the problem: The elderly. Read Kurt Vonnegut Jr.’s prophetic short story “Welcome to the Monkey House”. In that story, there is an industry developed for people who want their relatives to end it all.
As we pray, remember that the history of this world shows that when times get tough, everyone exploits the weak. How can we minister in the opposite spirit? I believe that we start with our own families. Make sure in the days to come our parents and grandparents are being taken care of. For some people, that will mean reconnecting and reconciling with them. I know it is tough, but it is God’s will to honor our parents, no matter what has transpired. Then, believers in God can look at the elderly in their churches, in their communities, to determine if they are being provided for. This is good religion: To take care of widows, orphans – and basically anyone who is helpless – in their distress.
Rather than wait for gloom and doom, we can anticipate it and minister with power and God’s calling.