By Tom Rhodes, 1/4/2013
Should the wages of a young person be garnished to make the car payment for their parent? Is it fair for a child to have to repay the credit card debt and mortgage of their grand parents? Should we as a society jail those children who refuse to pay off the medical expenses of their
For good reasons children are not treated like adults, nor expected to have the same responsibilities. In fact by law a minor you cannot enter into any contract nor held accountable for the foolishness of somebody lending them money before they are 18 years of age. The reason is that children are not mature enough nor developed enough to make such decisions. In fact even if an legally an "adult" there are things we don't allow you to purchase or use until you are 21, like alcohol and hand guns. These rules are in general good and appropriate restrictions on people whose frontal lobes are not fully developed. Physiologically human brains cannot adequately judge the future consequences of actions until the frontal lobes are fully (or nearly fully) developed. This is a scientific fact, and our laws and restrictions on youth, like not being allowed to drive until 16 years of age, are reasonable and justified.
For rational reasons we are not legally nor morally responsible for actions as minors when we become adults. So to consent to any legal obligation you must be 18 years of age. Now we have a problem because old people are legally obligating minors to $180,000 of debt. Once a person turns 18, they immediately have $180,000 of debt that they must pay as their share of the debt incurred by their grandparents. This is morally reprehensible.
What will we do if those people say "I didn't consent to that debt, so won't pay it." Worse yet you know how they will pay it, they will inflate the money, so that they don't pay $180,000 with equal value. They will devalue their grandparent's holdings, lie about inflation numbers, so that they can keep more value of their earnings and in real value only pay pennies on the dollar. Grandma and Grandpa's nest egg is going to be worth squat. They are forcing today's children to pay for their lavish life style. Most of the wealth of the USA is in the hands of old people, not young people. If Social Security and Medicare were means tested, the benefits could be increased to those in need, and still cost a lot less. But the Ponzi Scheme that is Social Security puts the burden on our youth.
Our youth is not stupid, they will inflate the money so that their wages are dramatically higher in absolute numbers (not value) than their parents and grand parents, but pay back the debt they didn't agree to incur, with dollars worth less than when the debt was created. That or they will have to do like Karl Denninger proposes and refuse to pay.
So if the youth are forced to repay a debt that they didn't consent to through taxes imposed by people they had no choice in selecting (can't vote until your 18) what choice do they have? Didn't we revolt and succeed from England over Taxation without Representation. The young entering the work force start out with a debt of $180,000 that they never consenting to borrowing. They aren't going to pay it, they will find a way to make Grandma and Grandpa account for that money one way or another; either refusal to pay for it outright or so inflate the currency that it won't matter. Inflation has been their primary means for 30 years. Look at Shadow Stats web page, where they show what inflation would look like if we still counted it the way we did in 1980. Real inflation has been as much as 10% in recent years, but our government has have rigged it so that they only report 2% or so, in order to repay the debt grandma and grandpa forced on us, with inflated dollars. They get a 2%COLA, while their dollar buys much less. In effect taxing the retirement savings and payments to old people by the difference and forcing the old to actually pay at least part of the debt they incurred.
We cannot keep kicking the can down the road, future generations did not consent to borrow money today, so they could pay it back tomorrow. Children have no legal or moral obligation to repay their parent's and grandparent's debts. They will find a way to avoid repaying those debts. Greece is defaulting; the US will likely suffer the same fate. I live in Florida, where Seniors move to retire, they vote for absurdly low property taxes, and to defund schools, saying "I pay high taxes up north to send my kids to school, I shouldn't have to pay to send more kids to school." In their retirement, their "income" is dramatically lower, they get tax differed earnings that they don't pay taxes on, and receive social security, medicare, and other benefits far in excess of what they paid into the system. Yet expect those same kids to pay more in taxes to pay off the debt they committed to. The fact is that old people have the money, not the young, they refuse to pay the young(real wages are lower), and even employ them (unemployment for those under 24 is at depression levels); the result will be healthcare rationing for the old, death panels, smaller COLA's, inflation to devalue savings.
There are and will be repercussions from Baby Boomers sticking future generations with $180,000 of debt each; and the Senior Citizens are not going to like them. The youth will say screw it, develop some disability or other means of having the government support them instead of working, they will use or change the system to avoid the massive tax liability they now have. After all what obligation do they have to repay money they never consented to borrowing?