Why you shouldnt feel bad taking money from your parents

By Joel Alas, April 2010

It is important for us to realize that we live in an era unlike any other. This may seem obvious, given the pace of technological change and whatnot, but it is something we often forget in those slow, grey moments when we contemplate our lives and what weve made of them (or, for most of us, what we havent). We forget that the circumstances in which we live are vastly different to those of even (or especially) our parents, when they were our age and went to university, got a job, bought a house and started a family. Yet we measure our progress in life by the same set of criteria that applied to our parents and more often than not, we find ourselves falling behind. This is an unfair comparison. Its time to break free of this guilt and realize that we are not acting out a re-run of the 1950s/60s happy sitcom that our parents lived through. In fact, we have been short-changed by our parents generation. If you are a twenty- to thirtysomething living a life less successful than you had expected, and are getting by only with the occasional cash injection from your tersely supportive parents, its time to stop feeling bad about it. Its not all your fault. When I talk of parents here, I dont specifically mean your parents. I mean the generation that is currently in power over politics and resources. Plenty of parents have done poorly, even in rich countries, and many cant afford more than the basics of life for themselves, let alone their adult

kids. But let me generalize for a minute, for the sake of painting a broad picture. The generation born between the end of World War II and the end of the Vietnam War grew up enjoying the benefits of the biggest public spending spree in the history of governments. Most rich western countries (the US, the UK, Canada, Australia, and Western Europe) spent an enormous amount of money on public services, such as health, education, public transport, highways and telecommunications, and invested fortunes to develop industries. By contrast, when we were growing up, the exact opposite was occurring. Governments were cutting their investments in public infrastructure and selling off their industries, and were generally handing control over to businesses to decide whats good for us (or, as it turned out, whats good for them). Our parents went to university at a time when it was easy to get in, and costs were either very low or free. Today, you must fight for a university place and pay for it for the rest of your life. Thats a broad generalization Canadians, Australians and Europeans still enjoy relatively low study costs, but British and American students emerge from university with an unimaginable burden of debt, and are forced to take any job, sometimes several, to pay it off. About jobs: Your parents left university and entered a world of possibilities. Governments were doing most of the hiring, and there were good well-paying jobs with long career prospects for anyone who wanted them. Corporations were still relatively humane back then, mostly because there were strong trade unions who forced them to treat employees like people rather than an exploitable resource. Fast-forward twenty or thirty years, and the situation is far bleaker. Unions

now barely exist, and as a result most jobs pay badly, have few benefits such as sickness or holiday pay, and are incredibly unstable. The idea of a full-time job for life has disappeared as companies push new workers into casual positions or hire them on short-term contracts. We entered the workforce as wages were being driven down by globalization, yet living costs were increasing. At a point in our lives where we thought we might be cemented into a career position, we find ourselves still working menial jobs and earning wages that seem better suited to high school students. As for the last criteria in the success test - buying a house our parents generation ruined that dream by creating a property market bubble that lasted most of the 1990s and well into the 2000s. Despite the recent economic hiccup, house prices are still insanely higher in real terms than when our parents started out their adult lives. Dont be fooled, the house-buying frenzy that our parents engaged in was a complete manipulation of the real estate market. The end result of it is that those holding the stock got richer, and those unfortunate enough to have been born a few years later are left out in the cold. It gets worse, though. Not only did our parents enjoy a period of incredible prosperity thanks to the hard work of their parents (who provided the tax money that paid for all those free university degrees and good jobs), but they also took money from our generation before we were even born. How? Well, they elected governments that borrowed huge amounts of money to spend on themselves. Governments, just like individuals, can take out loans, called bonds. By the time most government bonds are due to be paid back twenty or thirty years later, the politicians who made the decision to

borrow that money are long gone. But its the public who must pick up the tab. Today, were the public, and through our taxes and through the huge cuts in public spending that governments must undertake to cover the bonds we will be paying back the enormous amount of money that has been borrowed by the generation in power, much of it without our consent or political participation. The recent financial crisis (in which trillions of dollars was given blindly to the very banks which caused the problems) has been paid for with government loans that wont be due for two or three decades. How does the generation in power maintain its high living standard? By stealing it from future taxpayers. Thats only considering the current financial costs, by the way. It says nothing about the environmental and social costs that are likely to flow from the greedy decisions of those above us, who took so much from the planet and the poor, with no regard for the long-term consequences. The scenario is repeated in the sphere of individual debt. In Australia in the 1960s, private debt was equal to about 20% of GDP the total amount that the economy produces. Today it is 145% of GDP, meaning the country borrows 1.45 times as much as it produces. Its a similar story in the US, the UK, Canada and Western Europe. Under the guidance of the baby boomer generation, economies built on hard work, savings and sensibility have been turned to slush, and were the ones who will have to live with the consequences. The end result is a huge gulf of inequality between the generations. David Willetts, a British politician, recently released a book called The Pinch which details exactly how big this gulf is. He estimates that the generation aged between 45 to 65 own more than half of Britains wealth (that is, housing, physical assets, pension savings, and stock).

Since the start of the industrial revolution, each generation has enjoyed a higher standard of life than the one preceding it. Until now. Economic forecasts predict that ours will be the first generation to have a lower standard of living than that of our parents. If your parents are slipping you a little bit on the side, dont be shy in taking it. In fact, you should be asking for more. I started by laying out the obvious that we live in a time unlike any other. Thats an allowance for us to stop living under the constraints life-plans and expectations laid out for us by the generation that has just stampeded the path through the jungle ahead of us. But its also a call to change our behavior, to ensure we dont do the same. For starters, it would be pretty hard for us to even try, given the state of the economy and planet. The best way to break free of the guilt of not replicating the success of those ahead of us is to change course completely, set new markers of success (both personal and planetary), and step forward into the future bravely. Our parents generation swallowed the myth that economic prosperity is the only measure of success. Lets set ourselves a more sustainable agenda.