The Numbers that do not Add Up

My neighbour Alan retired last year. He worked for the local council for forty-one years. The pension he was promised at twenty-two is not the pension he is getting at sixty-seven. It still pays. It pays a little less each year, in what it actually buys. He does not complain. He says he is lucky. He is lucky, compared to what is coming for anyone younger.

Countries borrow money. A country, like a family, sometimes pays for things today that will be earned back tomorrow. This is how most of the roads and schools and hospitals got built.

The borrowing works when the tomorrow the country was borrowing against actually arrives. When there are enough young workers to pay the loan back. When the economy grows. When the tax base holds up.

The tomorrow many countries were borrowing against is no longer arriving the way it was meant to. Fewer young workers, because of the quiet kitchens. Slower economies, because the factories have gone. Tax bases shrinking, because the biggest companies have found ways to pay their taxes somewhere else.

The debts have kept growing. The interest on the debts has kept growing. The promises to today's pensioners, and tomorrow's, have kept growing. The gap between what was promised and what can be paid is very large, and it gets larger every year.

At some point, something gives. The old promises are quietly reduced. The money itself is made to be worth less, through inflation. The state keeps its form but loses its capacity. The generation that receives the reduction is not the generation that made the promise.

This does not arrive as a crisis. That is the strange part. It arrives as a slow lowering. The pension that buys a little less each year. The hospital that has been waiting for a new wing for ten years. The school that is not quite as good as the one your parents went to. The road that is a little worse than the road you remember.

The crisis, if it comes, comes at the end, when all the small lowerings have added up to a country that cannot quite do the things it is supposed to do. And by then, fixing it is very hard, because the young people who would have fixed it were never born.

Meanwhile, the army has been shrinking for years. The peace has been so long that a strong army seemed like a waste. This will turn out, I think, to have been a mistake. A strong army is invisible when it is working. You only notice it was doing something when it stops.