We’ve Maxed Out Our Kid’s Credit Card. Can We Stop Now?

Dan Liddicott Midlands Coordinator and Young Libertarians Coordinator


Among all the drivel coming out of the Tory party conference there was at least one brief window of sanity. Ministry of Justice Under-Secretary of State, Dr. Philip Lee MP, admitted in a fringe event that our beloved NHS is actually funded as a Ponzi scheme as he questioned the morality of asking younger people today to keep paying for a service from which they may never benefit.

The BBC reported that ‘the Bracknell MP told the meeting how he had clashed with George Osborne in 2015 after he described the then chancellor’s pensioner bond scheme as “intergenerational theft” designed to woo older voters at the expense of younger people’.

‘He suggested it was not fair to tell the under-44s who were “struggling” with a family: “‘Oh, by the way, we’re also going to tax you even more because this Ponzi scheme that we’ve had in play for pensions and for healthcare and for social care for the past 30 years is about to collapse. So therefore we want you to work really, really hard, but when you get to 65, it’s not going to be there.’ Hands up who thinks that’s a really compelling narrative?”‘ (BBC, 2 Oct 2017)

A damning assessment he’s since tried to row back on somewhat, but in actual fact he’s quite right. The welfare state, in fact, state funding as a whole, is a Ponzi scheme – so groaning under its own weight – that successive tranches of new payees cannot provide enough tax to support it all.

“There is an expectation endemic throughout most of UK society that the government ought to do a lot of things for people. From education, to healthcare, to housing, a great many people think that if there is a ‘social’ need it is for the government to sort it out.”

There is an expectation endemic throughout most of UK society that the government ought to do an awful lot of things for people. From education, to healthcare, to housing, a great many people think that if there is a ‘social’ need it is for the government to sort it out. They habitually use the collectivist nouns of “we”, and “society” as if those others that fall under those terms are all equally consenting participants in whatever is being proposed in their name. And while “we” and “society” can be invoked for what they perceive to be good (helping the poor) or evil (yet another war in the middle east), the concept remains resolutely fixed, and the evil result quickly forgotten. We should not be surprised, people love sweetness and light – especially sweetness. We are experts at ignoring those things which conflict with our world view and with which we disagree, while simultaneously supporting policies which bring about those very ends we hate. In spite of this, in their own mind these most by and large are honest, hardworking, genuine people who, at the bottom of their hearts, believe in what they espouse regarding the welfare state – to contribute into it and take out of it when they need it. They, many of them, honestly believe it to be a ‘moral good’ to pay tax and leave it to the state to then look after them.

In theory, perhaps that wouldn’t be such a problem if it were voluntary. But there is a problem. It isn’t and never was, viable. The notion that a person can ‘pay in to the system’ their whole life and expect to be taken care of from cradle to grave is, forgive the pun, bankrupt! The generation who bought into it were sold a lie. The generation that followed it, believed the lie, and by now it is plain that this was a con. Yet successive governments, and generations of voters, have kicked the can down the road term after term, none of them having the guts to point out what is made clear with common sense and simple accounting – there isn’t enough money to do this.

So what was going on? If you think you can pay into a pot, and then withdraw at some later date some needed amount, then logic dictates that you, “we”, “society”, must have expected to pay in some amount of money in the equivalent of what you, “we”, “society”, later withdraws. If this was your bank account you could only work on such a principle, and only withdraw up to that amount that you had previously paid in. Amazingly this logic was not applied to the welfare state, and still isn’t. Instead a woefully inadequate amount (though costly to the individuals) gets paid in compared to what gets paid out. The welfare state, after all, may attract infinite demand… which it must then meet from only finite resources. But these trifling small details never mattered because as a philosophy it feels good. The collectivist nouns come out, “society” will look after us. “We” are all in it together. The warm fuzzies displace rigorous accounting, and visions of utopia dance in our heads, even though it runs headlong against everything that is common sense. Even if half of the “we”, rich or poor, don’t want to be “in it” with anyone – they are coerced into it, they don’t have the right to do their own thing, they are made to join in – how warm and fuzzy that must be (another topic).

By now it is clear that the promised socialist utopia is not coming (it never was), yet the creaking left over institutions are clung to by weeping masses of people as if they have magical properties capable of defying basic arithmet