It kind of raises a broader question, which is this: What cumulative engine of wealth creation is equal to (or ideally superior to) the inevitability of old age senescence and insecurity?
By the numbers, between 2% and 9% growth per year will do. This is not impossible.
But it depends on copious inputs, in particular, lots of young smart ambitious people working on important problems.
Obviously a tax-advantaged intergenerational Ponzi scheme was not that. It could never be that, unless we lived in a world where houses (and only houses) were perfect von Neumann machines that spontaneously exploded about once every six months. That would justify pouring most of the surplus capital of an entire economy into building them. Haha!
But even Japan, who has succeeded in generating lots of relatively healthy retirees (note that poor societies don't have this problem) and has kept housing relatively affordable, still has a crashing birth rate, a stagnant economy, and little opportunity for young people resulting in a terrible misalignment of incentives. Instead of being locked out of housing, Japanese young people are locked into big mature zombie businesses that promote only on seniority and locked out of economic opportunity.
Why? Is it some law of the universe? Obviously older people have a wealth and power differential and a justifiable fear of poverty in old age, so they will seek to generate some form of leverage they can securitize and then benefit from.
I can imagine a better world where, for example, Australian super was invested exclusively in Australian primary and secondary production, and the growing productivity and wealth of advanced manufacturing in Australia funded wealth growth for everyone and security for our retirees. This would be far better than housing, or social prohibitions on changing jobs.
But it's not totally clear to me that even the best factories can regenerate capital fast enough to keep up with the depredations of old age, at least in a society with a fertility rate that's not well above 3, let alone 2 or 1. You need strong consumer demand to drive manufacturing growth and you need healthy young people to outnumber sick old people. Obviously!
I think there's some kind of structural stable attractor that all civilizations get wealthy until they're rich enough that lots of people don't die young, at which point the dependency ratio pushes young people away from family formation and investment in the future.
There are only two good ways out that I can see. 1. Immortality. Slow down aging, let economic growth keep up, extend the fertile window, become elves. 2. AI-driven hypergrowth.
Niki Scevak (@nikiscevak)
The saddest part of the disastrous budget is that it strikes down hope in young, ambitious Australians 😔
The doublespeak is horrific: supposedly about young people, but nothing in it is for them. Supposedly about productivity, but more red tape everywhere
— https://nitter.net/nikiscevak/status/2054331850873856054#m