Unabashed by the contrast between Real Life and his September prediction (how far ago that seems already) that McCain would win in a landslide, Spengler looks again at Morality, Economics and Demography.

And makes some hefty points about so-called free markets:

There is something profoundly disingenuous about the pure free-market model, to which an even stronger objection might be raised, namely that it cannot possibly exist.

The market does not spring into being like warriors from the dragon’s teeth sown by Cadmus. Markets are part of society, and if society passes the demographic point of no return, the market will die along with all other social institutions.

There is an obvious, glaring flaw in the deterministic model: even if we assume that no one ever cheated, lied, or stole, the market can’t determine who enters it and who leaves it …

… Underlying the crisis is the Western world’s repudiation of life, through a hedonism that puts consumption or "self-realization" ahead of child-rearing. The developed world is shifting from a demographic profile in which the very young (children four years and under) outnumbered the elderly (65 and older), to a profile with 10 times as many retirees as children aged four or younger…


Percentage of developed nations’ population younger
than four years and older than 65 years

This general subject is picked up by Guido:

It takes something like 30 taxpayers to support a bureaucrat, yet the ratio of bureaucrats to productive taxpayers is worsening. State pensions are unfunded. Where in the coming decades are the taxes going to come from to pay for the pensions and bureaucrats as well as servicing the colossal government debt?

And, bang on time, in the USA the wheels are starting to wobble on unaffordable state programmes, not to mention unaffordable and underfunded public sector pension schemes.

One core feature of economic life as we have known it for several centuries is a sense of confidence in the future which makes private saving and investment worthwhile.

That intelligent private risk-taking generates the creativity and wealth to allow democratic government to pursue its schemes with something like broad popular consent.

But this is Spengler’s core point:

Economics simply never has had to confront a situation in which the next generation simply failed turn up.

Honest money: telling you things about yourself – and your future – which you might not want to hear?