From Andrew Stevens, CNN
November 26, 2012 -- Updated 0722 GMT (1522 HKT)
(CNN) -- The speed at which the global economy has pivoted from the West to emerging economies like China is astounding, says author Niall Ferguson.
Ferguson sat down last week with CNN's Andrew Stevens in detailed talk on the global economy.
<b>Why are Western economies performing so badly?</b>
One way of thinking about this is to ask why so many economies, most of them Western are currently crushed by debt, which in some cases exceed 100% of GDP? And these debts are forecast to rise even further in the U.S. One way of thinking about this is to say that debt represents a tax on the future. And the big accumulation of debt that we've seen over the last 20 or 30 years in the Western world reflects a breach of contract between the current generation and the next generations. And these debts represent a big burden on the future. And that is one reason I think we've seen a slowdown in the Western world because these burdens of debt act as a major check on economic dynamism.
<b>Why has this generation decided to ignore future generations? Why have we become so selfish?</b>
At some level I think it's a cultural shift. We've moved a long way from our ideals of self-sacrifice for the future that characterized the West during its hay days of industrialization, overseas expansion -- not to mention large-scale warfare. So there's partly been a cultural shift towards the 'me generation' -- consume now, live in the present.
I think what happened after World War II was that it was decided in most Western countries to create pretty generous welfare states that were going to exist to transfer resources from the rich to the poor. But over time the welfare state has become dysfunctional in a surprising way. But in a way it became a victim of its own success: It became so successful at prolonging life, that it becomes financially unsustainable, unless you make major changes to things like retirement ages. And everywhere you see the same basic story, whether you're looking at northern Europe, southern Europe, or north America -- welfare states become harder and harder to finance, and structural budget deficits emerge.
Read More: http://edition.cnn.com/2012/11/26/bu...html?hpt=hp_c3
Another damning indictment of the welfare system by Niall Ferguson
November 26, 2012 -- Updated 0722 GMT (1522 HKT)
(CNN) -- The speed at which the global economy has pivoted from the West to emerging economies like China is astounding, says author Niall Ferguson.
Ferguson sat down last week with CNN's Andrew Stevens in detailed talk on the global economy.
<b>Why are Western economies performing so badly?</b>
One way of thinking about this is to ask why so many economies, most of them Western are currently crushed by debt, which in some cases exceed 100% of GDP? And these debts are forecast to rise even further in the U.S. One way of thinking about this is to say that debt represents a tax on the future. And the big accumulation of debt that we've seen over the last 20 or 30 years in the Western world reflects a breach of contract between the current generation and the next generations. And these debts represent a big burden on the future. And that is one reason I think we've seen a slowdown in the Western world because these burdens of debt act as a major check on economic dynamism.
<b>Why has this generation decided to ignore future generations? Why have we become so selfish?</b>
At some level I think it's a cultural shift. We've moved a long way from our ideals of self-sacrifice for the future that characterized the West during its hay days of industrialization, overseas expansion -- not to mention large-scale warfare. So there's partly been a cultural shift towards the 'me generation' -- consume now, live in the present.
I think what happened after World War II was that it was decided in most Western countries to create pretty generous welfare states that were going to exist to transfer resources from the rich to the poor. But over time the welfare state has become dysfunctional in a surprising way. But in a way it became a victim of its own success: It became so successful at prolonging life, that it becomes financially unsustainable, unless you make major changes to things like retirement ages. And everywhere you see the same basic story, whether you're looking at northern Europe, southern Europe, or north America -- welfare states become harder and harder to finance, and structural budget deficits emerge.
Read More: http://edition.cnn.com/2012/11/26/bu...html?hpt=hp_c3
Another damning indictment of the welfare system by Niall Ferguson
