Member-only story
The Ledger Has Two Pages
Why “pensioners are a burden” is an accounting error, and who is actually paying for whom
Diogo Ribeiro — mathematician, Faculty of Media Arts and Design, Technical University of Porto
There is a sentence that circulates in every European budget season, and it has become so familiar that most people no longer hear it as a claim. Pensioners, it says, are a cost to society. Sometimes the word is “burden”, sometimes “weight”, sometimes the more clinical “age-related expenditure”, but the grammar is always the same: there is a group of people who receive, a group of people who pay, and the first group is getting larger. The sentence has the great advantage of being checkable against a single document, the annual budget, where pension outlays sit near the top of the expenditure table and look exactly like what the sentence says they are.
The argument of this essay is that the sentence is not false so much as badly constructed. It reads one page of a two-page ledger and reports the total. On the page it reads, pensions are a transfer from people who work to people who no longer do, financed by taxes on the first group. That page is real. But there is a second page, and on it are written the schools, hospitals, roads and institutions that the same pensioners financed over forty working years and that the present working generation inherited without paying for; the taxes that pensioners continue to pay on every euro they spend; the private transfers that flow, on…
