Billing It Forward

P.J. McNeal: About this five thousand dollars. Where did you get it?
Tillie Wiecek: That is important?
P.J. McNeal: Yes, it's very important. Where he got it--or where YOU got it--might have a lot to do with the case. He might have had it hidden away, or maybe you got it from some mob that's trying to spring him.
Tillie Wiecek: No, no. It's mine. I work. I scrub floors. Eleven years I save every penny. I never miss a day's work. I earn it...every penny.
--Call Northside 777

Occasionally I hear someone recognize the sacrifices that people in previous generations made for the present generation. In economic terms, sacrificing means foregoing something in favor of something else. Economizing.

The greatest economic sacrifices that one generation can make for the next are those which build wealth for the future. By doing so, one generation quite literally pays it forward to the next generation.

A generation can pay it forward in various ways. It can work more and rest less. It can save more and consume less. It can invest part of those savings intelligently in productive capital that the next generation can work with to produce even more wealth.

The present generation is doing little of this. It wants to retire early. It is withdrawing from the workforce in favor of transfer payments. It spends more than it produces in income (no savings). Debt is taken on to subsidize this habit. Policies encourage consumption and debt and discourage savings. Capital for future productivity improvement is consumed.

All of this leads to less wealth, not more, for future generations.

Rather than paying it forward, the present generation is billing it forward.