Federal spending is the most obvious example. The federal government is a machine that takes money from future earners and spends it on health care for retirees. Entitlement spending hurts the young in two ways. It squeezes government investment programs that boost future growth. Second, the young will have to pay the money back. To cover current obligations, according to the International Monetary Fund, young people will have to pay 35 percent more taxes and receive 35 percent fewer benefits.
But government is not the only place you can see signs of this present-ism. Business has slipped into this pattern, too. C.E.O.’s serve short stints and their main incentive is to make quarterly numbers, not to build for the long term.
Banks can lend money in two ways. They can lend to fund investments or they can lend to fund real estate purchases and other consumption. In 1982, banks were lending out 80 cents for investments for every $1 they were lending for consumption. By 2011, they lent only 30 cents to fund investments for every $1 of consumption.
As Robert D. Atkinson and Stephen J. Ezell note in their book “Innovation Economics,” American firms are also lagging in their commitment to research and development.
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