"The great increase in longevity has produced a surge in the desire to accumulate assets for retirement. It has outpaced the ability of the private sector to produce assets, so we need a larger government debt"
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Vickrey is doing something unfashionable: treating government debt not as moral failure but as plumbing. The line starts with a demographic fact - people live longer - then follows the money trail to a blunt conclusion: if everyone wants to retire with claims on future goods and services, someone has to issue those claims. When he says the desire to accumulate assets has outpaced the private sector's ability to produce them, he's puncturing the cozy assumption that markets automatically generate enough safe, retirement-ready paper for a graying society. The subtext is a critique of scarcity thinking in finance: you can have plenty of real resources, but not enough credible, liquid instruments that let households store purchasing power without taking on excessive risk.
His solution - "we need a larger government debt" - is deliberately provocative because it flips the usual script. In Vickrey's framing, public debt isn't primarily about financing profligate spending; it's about supplying the economy with a stock of safe assets that match private saving desires. That is classic functional finance: judge deficits by their economic effects, not by an accountant's aversion to red ink.
Context matters. Vickrey wrote as pensions were shifting, longevity was climbing, and faith in private financial engineering was rising. He's warning that the "private sector" can't conjure safety out of thin air without periodic blowups. Government bonds, by contrast, are a social technology: a collective promise that stabilizes portfolios and, if managed well, keeps demand from sagging under the weight of mass saving. It's less a call for bigger government than for a bigger, steadier balance sheet behind everyone's retirement dreams.
His solution - "we need a larger government debt" - is deliberately provocative because it flips the usual script. In Vickrey's framing, public debt isn't primarily about financing profligate spending; it's about supplying the economy with a stock of safe assets that match private saving desires. That is classic functional finance: judge deficits by their economic effects, not by an accountant's aversion to red ink.
Context matters. Vickrey wrote as pensions were shifting, longevity was climbing, and faith in private financial engineering was rising. He's warning that the "private sector" can't conjure safety out of thin air without periodic blowups. Government bonds, by contrast, are a social technology: a collective promise that stabilizes portfolios and, if managed well, keeps demand from sagging under the weight of mass saving. It's less a call for bigger government than for a bigger, steadier balance sheet behind everyone's retirement dreams.
Quote Details
| Topic | Saving Money |
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