Given that net household worth has
risen from $47 trillion in 2003 to $56 trillion (as of the first
quarter of 2010) according to the Federal
Reserve, despite the loss of some $10 trillion in wealth resulting
from the Great Recession, it's reasonable to assume that there are at
least tens of trillions of dollars of wealth potentially available to
the Boomers to do something meaningful with as a legacy or just penance
Realistically, I think whatever is done will
have to be done in the form of bequests. The important thing, I think,
is to impress upon the Boomers that some significant portion of the
wealth they will leave at death doesn't really belong to them or even
their own children, but in some way to society and, yes, even the
Boomers should strongly resist treating their wealth
as free money to frivolously spend on whatever indulgence meets their
fancy. Strong peer pressure should be brought to bear on those like many
in the Greatest Generation who bragged about spending their children's
inheritance on expensive vacations and such. Boomers should also be
encouraged to continue building wealth past the point where their own
old-age needs are satisfied so as the leave as much as possible in a
lump sum for the next generation.
I disagree with Michael on whether the estate tax is the best or even an
appropriate way for Boomers to give back. For one thing, I think it's
important that the decision to give be voluntary and not coerced by
government. Also, depending on the estate tax is more likely to lead
Boomers to spend their money or give it to their children since they
will view the government as taking its share by force. The estate tax
should fall only on the very wealthy, not those with the sort of modest
wealth--in the tens and hundreds of thousands of dollars or low
millions--that Boomers are likely to have.
In Ancient Greece,
public works were often provided privately through what were called "liturgies."
Such things still exist today in the form of hospital wings, museums,
university buildings and so on that are public in nature but financed
through private giving.
Modern governments, however, have
historically been resistant to even taking private funds that are
offered gratuitously. I've always heard that the Treasury Department has
some sort of conscience fund to which people can contribute, but a
quick Internet search could not find its location or the amount of money
it receives annually. And I know that efforts by parents to fund
programs at public schools have been rebuffed as contrary to the goal of
equalizing school spending in rich and poor school districts. There are
cases where wealthy people had to fund private schools for poor
students to get around such restrictions.
The point is that
there are opportunities for governments to act like universities and
actively solicit private funds to pay for public works and programs.
Perhaps in the days when revenues were flush and the public's
willingness to tolerate taxation was greater, governments could afford
to reject such opportunities to obtain private funds for public
purposes. And of course there will always be a legitimate concern that
those making private contributions are buying more than the praise and
good will of the citizenry. But in times like these, when resistance to
taxation and spending are intense even for programs with broad public
support, we must be open to new methods of building and maintaining
society's critical infrastructure.