The Real First-World Problem

My soy decafe latte is too cold…

The internet is so slow…

The fillet was a little well done for my liking…

There are not enough movie channels on this flight…

We jokingly — or at least some of us do — refer to these as ‘first world problems’.

If this is all there is to complain about, then life is pretty good.

The fact that we grumble on a daily basis about what are essentially trivial issues is due to our heightened expectations.

We’ve been conditioned by our experiences to expect a certain level of service and/or quality dining experience.

Should these not measure up, we have the perfect forum to vent our every frustration…social media.

As a society, our expectations are high, and our tolerance levels low.

What a difference to those who forged the Anzac spirit.

They slept in the trenches, ate ‘bully beef’, and drank tepid tea or coffee. This was their lot. They accepted it and got on with life…expectations low…tolerance levels high.

The real first-world problem we have is our sense of entitlement.

Entitlement has given the Western world a soft underbelly.

We whinge, moan and complain about things our forefathers would have been thankful to receive.

The 20th Century was an exceptional period of growth in economic, financial, technological and human terms.

For thousands of years the world progressed at glacial speed. Hardship and toil was the legacy passed from one generation to the next. There was no expectation of children living longer than their parents.

If you were a butcher, baker or candlestick maker then your son/s and their son/s most likely followed in the family’s footsteps.

Then along came the Industrial Revolution. In the space of 150 years, society transformed from the agricultural to the technological age.

Sanitisation, mechanisation, medication, population, financialisation and automation have delivered to us a first-world standard of living.

However, our progress has come with a hefty price tag. 

The world is awash with debt…more than US$230 trillion of it.

We’ve created ‘fake prosperity’…the illusion of wealth. Borrowing heavily from the future to enrich our lives today.

Fake prosperity has deluded us into believing we’re entitled to a certain standard of living.

Whether we can afford it or not is irrelevant in a world of easy credit and ultra-low interest rates. Just add another trillion to the tab.

The two areas that society has come to expect as their right are retirement and healthcare…and the political class knows this.

We as a society believe we’re entitled to a state-funded pension and heavily subsidised medical care.

We either choose to ignore or conveniently forget that these entitlements come courtesy of the present-day taxpayer and rising public debt levels.

When taxpayers far outnumbered those who were eligible for age pensions and in need of healthcare, meeting these obligations was a much easier task.

Governments could afford to be generous…which unfortunately only added to our sense of entitlement.

However, the system is straining, and it’s a major first-world problem…and not only in Australia.

Take this headline from the Daily Mail on 18 December 2017:

‘Middle Class Pension Crisis — Official: SIX MILLION not saving enough for retirement’

And this from The Times on 2 January 2018:

This year is the 70th anniversary of the founding of the NHS [National Health Service] and Ms Cummings [chief nursing officer for England] aims to use it to prompt patients to rethink how they use it. “With the NHS coming under pressure as never before, we are asking patients and the public to use the health service responsibly…”

After 70 years of government-funded healthcare, it’s only natural that people are going to use and abuse the system. You have three generations that have grown up knowing nothing else.

Have the powers that be forgotten…it’s their entitlement.

This is an extract from the NHS site (emphasis is mine):

Funding for the NHS comes directly from taxation… When the NHS was launched in 1948, it had a budget of £437 million (roughly £15 billion at today’s value). For 2015/16, the overall NHS budget was around £116.4 billion.

In real terms, since inception, NHS funding has increased 800%. While over the same period the UK population has grown from 50 million to 66 million…a 30% increase.

Access to universal healthcare has an exponential (and unsustainable) cost curve.

People always find reasons to moan

Yet people still complain this ‘under pressure’ health system needs more money.

Why? People firmly believe they are entitled to first-class healthcare…irrespective of whether it can be afforded or not.

The big question in the era of increasing longevity is: Where will this additional funding come from?

More debt and/or higher taxes OR a shift to user pays?

The same articles could just as easily have been written about Australia, the US or any other Western country.

The problem is that we’ve grown increasingly more dependent upon government to provide us with what we now believe is our God-given right.

Government has painted itself into a corner. Without resorting to unlimited money printing, future governments cannot possibly deliver on the funding promises people believe they’re entitled to in full.

Therefore, as a wise man once said, ‘If something cannot go on, then it won’t.’

The way government ‘escapes’ from these unaffordable binds is via an economic collapse.

Logic and reasoned discussions are out of the question. Honesty is political suicide.

No, the solution to this problem has to come from the weight of the system collapsing on itself.

That way, there is something to blame…similar to the fate suffered by Greece in recent years. People will begrudgingly accept cutbacks when the headlines tell them how dire the economic situation has become.

French philosopher Guy Debord wrote that pre-capitalism was about ‘being’, capitalism was about ‘having’, and in late-capitalism what matters is only ‘appearing’.

We appear to be rich…but appearances can be deceiving.

Our first-world standard of living sits atop an increasingly unstable debt pile.

The world’s next (and even more severe) debt crisis is going to be the ‘solution’ to our real first-world problem of entitlement.

This will be no joking matter. Society has surrendered its independence to government and is ill-prepared to fend for itself.

The angst caused from adjusting to a more user-pays system will light up social media outlets.

Forget cold coffee and poor internet connections.

The new first-world problems are going to be:

My retirement is postponed indefinitely…

I can’t afford to see the doctor…

To avoid becoming a victim of the system, you need to take back personal control of your financial situation.

Regain your independence and think for yourself.

Surviving the next downturn with your capital intact is the real solution to this first-world problem.

To access your survival guide, please go here.


Vern Gowdie,
Editor, The Gowdie Letter

Vern Gowdie has been involved in financial planning since 1986. In 1999, Personal Investor magazine ranked Vern as one of Australia’s Top 50 financial planners. His previous firm, Gowdie Financial Planning was recognized in 2004, 2005, 2006 & 2007, by Independent Financial Adviser (IFA) magazine as one of the top five financial planning firms in Australia. He has been writing his 'Big Picture' column for regional newspapers since 2005 and has been a commentator on financial matters for Prime Radio talkback. His contrarian views often place him at odds with the financial planning profession. Vern is is Founder and Chairman of the Gowdie Family Wealth advisory service, a monthly newsletter with a clear aim: to help you build and protect wealth for future generations of your family. He is also editor of The Gowdie Letter, which aims to help you protect and grow your wealth during the great credit contraction. To have Vern’s enlightening market critique and commentary delivered straight to your inbox, take out a free subscription to Markets and Money here. Official websites and financial eletters Vern writes for:

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