Generational Accounting


Generational Accounting
An accounting method that considers how current fiscal policies affect future generations. Generational accounting analyzes whether government spending and tax programs that benefit current members of society will produce an unfair tax obligation for future generations. The purpose of this accounting style is to achieve generational balance, where current and future generations have equivalent lifetime net tax rates, which allows for fiscal sustainability.

The government's tax programs and fiscal policy can be adjusted to provide more care and benefits for certain members of a country's population. However, focusing programs on a specific group forces other generations to pay the costs, essentially imposing a taxation without representation. For example, spending on retirement programs for the elderly requires that younger generations foot the bill.

This concept can be extended to future generations. Let's say the government were to lavishly spend on programs to benefit its current population in the short term. The debt obligations could be so large, that they could not be repaid by the current population in an average lifetime. In this case, the debt would be passed on to the next generation of citizens, who must then pay for benefits they never received. Generational accounting aims to eliminate policies that negatively impact future generations.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Generational accounting — is a method of accounting for redistribution of lifetime tax burdens across generations from social insurance, including social security and social health insurance. It goes beyond conventional government budget measures, such the national debt… …   Wikipedia

  • Generational Accounting — Die intergenerative Belastungsrechnung (englisch (inter)generational accounting), auch Generationenrechnungswesen, stellt Instrumente zur Überprüfung der Generationengerechtigkeit bereit. Hierbei werden Teilaspekte der Fiskalpolitik beleuchtet.… …   Deutsch Wikipedia

  • Intergenerational Accounting — Die intergenerative Belastungsrechnung (englisch (inter)generational accounting), auch Generationenrechnungswesen, stellt Instrumente zur Überprüfung der Generationengerechtigkeit bereit. Hierbei werden Teilaspekte der Fiskalpolitik beleuchtet.… …   Deutsch Wikipedia

  • National accounts — Economics …   Wikipedia

  • Laurence Kotlikoff — Infobox Person name = Laurence J. Kotlikoff image size = 121px caption = birth date = birth date and age|1951|01|30 birth place = death date = death place = occupation = Economist, Professor, Author spouse = parents = children = website =… …   Wikipedia

  • Generation — For other uses, see Generation (disambiguation). Five generations of one family: in the center, a child; on the far left, her mother; on the far right, the child s grandmother; second from the left, the child s great grandmother; and second from… …   Wikipedia

  • Wealth — For other uses, see Wealth (disambiguation). Wealth is the abundance of valuable resources or material possessions. The word wealth is derived from the old English wela, which is from an Indo European word stem.[1] An individual, community,… …   Wikipedia

  • Wealth (economics) — In economics and business, wealth of a person or nation is the value of assets owned net of liabilities owed (to foreigners in the case of a nation) at a point in time. The assets include those that are tangible (land and capital) and financial… …   Wikipedia

  • Demographic economics — or population economics is the application of economics to demography, the study of human populations, including size, growth, density, distribution, and vital statistics.[1] Analysis includes economic determinants and consequences of marriage… …   Wikipedia

  • Tasa de dependencia — por país en 2008, según el Banco Mundial. Tasa de dependencia es el índice demográfico que expresa, en forma de tasa y en porcentaje, la relación existente entre la población dependente y la población productiva, de la que aquella depende. En las …   Wikipedia Español


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.