Mary Dejevsky: We are storing up a lot of trouble for the next generation

Governments of the future face as yet unsuspected liabilities

If the Prime Minister went on television tonight and cited top-secret intelligence to warn of an imminent foreign threat, what proportion of viewers would believe him? And how long will it be before any British government carries conviction with such an argument? I doubt that it will be in my lifetime. That is how deep scepticism of government and its use of intelligence now runs.

Something similar will apply to the experience of the present economic meltdown. Except that the bitterness and disillusionment will not stop with those who lived through it as adults. The memory will pass to the next generation, changing attitudes and storing up liabilities, as yet unsuspected, for governments to come.

It was not until quite recently that I realised how dark a shadow the Second World War had cast over my childhood. The war itself was long over, but the experience of bombing, evacuation and rationing endured well into the Sixties in our parents' mindset, and it could not but influence ours too. Their caution and making-do may have contributed to the hedonism that came next – but it was not before the virtues of saving money, not wasting food and, a little later, home-ownership had been drummed into us.

For the generation immediately before mine, diligence and planning were mostly vindicated. Those now in their sixties and seventies are the healthiest and wealthiest pensioners ever. They learned from the inflation of the 1970s that bricks and mortar were safer than a bank deposit. They were the first to enjoy decent occupational pensions; they cashed in their chips in time.

Today's 40- and 50-somethings were the first to enjoy credit on-demand, and the immediate gratification it bought. We had also seen, from our parents, that home-ownership paid off handsomely. So that is where we put our money – the "gentrification" of our cities is largely down to us.

We also took lessons from government. Courtesy of "Sid" and the excitement of the Channel Tunnel, many became first-generation share-holders. Then we learned that money grew from plastic and only a puritanical fool turned down all the low-interest credit that was on offer. One way or another the tax and benefits system contrived to favour the indebted. Buy-to-let, anyone?

The next generation took its cue. Scarcely out of college, they sought to "get their foot on the property ladder". Private enterprise and share ownership held few fears in a market brimming with confidence. The negative equity scare of the early 1990s was a blip reflecting an unwisely timed tax change. The bursting of the dot.com bubble could be dismissed as the result of transatlantic excess. For most, the gradients – of house prices, the stock market, even the boring deposit account – were steeply upwards. Government coffers groaned under the weight of the extra tax income.

For their children, it will be different. We can already see a response. Enquiries about teaching careers are sharply up. But the retreat to the supposed security of the public sector will last just as long as that, too, is not forced to contract for lack of revenue.

The Government's immediate command is that we must spend, spend, spend, until ministers one day reverse tack and tell us to save. They blame our resistance on our primitive "animal spirits". But why should we co-operate? A whole edifice of incentive and reward has collapsed beneath us. Government help is reserved for the overextended and feckless.

So we are learning the lessons. A reasonable strategy for the new reality would entail spending as you please, piling up the credit (at these rates nothing else makes sense), and abandoning the savings and pension plans. Keep any deposits small enough to claim every possible entitlement from government. No developed country allows its pensioners to starve.

Even if my generation is too steeped in the old ways to adapt, the next will demand its due – with potentially bankrupting consequences for government. Taxes may have to switch to consumption; saving for retirement made compulsory, and pensions backed, as they used to be, by the Exchequer, not the stock market.

And future governments will have to realise that, if they want people's cash, they will have to offer something more durable in return than casino-banks and negative interest rates. The lessons younger Britons are already absorbing from their parents' experience have long-term implications for politics that have so far eluded our leaders' grasp.

m.dejevsky@independent.co.uk