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Excellent though long article about the relationship between the generations in the welfare state who the social contract has changed and the effects on the demographics of our society and ways to try to redress the balance.

The Empty Playground and the Welfare State - Ramesh Ponnuru - National Review Online

Quote:

If the elderly often leave some of their pension funds to their children and grandchildren, the transfer programs are larger than optimal. In passing he suggests that the effects of entitlements on family size in his country have been anything but small: “In Germany, generations of households have learned that life in old age can be pleasant and economically sound even without children. The idea of marrying and having children in order to ensure satisfactory consumption in old age had been common before Bismarck’s reforms. A century later” — Sinn was writing in 2002 — “this idea has largely vanished, and a growing number of people prefer to stay single or at best form a ‘dink family’ — with double income and no kids.”

The author suggest that increased child tax credits are a way to "compensate" families who raise children who pay for the reitirement benefits of the elderly.

The suggestion seems to be a very sensible one (my kids are adults so I will not benefit). This sort of arrangement will even work within the context of a flat tax system.