Young people's money has already been spent by the previous generation: veteran investor Wang Hongpin discusses whether the "lying flat generation" is at fault.

Senior investor Wang Hongbin pointed out that global assets and liabilities are out of balance, highlighting the intergenerational anxiety young people are facing. The Liba case involving Wang Youzeng further confirms the financial reality of one generation plundering the resources of the next.

In an interview, senior investor Wang Hongbin incisively pinpoints the collective anxiety young people confront today—have the money already been spent by the previous generation? Even more ironic is that when we look through Taiwan’s financial history, the Liba embezzlement case involving Wang Youzeng, the entrepreneur from the post-war baby boomer generation and founder of the Liba Group, is precisely a perfect example of one generation seizing resources from the next.

Young people inheriting the “intergenerational bankruptcy” of the baby boomer generation

Wang Hongbin cites a McKinsey report, “An Unbalanced World,” saying that the global assets-and-liabilities balance sheet has surged from 200 trillion USD at the end of the last century to 600 trillion USD today. However, of that massive growth of 400 trillion USD, only one-third comes from genuine productivity improvements; the remaining two-thirds are built up by financial bubbles such as speculative real estate and speculative assets.

This brings about deadly social problems. During the bonus era of relative social stability and extremely low costs of production factors, the previous generation pushed up prices and housing prices to the sky through speculation on the assets they held. As a result, young people are forced to pay labor costs dozens of times higher than before just to barely secure the same standard of living. An overwhelming majority of assets and resources are still firmly in the hands of the baby boomer generation. Young people hold only a negligible proportion of assets. Working hard is no longer a way to turn things around, and the only remaining hope for accumulating wealth is to wait for an inheritance.

Wang Youzeng’s “personal finance logic” of leaving debt in Taiwan

In the interview, Wang Hongbin sharply pointed out that the debt-using logic of people with money is different from that of ordinary people. For them, borrowing money is to maintain a life of luxury, and they “never intend to repay the principal.” The Wang Youzeng case is an extreme example of this “dark logic.” On the eve of the collapse of the Liba Group, Wang Youzeng used companies under his control to fabricate fictitious business registrations and non-existent loans, amounting to as much as NT$800 million, which were quickly transferred overseas. He had served as a Central Standing Committee member of the Kuomintang and as an adviser on national policy. Using his deep political and business background, he played with leverage under the regulatory system. Ultimately, he left a massive amount of debt and the mess of bad finances within Taiwan, to be borne by Taiwan’s depositors and taxpayers, while he escaped to the United States.

This is precisely a representative case of generational plunder. When large enterprises collapse due to excessive expansion, the government often ends up using public resources—such as public bonds and treasury subsidies—to fill the gap as a last resort. This means using the next several decades of tax revenue from the younger generation to foot the bill for the previous generation’s failed speculation and malicious asset stripping.

The century-old government lie of “using debt to pay for debt”

Wang Hongbin notes that governments’ routine “legal overextension” pushes young people toward the abyss. Governments around the world—such as the United States, Japan, and the European Union—have long maintained an appearance of prosperity by financing it through borrowing. Taking the U.S. federal government as an example, for every 100 yuan it earns, 20 to 25 yuan must be used to repay interest—equivalent to directly confiscating resources that should have belonged to the next generation.

An even more severe social crisis lies in the full collapse of pension systems. The current pension system is built on three assumptions: “high interest rates, the demographic dividend, and shorter life expectancy.” Today, with population aging and low birth rates advancing in tandem, in order to fulfill the welfare promises made to the previous generation, the government has no choice but to raise the contribution rates of currently employed young people. However, it cannot guarantee that they will be able to receive money in the future. This “pay more, get nothing” super bubble, combined with the government’s long-term subsidies to specific capital owners funded by taxes from the entire population, causes resources to continuously shift from the hands of young workers to the pockets of the asset-owning class.

What young people can do for financial planning now

Rather than calling it passive resistance—lying flat in a situation where the previous generation at parents’ generation squandered money—young people can still plan for their own future. Wang Hongbin suggests that, in the current environment of global financial imbalance, soaring debt, and heightened geopolitical tensions, young people’s financial strategies should shift from the traditional “pursuit of high growth” toward living with risks in mind and not assuming that stable cash flow today will last forever. Young people should consider whether, if they don’t have a job for half a year to a year and lack cash flow, their current asset situation is enough to support their life. They should consider whether they can make do in extreme situations in which market liquidity suddenly dries up. When the stock market is at the height of a frenzy, they should consider reducing their investment allocation slightly. They should pay closer attention to where big-money funds are flowing—such as defense industries or AI—and invest within their means.

• This article is reprinted with permission from: Chain News
• Original title: Young generations who have had their parents spend all their money—are they wrong to lie flat?
• Original author: DW