What could happen if a generation of underemployed, underpaid, educated and indebted young adults become disillusioned by their elders’ financial mismanagement and seek to identify and punish those responsible?

Moody’s warns of 'social unrest’ as sovereign debt spirals: Britain and other countries with fast-rising government debts must steel themselves for a year in which “social and political cohesiveness” is tested.

 

In a sombre report on the outlook for next year, the credit rating agency raised the prospect that future tax rises and spending cuts could trigger social unrest in a range of countries from the developing to the developed world.

 

It said that in the coming years, evidence of social unrest and public tension may become just as important signs of whether a country will be able to adapt as traditional economic metrics.

 

Signaling that a fiscal crisis remains a possibility for a leading economy, it said that 2010 would be a “tumultuous year for sovereign debt issuers”.

 

It added that the sheer quantity of debt to be raised by Britain and other leading nations would increase the risk of investor fright.

 

Strikingly, however, it added that even if countries reached agreement on the depth of the cuts necessary to their budgets, they could face difficulties in carrying out the cuts.

 

 …“In those countries whose debt has increased significantly, and especially those whose debt has become unaffordable, the need to rein in deficits will test social cohesiveness. The test will be starker as growth disappoints and interest rates rise.”

 

…Greece, where the government has committed to drastic cuts in public expenditure, has suffered a series of riots over the past year which are thought to have been fuelled by economic pressures.

 

Edmund Conway

Telegraph, January 13, 2010