This is an interesting chapter to read, in part because it is so full of data and in part because reading about the fiscal/demographic mess in Europe makes me feel happier to be an American.

As one reads the chapter, it becomes clear that it is built on a huge base of data and analysis. Thousands of person-hours went into analyzing micro data and producing the generational accounts for each country that are summarized here. As in Chapter 5, by Jonathan Gruber and David Wise, the author of this chapter expended great effort in enforcing uniformity in the construction of individual country accounts, and we readers are able to reap the benefits.

I will begin by quickly reviewing the idea of generational accounts, before turning to some issues in their interpretation. The starting point for the analysis is to think about an individual's fiscal dealings with the government over the course of her life. The taxes that she pays and the transfers that she receives are the relatively easy flows to measure. An immediate complication arises, however, over how to deal with government spending other than transfers – in other words, with purchases. The approach taken here is to divide these purchases evenly over the entire population (i.e., not to try to allocate purchases by different age groups). Thus in this chapter, “transfers” include all government spending.