The coming Economic Crisis that isn't being talked about.

[Silverhair]

There is a great crisis coming in the next few years in the economy, that neither the Dems or the Reps are saying much about.

THE RETIREMENT OF THE BABY BOOMERS.

In the early 90's the boomers began to enter their peak productive year. The leading edge of the boomers were in their mid 40's at the beginning of the 90's. That's when their kids start to leave home and they begin to really get traction in their careers. The boomers produce far more than they consume, at present. The economy boomed, and is still basically roaring.

But in 2006, the oldest of the boomers will turn 60. Some will start to retire, but most will work a little longer. By 2016, the wave of retirement will be surging.

That means hordes of people coming out of productive labor and become net consumers instead of net producers. Neither Republican nor Democrat can change that demographic.

It's gonna be a rough depression when it hits.

[K-W]

1. It is among the many many bad things ahead for our economy.

Even if dems take control we may see the ultimate death of liberalism. The question is will we tend towards facism on the way down. We managed to avoid it during the last major US economic collapse.

[0rganism]

2. This is one of bush's excuses for putting the migrants on Social Security

Funny how an otherwise insane economic policy can twist its instigators into supporting a nominally liberal idea, like amnesty and benefits for "undocumented" workers, just to keep the boat floating.

[LunaC]

3. And just wait until they find out

that there's no money in their pension funds.

[Silverhair]

4. All pension funds are jokes anyway.

A pension fund is nothing more than a loan to the younger generation to be repaid when the older one retires. When you quite being a net producer, you become a net consumer. If enough people do this, and due to the huge numbers of the boomers, there will be enough, then net production drops. The drop in net production lowers the value of the pensions.

Also, those pensions, even if every one was intact, are not cash sitting in a box somewhere. (That's one reason I hated Gore's "lockbox" analogy. It just wasn't correct.) Those funds are invested, and when the cash is needed, the investments are liquidated by being sold. When many of them are sold at the same time, the value of the investments drops. The amount of funds in the pensions drops dramaticaly.

The pension funds were always a joke, even without the monkeyshines.

[Nederland]

23. Wrong

You are not describing pension funds. What you are describing is the Social Security system where the government "buys" bonds from itself. A pension fund is not a loan, it is a collection of stocks and bonds with a tangible value.

[Silverhair]

27. Same difference.

When the time comes to sell those stocks to be able to buy groceries, where does the money to buy the stocks come from? It comes from current net surplus production from those that are net producers. That's the same place that social security comes from. So there is no real difference in terms of economic impact.

The net consumers are ALWAYS supported by the excess production of the net producers. There is no economic scheme that can change that reality.

[Nederland]

28. Big Difference

If you don't understand the difference between a loan for ten dollars and a share of stock worth ten dollars this discussion is pointless.

[Dissenting_Prole]

24. And wait 'til

they retire and try to cash in on their mutual fund investments all at once. Can you hear that giant sucking sound like the last few drops of a McDonald's milkshake?

"Sorry sir, your investment wasn't based on anything really, and it's gone. We do, however, have some Parmalat stocks if you want some of those."

[SlavesandBulldozers]

5. we are just going to have to come up

with some form of very humane euthanasia for all of you old folks. ;)

oh, and by the way, enjoy your driver's licenses while you still have them - because by the time you turn 70 we are going to kick down your doors and take them from you one by one - lest we die under your tires while you slober and moan.

In all seriousness though, we will figure out a way to accomodate this transition. There are some advantages to a major departure of vast amounts of productive labor, and some advantages to having a vast population of net consumers. This is just baby-boomers feeling that the world cannot operate without their rugged work-ethic.

Another thing, dont forget to pick up some Polident stock - through the ROOF! :evilgrin:

[Lost4words]

6. 20 year old males are a much higher risk on the road!

check the stats, please send in your drivers lic today and wipe your nose. If you live long enough, you will get some real eye openers.

I hope you make it.

Dont feel bad most of us thought we knew what the hell we were talking about at 22 also. Your day will come. Wipe your nose.

On your thoughts on the economy, HA HA HAHAHAHAHAH, Baw Hahahahahah

have another Zima.

[0007]

8. Humane Euthanasia should have been here long ago -

Those four horses, the White a Red a Black and a Pale (as in pallid) are galloping faster than the great Seabiscuit. junior is riding the Red horse. Need I say more.....?

[havocmom]

10. Some of us have expected euthanasia for a long time

When we were younger, it was youth-in-asia and many of us figured out then that we were just expendable cogs to the machine making the rich richer.

As we age and lose the energy to plod along in the work force, knowing retirement pensions are illusion (think ENRON) many of us know the answer will come in an overdose or some similar instrument.

But some of us may just surprise some people. If you are destitute, not healthy and facing only a downward spiral which ends with the loss of any automomy and dignity you may still posses, you can become dangerous.
Boomers may produce a movement to make the grey panthers look like kittens.

When there is nothing to lose by a large chunk of any population, there are interesting times ahead for that society.

[tom_paine]

19. You just said a mouthful, havocmom

When there is nothing to lose by a large chunk of any population, there are interesting times ahead for that society.

I think that applies to ALL demographics except Imperial Aristocracy.

I would also add:

When a society loses the ability to change itself peacfully, violent solutions ebgin to "present themselves"

The simple fact that the Busheviks are dismantling the checks and balances, creating a Sovietized Media, and securing for themselves and their descendants unchecked hegemonic power, makes it all the more liekly.

Imperial Amerika in 2050 will mostlikely be a very ugly place.

[ayeshahaqqiqa]

7. You just figured this out?

I could see this coming in 1972, when I graduated from college. I realized then that there would be no pension money for my generation. That's one reason why I live in the Ozarks, heat with wood, plant a garden, and have very few expenses.

The thing that will make the economy worse are the mean-spirited fiscal policies of Bush & Co. It has been quite obvious for some time that they know economic collapse is coming, and that it is imperative that their fat-cat Big Business friends grab as much as they can before everything falls.

Here's a quote from Krugman's op-ed piece in the Times today that I think you'll find amusing:

"Facing a record budget deficit, Bush administration officials say they have drafted an election-year budget that will rein in the growth of domestic spending without alienating politically influential constituencies." Needless to say, the proposed spending cuts — focused only on the powerless — are both cruel and trivial.

Sort of sums up the Shrub, doesn't it?

Link to complete op-ed piece:
http://www.nytimes.com/2004/01/06/opinion/06KRUG.html?th

[0007]

9. Do have a nuclear winter figured out?

I certainly hope so! Perhaps euthanasia may be humane compared to suffering from radiation with nothing but cold and nothing to eat.

[Silverhair]

12. I only started posting here two months ago. I too have known

this for a long time. I find the title of your post personally insulting and see no reason for the attack.

[jmcgowanjm]

15. I wonder if we've floated the Buffalo at the same time ayeshahaqqiqa

I love Newton County.

Wish I could afford to live there.

BTW-Watch Parmalat.

[cthrumatrix]

11. A report by Paul O'Neil (Fired !) - $44 Trillion Gap (rev vs expenses)

SPECIAL REPORT ON THE U.S. ECONOMY
The $44 Trillion Abyss
The baby-boomers are about to retire, and it's going to cost us—big. Here's what the government doesn't want you to know.
By Anna Bernasek


Last fall Paul O'Neill, then Secretary of the Treasury, wanted a simple answer to a thorny question: How prepared was the nation today to pay all its future bills? Two government experts worked for months to calculate the answer. Their findings, which shocked even them, were never published—the Bush administration made sure of that. The reason for the silence was that by the time the two researchers had completed their study, O'Neill had been thrown out of the Treasury and replaced by the more politically astute John Snow. No savvy administration power player would dare point out, right in the middle of tax-cut season, that there was a huge hole in the country's finances—a $44 trillion hole.

That's the kind of Washington tactic that makes Larry Kotlikoff angry. So angry, in fact, that the normally composed and carefully spoken academic starts ranting about a government conspiracy to keep us all in the dark. He even refers to this particular episode as "the great Treasury cover-up." And once you start Kotlikoff on the subject, it's hard to stop him. "I hate politicians," he says, without pausing for breath. "These people are so... Continue

http://www.fortune.com/fortune/investing/articles/0,15114,538789,00.html

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another review

White House Shelved 44 Trillion Deficit Report?
By Peronet Despeignes of the Financial Times
May 30, 2003, 10:21



Thursday 29 May 2003

Study commissioned by O’Neill sees $44 trillion in red ink

The Bush administration has shelved a report commissioned by the Treasury that shows the U.S. currently faces a future of chronic federal budget deficits totaling at least $44 trillion in current U.S. dollars.

The study, the most comprehensive assessment of how the U.S. government is at risk of being overwhelmed by the “baby boom” generation’s future healthcare and retirement costs, was commissioned by then-Treasury secretary Paul O’Neill.

But the Bush administration chose to keep the findings out of the annual budget report for fiscal year 2004, published in February, as the White House campaigned for a tax-cut package that critics claim will expand future deficits.

The study asserts that sharp tax increases, massive spending cuts or a painful mix of both are unavoidable if the U.S. is to meet benefit promises to future generations. It estimates that closing the gap would require the equivalent of an immediate and permanent 66 percent across-the-board income tax increase.

snip

http://www.chewinthefat.com/artman/publish/article_271.shtml
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AND the actual Federal Reserve Report Documenting the $44 Trillion!

http://www.ngiweb.com/FiscalReport.pdf

---------------------------------------------------------------------

This is a "ticking timebomb" that our government is avoiding. I listened to a one hour review of this issue today on the Financialsence.com saturday interview take a listen:

http://www.netcastdaily.com/fsnewshour.htm (the interview with Laurence Kotlikoff)

[KoKo]

14. cthrumatrix, thanks for the links on this. I've bookmarked to go through

later. A must read for many of us!

[salin]

26. I just read that O'Niel is about to release a book -

the first insider critic book from any former white house insiders. reports are that it is pretty scathing. Of course O'Niel has his own warped view of reality - he believes that there should be no medicare nor social security because even people on minimum wage should be able to save enough for retirement on their own. :crazy:

[greendog]

13. Does everyone remember the economic crisis created by the expense....

....of raising and educating all those boomer kids. As I recall it was done in a nation of one income families....along with the expense of the Vietnam war and the cold war....and somehow we had enough money left over to build the interstate highway system.

We could afford it once.....we'll be able to afford it again.

[Tansy_Gold]

16. Being "able" to do it is one thing.

Being wise enough -- and compassionate enough -- to actually do it is another.

As one boomer (1948) married to another (1946), I remember the 1950s and the attitudes that prevailed in working class and new middle class families, as well as the government. There was an attitude, part of which was driven by the corporate mentality of turning all that war production capacity into consumer products capacity, that everyone could do better financially, socially, etc.

As a nation, as an economic apparatus, we could do the same thing again today, except that so much of the fuel for the engine driving that apparatus has been removed from the tank. The wealth that was being recycled into the American economy in the post-WW2 boom (and which, in effect, helped spur the nation into Vietnam) is no longer being cycled; it's being sucked out, and primarily being sucked out of the middle and working classes, not to mention the poor.

All the post-FDR social programs -- from social security, medicare, medicaid, Head Start, etc. -- are under attack one way or another. The GI bill that allowed so many working class GIs to go to college is being decimated (as well as keeping down the numbers of those eligible for such benefits via privatization, and thus the working and middle classes are steadily being denied access to the tools that would help them keep afloat. As wealth is concentrated in the hands of a few, the rest simply can't get at it, no way, no how.

Well, except through revolution.

Personally, I see little chance of the boomers retiring en masse. Many of them won't be able to afford to retire; they'll take their social security pittance (if it survives) and whatever savings and pension they may have (if they survive) and continue working at whatever jobs they can find, well past the so-called golden years. They'll sell their homes to finance their nursing home came, and those homes will go for peanuts in a glutted market. And the only ones able to buy them will be the uber-rich, who have been slowly sucking all the wealth up anyway.

The days of middle-class retirement communities like Sun City Arizona and its clones around the country will fade away, because too many people of that age will still be struggling to make ends meet; they won't be able to afford the leisure lifestyle.

Can such a trend be stopped? Sure. We're "able" to do just about anything. But will it be stopped?

Will * and his merry band of neo-aristos be stopped?

That, my friends, is the real question,

as asked by

Tansy Gold

[greendog]

17. Great post!

Personally, I'll bet on the revolution. I'm an optimist.

[Tansy_Gold]

20. Optimism = revolution

Thanks for the compliment, GreenDog!

Unless there is a peaceful overturning of the present regime via the November election, and I am not as optimistic as I would like to be about that, I do sincerely believe that the only other hope is revolution. And frankly, I'm much more optimistic about that as a long-term and more permanent solution than I am about November.

Even if a Dem is allowed to win in November, there will still be a strong and viable repuke opposition. They will have the means, and the motive, to regroup. Just as they emerged from the Clinton years stronger and meaner than in 1988, they will be utterly unmerciful if * is ousted this year. If they foment revolution, it will be extremely ugly. If we do, it will just be ugly.

Such a thing to be optimistic about. . . .

[IrateCitizen]

21. At the opposite end of the "degrees of ugly" perspective...

Even if a Dem is allowed to win in November, there will still be a strong and viable repuke opposition.

I'd say that even if a Dem manages to win in November -- even if the Democratic Party retook both houses of Congress -- they STILL won't be willing to make the painful decisions that will be necessary to get us to the point where we have a truly sustainable economy.

It will be the equivalent of going from barrelling off a cliff at 110 mph to slowing down to a more reasonable 55. In either instance, you're STILL going off the cliff in the end -- it just takes a little bit longer and gives the illusion of safety going at 55.

[Tansy_Gold]

25. No argument from me, IC

In my more pragmatic mood -- which is my dominant state of mind -- I agree with you completely. But I was in a rare optimism.

Most of the time I do think we're headed for the cliff, and no matter what speed we're going at the time, the rate of acceleration after the fall is uncontrollable.

[tom_paine]

18. So many things are forbidden for discussion on TV

This is one of them.

Sigh. Remember when America was a Free Nation, not this pathetic Empire living off the fumes of former glories and respect.

When the Empire is finished transforming into what it will become, this pleasant twlight where denial is possible will be a distant memory of "The Good Old Days".

Yes, these are the "Good Old Days" unless by some miracle the checks and balances of the Old Republic can be restored (not to mention a Free Press).

Not likely, I'm sorry to say. Those institutions are fading and on life support.

[Nederland]

22. Manufactured Crisis

The Social Security crisis is being manufactured by Wall Street types that want to convince the American people that the only way to save Social Security is to privatise the system. In truth, there is no Social Security crisis. The numbers that are used to illustrate that the system is doomed assume an annual growth rate of 1.7%--about half the average this country has seen over the 60 years. Don't buy into this Wall Street bunk! The system is fine.