For many of us retirees, we're surviving. The problem is that instead of balancing our budgets with interest from savings, we're spending the principal. That's going to cut down small inheritances the middle class often got from parents and cut back on money spent on grandchildren, local economies, and housing equity (reverse mortgages). Meanwhile, younger generations have less incentive to save since there's no "power of compounding".
I don't understand how the middle class can recover, for at least the next two generations.
Good post. As a related problem, the government is deliberately understating the rate of inflation via various accounting tricks.
So seniors are not seeing their social security checks increasing nearly as fast as their grocery bills.
And that's the idea: together with the death tax, there is no private ownership - there is only The State.
The "power of compounding" still occurs. For those who invest regularly and use a dollar cost-averaging strategy, the recent slumps in the market represent a buying opportunity--the ability to but stocks, mutual funds, and ETFs at a discount. They're getting more shares for their money now, and the accumulation of shares is where the real "compounding" occurs.
The markets don't always go up.