That was once the the third last part of the American Dream.
IMHO, the retired boomers will pinch pennies like we've never seen....that in of itself is something economic forecasters (Wall Street) have not added to the equation, in fact the opposite has been their norm.
Inflation will come very soon because of asinine goobermint spending and we will see another 10-20% decline in discretionary spending habits of the US populace. Wages too will remain stagnant at best as I am hearing that blue collar pay has dropped.
Exactly. Besides dying and leaving millions of properties that no one wants, inability to spend, and penny-pinching regardless, will severely contract discretionary spending --- the engine of the real economy.
However, there's another way unemployment + boomers is effecting the economy right now. Unemployment numbers do NOT count the number of people (mostly boomers) who in the last years finally opted for EARLY RETIREMENT, including AGE 62 ENROLLMENT IN SOCIAL SECURITY ("early" enrollment) because they could not get or keep their jobs.
Early enrollment in Social Security has skyrocketed! Functionally (their effect on the economy right now), these SS payments are the same as a never-ending unemployment benefit.
They affect the economy by drawing out present dollars for payout. Moreover, this means that boomers, who not only would not have draw out of the SS fund for a few years, are also not paying in for the next years, as they otherwise would have if they'd been employed.
At the same time, they are coming into their years of potentially high medical expenses, much of which now will be paid by the government.
Every discussion of unemployment needs to include figures on early enrollment in Social Security over the last year or so.
Man, you are so right on this point as well! And no one seems to reflect on the fact that the discretionary consumer spending, ESPECIALLY BY BOOMERS, likely is PERMANENTLY contracted.
Look, many boomers have about everything they need, and many have led a somewhat affluent lifestyle to the point that it doesn't even really matter to them if they can't go out to dinner so often or go on cruises, whatever.
What I'm saying is that the psychology of penny-pinching is quite different in this group and this time around. When you bought a pair of shoes because they were the new style, a getting to be senior has no problem "adjusting" to not buying new styles and instead wearing one of the many pairs of shoes in the closet.
I'm not particularly wealthy, but I think I literally could go a decade or more just wearing out the stuff I have, without buying much of anything else. In fact, I can't wait to start getting rid of much of the stuff that's been accumulating!
When financial shock is coupled with the lack of true *need* for buying much of anything --- has the world economy ever seen such a combination?
IMO, I’ve never seen retirees as a very big spending group. What do they spend?
They travel a bit here and there. They eat out some, but it tends to be lower end or moderate & at senior discount prices. The whole reason to offer senior discounts is because senior’s don’t tend to eat out very often.
Seniors don’t commute to work so they don’t drive much, and their low wear cars last much longer than when they were working.
They rarely buy clothes beyond replacing worn items at Walmart or KMart, and at that men will wear worn items until they are falling off.
They generally have a paid-for home, so they are not driving the mortgage market.
They don’t tend to embrace new technology so they get by just fine with their old 19-inch TVs, no ipods, no laptops, etc... They consume way less food as they age.
OK, they crank up the furnace a bit more in the winter and run the AC all summer, so they do use a bit more energy than when they were younger.
I just don’t see senior citizens as a big consumer group driving the economy. They cause massive medical spending. Beyond that, I just don’t see senior citizens as the consumption engine that was the 70% of GDP of late. They are not big buyers or consumers. Not that I have seen, so penny-pinching seniors aren’t going to have much impact on the economy. It is the people in their prime earning years who want a move-up home and a cabin by the lake, want a Lexus, decide to send their kids to an expensive private college or a dirt cheap junior college for 2 years instead.
I see these people driving the economy, not senior citizens. What am I missing?