Posted on 11/10/2005 1:22:46 PM PST by qam1
America should prepare for a big fat war between the generations. It’s going to be ugly.
On one side is the baby boom generation, which retires and claims a ton of government benefits. On the other are younger workers, forced to fund those benefits plus pay the bills their elders left them.
When the war comes, the Federal Reserve chairman will have to be a general. That person will likely be Bush nominee Ben Bernanke. The question is, for which side will he fight?
Outgoing Fed Chairman Alan Greenspan tried to represent both sides. He supported the Bush tax cuts.
This gave comfort to today’s taxpayers, who chose not to charge themselves for the wars in Afghanistan and Iraq, the new Medicare drug benefit and the quarter-billion-dollar bridge to nowhere.
Last spring, Greenspan did service for the other side. “I fear that we may have already committed more physical resources to the baby boom generation in its retirement years than our economy has the capacity to deliver,” he said.
One solution would be to ramp-up means-testing for Medicare, the health insurance plan for the elderly. Greenspan would reconfigure the program “to be relatively generous to the poor and stingy to the rich.”
The political reality is that the baby boom generation expects to see the nice government handouts its retired parents enjoyed, and then some. Younger workers expect to be taxed at today’s lower rates. One group will be very disappointed — or perhaps both groups — because there is no way the Candyland economics of today can go on.
The whole alarming future is nicely mapped out in a book, “The Coming Generational Storm,” by Boston University economist Laurence Kotlikoff and Scott Burns, a personal-finance columnist at The Dallas Morning News.
Kotlikoff and Burns clearly sympathize with younger Americans and Americans not yet born, who will be paying both our bills and their own. “Does it feel better,” the authors write, “if those unknown victims of our rapacity are someone else’s children and the children of those children and the children of those children of those children?”
Sounds like war to me. Kotlikoff and Burns try to be meticulously nonpartisan, but I won’t. Though the irresponsible policymaking spanned decades, today’s mad deficits rush us closer to disaster. Democrats are not shy about pushing for retiree benefits, but at least they consider raising taxes to pay for them. Not the current crowd, whose spend-and-borrow strategy is the 1919 Versailles Treaty of this-century America: an unstable setup that guarantees future conflict.
The scam is that the tax cuts are not really wiping the nation’s slate clean of tax obligations. When spending exceeds tax revenues, the difference must be borrowed. That debt does not disappear. It gets paid for, with interest, by someone’s taxes. So the Bush cuts simply move the taxes from one generation of shoulders to another.
Bernanke would certainly come to the Fed job with good credentials. Head of the president’s Council of Economic Advisers, he formerly chaired the Princeton economics department. Bernanke seems OK, but other candidates were more upfront about deficits.
One was Martin Feldstein, President Ronald Reagan’s top economic adviser. Feldstein drew flak for criticizing the Reagan deficits. The Bush White House wouldn’t want to hear that kind of thing. Anyway, there’s no need to worry about making ends meet when you can use the next generation’s credit card.
Another Republican contender for the Fed job was Larry Lindsey. He was fired as a Bush adviser in 2002, after predicting that the war in Iraq would cost up to $200 billion, a figure already passed. Lindsey did not understand: One simply does not talk price in the Bush administration.
Given the president’s tendency to give top jobs to those closest, we can give thanks that he did not nominate his banker brother. Neil Bush played a major role in the Silverado Savings & Loan fiasco of the 1980s, which cost taxpayers $1 billion.
Or perhaps the president was doing the big-brotherly thing in protecting Neil from a job sure to be filled with strife.
The person who heads the Fed in the next decade will be trying to steer the nation through the perfect economic storm. Good luck to the new chairman, and to all the generations.
Funny, alot of you guys say that. It's a nice excuse.
Cheers,
CSG
No kidding. I take nothing for granted anymore.
No just familial anecdotes... (and they think they are bragging)...
Cheers,
CSG
Excuse? You are a real peice of work, arn't you?
I served in the military. I see you have not answered if you did.
Problem is the way things is going it looks like those promises to military retirees is going to be broken sooner or later.
I suggest you take a look at my posts also...I am nearly a baby boomer, my husband spent 28+ yrs in the military, defending this country, we paid our taxes, bought our house and RV, with cash, not even chosing to have a mortgage...we have provided for our retirement, and are comfy in our retirement...we dont need your help, nor do we appreciate being told we are selfish...we never took help from anyone, dont intend to take help from anyone, raised our children to be industrious, and guess what?...all of our friends, have similar situations...
You might want to chose to believe that most Baby Boomers are the selfish, self centered, non caring people that you have tried to portray...you are way off the mark...
And, by the way, I took care of my dad in his home until just until a few days before the day he died..and after his death, moved my Alzheimer stricken mom with me and my family, and she lived with us for years until she died in my arms...tell me again, how selfish I, this baby boomer am...
I sure hope not. :-(
Not the ugly nurses threat! That's just cruel and unusual punishment. ;^)
After reading some of the posts on this thread, I can understand why some retirees are taking out reverse mortgages. They want to care for themselves and not depend on children and, at the same time, not worry about leaving anything to children who are selfish.
And its a shame, that the military promises you things when you sign up, and then renig on those things...
My husband loved being in the military...he said, one of the reasons he joined up, was because it was the best way he could find, to protect his family...
He finds it a sad, sorry state, when the military wont honor its committments to those who served...
I agree, its a real shame, when the army is all too happy to sign someone up, and that person serves 20+ yrs, and then that person finds out that what he was promised has been taken away...despicable way to treat the vets...
Nice non-answer. Which is it, safe and sound or out there?
I first saw it back in the 70s when they took away the GI bill for us Vietnam era vets.
I hope you don't misunderstand me, I thank you for your service, I just am around all too many who've been there and done that in name only. I welcome the chance to bury the hatchet and explain where I'm coming from via PM if you're interested FRiend.
Cheers,
CSG
Looks like the same 'home' where a lot of boomers have placed their babies.
Ain't abortion wonderful?
You mean, you were robbed, and it gives you the right to rob in turn. As for paying for my education, you most certainly did not.
BTW, if this is the attitude of your generation, I am bloody glad I never had any children.
No wonder you're so eager to rob me and mine. For some reason socialists usually turn out to be people who didn't provide properly for themselves. The guy who scrimps and saves isn't usually the one demanding that the government redistribute his savings.
And to think I busted my a$$ day and night to keep you free. Go figure.
Keep me free? Apparently, you did it with the expectation of robbing me. What's so noble about that? The noble guy keeps me free and then doesn't rob me. At least, that's my idea of noble, comrade.
Let's compare notes. I'm 49. I've worked 50 to 70 hour weeks since about 1980 when I moved from being an hourly worker to a salaried position. In the past 5 years my tax burden (FIT, SIT, FICA/MEDICAID) has ranged from $50,000 to $90,0000 annually. In spite of being raped by taxation, I've still paid off my primary residence free and clear. I used my 2005 income tax refunds to purchase another 2000 sq ft house as income property in February this year. My only other debt is two 4X4 vehicles to navigate the harsh winter weather in Idaho. Those will be paid off in 2 years. I'm still supporting two adult children.
I can't believe all the whining in this thread. I'm shouldering the burden of the New Deal, LBJ's Great Society and a new generation of underachievers and illegal immigrants. The damn socialist policies keep stealing more money. Trying to be a responsible individual that is prepared for retirement is difficult when you have to support multiple generations of slackers at the same time.
The real pain is going to start about 2016 when the boomers who were forced into defined contribution retirement plans are required by law to start taking distributions so the government can tax the retirement money. The forced distributions are going to clobber the stock and bond markets. The switch from lifelong careers that culminated in fully funded, defined benefits pensions to defined contribution plans with partial employer subsidy occurred just as I entered the workforce in 1976. I'm on the leading of the boomers who were left entirely to their own devices to find a means of funding retirement. The GenX crowd arrives just past that leading edge and is faced with the same problem.
I graduated from high school in 1973 and UCSD in 1976. I've been employed full time since June 1976 (including a year of graduate school through June 1977).
Safe and sound IMHO.
For me I will tell one story of what happened "out there". I was in TAC with an F4 unit somewhere in Europe during an alert. We were deployed from our regular location. Quck turnaround on a Jet engine pull. Witnessed first hand a GE-79J fall onto an A1C. (Hoist mount broke) Not a hope surviving that. I knew her personally. That sight still haunts my memories. :-(
Ours has always been a military family, on both my husband and my side...my great grandfather served with the Army Cavalry at Ft Yates, ND...he was a horse soldier...his son, my grandfather, fought in WW1...his son, my dad, fought in WW11...my hubbys dad landed on Normandy, watched his fellow army buddies blown to bits, while he somehow survived, my hubbys uncle was in the navy in the Pacific during WW11, another uncle served in Korea...and my own hubby served in the army for 28yrs...all good proud men, who served in the military, and risked their lives, and believed that they were defending Freedom and America...
To take away from these men, what they might have been promised, would make all of them roll over in their graves...
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