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.
I WAS LIVID...So, I and everyone else has to pay for her medication so she can have buy things for her grandkids? What is wrong with this Country?
It is an honor to know you.
I told my grandparents (who raised me) to spend it all. I don't need it.
On the individual level, that's true. If you check you'll see I've written a lot about that. On a political level, however, the relevance of the case to the husband's supporters was that their own ability to do the same to their aged family members that they'd rather not support. And who has controlled the government and set the policy that allowed Terri Schiavo to be starved? Boomers, both Dem AND GOP. Boomers have had overwhelming political influence because of the relative size of that generation to the ones prior and following, and at some point they will be accountable for the choices that they made. It's too bad for the ones among them who were trying to do the right thing, but I would guess few of them would be left helpless when Social Security and Medicare are abolished.
You think I like paying SS? I will get back far less than I have ever paid in.
BTW, slick use of ad-hominem.
I am very well educated. Thanks for noticing.
Our years worked are nearly comparable. Started in 78 doing my max with a work permit (after all, I was only 16) and then had my own business I operated producing equipment for the semiconductor industry. Hours per week I've got you beat. 70 *solid* since the early 80s. I think most on this thread want to end Social Security so what's your freakin' beef, pal?
I have a new team member on my software development team. He is two months younger than my middle son (22). A very sharp CS grad. It will take a couple years of mentoring to make him ready to take on the level of responsibilities that the "old farts" in the group have been doing for the last 30 years. He is certainly up to the task. My 22 year old son just took his real estate broker's license exam yesterday. He was enroute to the county recorder's office this afternoon to file his fictitious business license forms in preparing for launching his own real estate office. As a real estate salesman he closed over 100 properties in the last year and ran the whole office operation.
I plan to be working for another 20 years. That will put me at age 69. By that time I should have another 2 or 3 houses fully paid off and be in a position to live comfortably on the cash flow from my rentals.
I'm afraid your co-generationists have already spent that AND your childrens' future as well. They're working on the second generation. There's nowhere to recoup it from, except from those not yet born. And since the boomers wielded the political power that put the folks in office to make it so, it's your peers that own the blame.
I want to know how folks are blaming boomers for everything from the 60's to the next 20 years? Thats one hell of a generation.
V/R,
CSG
I have sympathy for many in my generation and maybe yours who are squeezed by adult children returning home (with grandchildren, quite often) and at the same time trying to care for aging parents.
Social Security was a Ponzi scheme from the time it was instituted. People who had NEVER paid a penny into it, were given SS the minute it was passed into being. And everyone who worked, from the time SS came into being, paid into it. So just what, exactly, are you saying? Something like : TOUGH TOENAILS, YOU PAID INTO IT, BUT I REFUSE TO ?
If that is so, how are you going to keep from paying into it' as it all stands now? If it's legal, you should tell us all how to do so.
Ain't we? LOL!
No. I paid in good faith that I would get my money back (forced BTW).
You just said you weren't robbed, but you did pay because you were forced to. You appear not to realize that "paying under duress" is the definition of "being robbed". As for getting your money back, I fully support that. But you won't find the stolen money at my house! I have the perfect alibi; namely, that I wasn't born when you were robbed. Go reclaim your stolen money from the ones that stole it. Don't rob me and pretend that's a "repayment".
I put 20% of my pay away for the future. I don't rely one bit on SS or any other Gov dole.
Oh. You gave me the distinct impression you were planning to collect SS checks, with full knowledge that it consists of funds forcibly taken from me.
Bet I pay more in taxes than you make.
I believe I'll take that bet. Unless a radio astronomer makes well over a quarter million a year, my income exceeds your tax bill.
Comrade? I stood the front line fighting communism
Apparently, you lost. You returned to the land of the free thinking that my private property was rightfully yours, and calling me a whiner when I object. If you tried that angle back in 1780, you'd have been tarred, feathered and ridden out of town on a rail.
Yeah, I imagine the incident crosses your mind regularly.
I do get it: I'm telling you it's a load of crap. I was born and raised poor, and paid my own way through college, including a bachelor's at Brown and a PhD at Syracuse.
They had to work by the sweat of there brow!
You seem to be thoroughly convinced of Marx's value theory of labor--that only sweat equals genuine labor. That's also nonsense.
It's good that you've provided for your own retirement responsibly. So, do you support Social Security, Medicare, and the prescription-drug benefit (in current or "reformed" version)? Or would you rather them abolished?
If you support any of those things then you support stealing from the generations that follow. If you don't, then good! Glad to have you on the side of just and correct behavior. But don't delude yourself into thinking that theft from following generations is not overwhelmingly supported by your generation.
Of course all generalizations have exceptions, and I'm sure the folks here who have objected to what I have said are mostly among the exceptions. But the reality is that 80%+ of baby boomers have no problem with using their politial power to have the government seize by force the property of post-boomers in order to fund easy boomer retirements.
I would add that they aborted over 40 million of our generation as well, which would be around to help share society's burdens if the Baby Boomer's weren't so selfish.
Do you mind sharing your age?
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