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.
Yup. My "free" time is Sunday afternoon. I get to spend 2 1/2 hours mowing the lawn at my residence, then I pack up the mower and take it to my rental property and spend another 2 hours mowing that one. When that is complete, it is time to wash clothes, do the weekly grocery shopping and any other domestic tasks. My wife and I get this stuff done as quickly as possible so we have a little time together. On average we get to eat TWO meals togethers each week when I'm not out of town.
Nice try, using 2000. Why didn't you use 1992 and 1996? You almost tricked me. But you did not. Try again.
RE: It is a program that just needs to be ended.
Yes, yes! I agree 100%
No problem man, this is a very hot topic!
Again you have a brush that is too broad. Some people getting ready to retire are well off. Some never achieved squat in a lifetime. There is a broad distribution. I'm somewhere in the middle. The people who spent every penny they earned, accrued mountains of credit card debt and never contributed a dime to retirement are common and found in all generations. They expect a social security check will help them subsist with cans of dog food after a bankruptcy screws all their creditors. They deserve the consequences. Some people made exemplary efforts to save for retirement, but will be victims of criminal negligence of companies like WorldCom. Some worked for big companies like GM and Delta that made promises pay defined benefit pensions, but have discovered the unbounded financial obligations are impossible to sustain.
I suspect less than 10% of people actually have a sound financial plan that will survive the coming crash in the post 2015 time frame. Most are mired in mortgage and consumer credit debt and have little in savings for retirement. Even the apparently 'well off' are often living beyond their means. They regard SS as the 'safety net' that was promised and that they finance on every single paycheck. It is a product of ignorance. Politicians are thieves. Everyone is forced to pay for the big lie on each paycheck. As with every Ponzi scheme, the early players reap a benefit. The late players just pay the price and never see a benefit. I'm one of those late players. I will be assessed the maximum for the rest of my working life and never expect to see a dime of it returned.
I think NRST is a red herring. It would immediately devalue my after tax savings by at least 23%. The NRST includes a significant income stream derived by the government paying NRST on governnment purchases. Where does the government get money? From NRST? Oops. A cow sucking on its own udder. That is a real big hole in the purported revenue stream. Not to worry. The politicians will find some means of recovering that money by expanding the scope of what NRST can tax. Your monthly rent. Your 'imputed' rental income from living on your own property instead of renting to someone else. The end result is the same. Enormous amounts of your labor will be taxed to fund all the good deeds that policians must do to get elected.
Call your HR department. Find out how many hours of unused paid vacation you have EARNED. You only get what YOU earned. You have no claim on the earned income of another person...unless you subscribe to socialism.
The number of hungry mouths has far exceeded the capacity of subsistence farming. If we returned to the farming methods of the early 1900s there would be mass starvation around the world.
What was produced by a man's hands is now produced by technology, so are we truly better off?
Do you own a car? A TV set? A computer? All of those things are well beyond the capacity of a single man to produce. We depend upon an economy where division of labor and skills multiplies our abundance. Zimbabwe is trying your approach right now. The 20,000 white farmers who fed a nation of 13 million people and generated sufficient surplus to sell to nearby countries were run off their land and many were killed. What is left is subsistence farming by people who have no clue and a nation people starving.
The demographics are there for multiple elections. Read the column labels. Nobody is "tricking" you.
And the most fascinating post to FR, of course. :-)
Yes..and how many Farmers have been put out of business by Mass production? Government policy in regards to farming?
Frankly I buy from the farmer who sells his good from the corner of the local swap meat or farmer's market...
and Gen X women have good things to look forward to themselves in being *Fascinating* when they reach that Middle Age era...:)
You are not going to stop women who are determined to kill their children .. Just like we can't stop people from killing themselves.
But today abortion is not private. It has invaded our culture and our family life through the foggy and unlogical opinions of a few black robed men.
Planned Parenthood wants to be able to perform secret abortions on our minor children - need I say more?
Today we involve and use licensed medical personnel, force abortion practices on those who morally are opposed to it in hospitals, pharmacies, and use our tax dollars to do so.
Condemning to death a whole class of human beings will eventually condemn us all. Watching a young disabled woman
forced to die of thirst on TV this spring should be a WAKE UP call for us all.
Who got arrested in that case? Young children trying to bring her a drink of water.
I geel ABORTION on demand is wrong ABSOLOUTELY, however I feel abortion does warrant some cases as in rape incest, danger in health to the mother...
I personally would want to die rather than live like a vegetable...
"Women look and feel great now in there 40's and 50's and are productive fascinating women now..."
Yep. Technology sucks!
Thanks for the feedback. I must have read to much into the initial comment that prompted my first reply. I think we have the same impression.
Technology on demand by boomers...
Once our generation is in power. We will simply repeal all of these Social programs for the elderly they enacted...
They have more votes than you do.
I was citing this paper...
Lets get the numbers right.
The point is the same. The load will be too great for the younger generations to bear.
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