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.
Did you have to wind the dang thing up before you played the plastic disks? If you did you're older than me.
Why didn't we simply just say, "we are going to stop the Communists and therefore will smash the Viet Cong?"
LBJ was a typical conflicted liberal. He couldn't think straight. A straight thinker would have PR'd it with the sentence I wrote up above.
One of my biggest problems is repeating myself.
They drugs they give me help with that.
By 2015 our house will have been paid off for a few years and well have moved the cash flow we used to pay the mortgage into buying raw land with cold cash.
Farmers don't get a pass on having to compete. If one farmer can grow a crop more cost effectively than another, that farmer will prevail at the market...assuming each creates a product of equivalent quality and value. The less skilled, less efficient farmers will go out of business and be replaced by those who can do a better job.
The government sticks its nose and our tax money into agriculture all too often. Part of that is a consequence of our tremendous capacity to produce food that we export around the world. Just 50 years ago we expected seasonal variation in food availability. Today, there is cooperation between northern and southern hemispheres that provide a nearly continuous supply of foods that were once only available in the summer.
Frankly I buy from the farmer who sells his good from the corner of the local swap meat or farmer's market...
It's your money to spend as you see fit. It's a good thing that you don't have any desire for bananas or other tropical fruits. The local farmer isn't growing those items.
Seniors.
Thanks for reminding me. That's another problem I have.
You make some valid points, although I think the small business owner farmer should be able to compete it today's market. Organic foods should be available and affordable rather than Mass produced chemical driven meats and vegetables but that is not the case.
IMHO that is why we have an obese problem, it's so inexpensive to eat unhealthy processed foods, yet to eat healthy is not affordable to many households.
Thanks for reminding me. That's another problem I have.
Yeah, about 100 years from now .... maybe!
That is a sad commentary on what has become of the educational system. BTW, cows and bulls ARE the same species. They are female and male representatives and their ability to mate and produce viable, fertile offspring is a hallmark of the very definition of the word species. A horse and a donkey are different species. They mate and produce a viable, infertile offspring called a mule.
I was able to name all the bones, internal organs and muscle groups in a human in 3rd grade. It helped that my parents purchased a set of World Book encyclopedia when I was 4 years old. At that same point in my life, I was able to read and understand electronic schematics. The school library shelves were full of books on electroncs and I read every one I could find starting in 2nd grade.
I commend you for your efforts to lead the clueless to new fountains of learning. Many people really want to learn and have been stifled by the poor education system. I realized just how little I really knew on graduation day at UCSD. What I really learned was how to learn about anything that caught my interest. The college education provided a great foundation in science, mathemetics, literature, history, foreign language and even martial arts. Still, that is just a microcosm of the things that are available to learn.
I taught school in the evenings from 1980 to 1983. The class was co-sponsored by the Regional Occupational Program and Southwestern College. Students working on an AS in Electronics took the class as Electronics 51. ROP students took it as Electronics 91. Over that 3 1/2 year period, the ROP office reports 91% of my students were hired by DEC or IBM. In May 1983 I accepted a new position inside PacBell that required 7x24 coverage of the data center at Trade Street in San Diego. Those obligations made it impossible to continue teaching school in the evening. It was fun while it lasted.
And that was *The Great Divide* for our country....
My older brother graduated from High School in 1970, by this time we all knew this was a bogus war we had no business in. As patriotic my family was, there was no way they wanted him over there.
I am not sure why he ended up not going in but he had his draft card and I think had a high number...
You did seem to be bitter about my RVing during my retirement...why?...I raised my children to realize that they must take care of themselves, not rely on any govt. program, like SS to be there, and plan ahead for that...and that is exactly what my younger son(my older boy has died)is doing, and will continue to do...he is providing for his own retirement, and already at age 31, has a huge nest egg, already built up...he will never ever rely on any govt program...
You would begrude me and my husband the ability to collect back the social security money we paid in?...is that exactly what you want?...
My husband and I both began working when we were 16, and except when I stayed home to raise our boys, we both worked up until just recently...and often, we held more than one job.....and we are in our 60s now...so, you do seem to be really upset, that we dare to enjoy our retirement...tell me what exactly you think we should do...work until we drop dead?...refuse the SS payments, even tho we paid in for 40+ yrs? Please, do tell me, what you think we should do?
And yes, you certainly do seem to be devaluing my husbands military service, because now your husband has to put in maybe longer hours than my husband did...is that what it has come to?...pointing fingers, and saying well, my husband put in my hours than your husband, so there.....well, I am sure that there are those, military and civilian, who put in more time than your hubby..so what?of course, being in the military is hard, and always, always has been...field problems, TDY, combat, frequent moves, mom has to often function as both mom and dad, because the military and its needs come first, does not even begin to scratch the surface...so what?...every military family has to adjust to this, its just a fact of life in the military...
And I never called GenXers or any other generation lazy...I think that is just stupid.....because I know and realize, as should everyone here, that there are lazy, no good bums in every generation, and there are the good in every generation...
Pardon me, if I and my hubby enjoy our retirement RVing..
Good citation on the paper. That's one of the things I really like about threads on FR. Most of us are well educated and capable of tracking down supporting information for assertions we make in our commentary. This thread has clearly touched off some hot debate.
One issue omitted from the cited paper was discussion of pulling the caps off social security. Right now the FICA tax is assessed against all earnings upto just over $89000. Some lefties have suggested taking the cap off completely. That approach doesn't solve the problem. With the current cap and expected rates of retirement, the income and obligations are equal in 2018. Taking the cap off delays this date until 2024. Big deal. That is no solution.
The current cap does have some benefits to the economy. In my case, it means the SS taxes stop getting collected in September. It is money I have available to put back into the economy during the Christmas season.
Entitlement is unattactive wherever it is found. Perhaps it is time for Grandma to sell her house and pay for her own damed drugs.
Yet our guys were not being sent back home until 1973.
When was the Tet Offensive? I thought that was 1970?
I know most think that it was the *lefty* Anti-War protestors that were causing the problemsour country was having, but I do not agree.
They were responsible for treating our Veterans bad that is for sure, but many Conservative Republicans were totally against our involvment over there.
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