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.
Yes it will get ugly. In addition to what is noted here, are the following additional considerations. By and large, the Chuckie Schumer, Bahbwa Bock-suh, Dick "H" Durban branch of extreme quasi Communistic "liberalism" is endemic to the Boomers. Certainly, there are factions of it in other generations, but the Boomers are the primary breeding ground. Meanwhile, again, from a broad brush stroke perspective, the current breeding ground of all other polity is essentially other generations besides the Boomers. So, something like 20 years from now, the population will be a skewed distribution skewed toward a set of old, cranky, government beneficiary, fixed or slowly growing income, Leftist Boomers. The rest of us will be overtaxed, increasginly resentful, too busy to politically organize and lobby, Right thinking people in the prime of life. Either this thing will break politically sometime before 20 years from now, or, somewhat later than 20 years from now when the peak of the Boomers start to die out, it will begin to slowly right itself. With either scenario, I reckon there will follow 50 - 100 years of time spent undoing at least the damage since the 1960s and, best case, the damage since the New Deal was put in place.
The Wooden Bowl
A frail old man went to live with his son, daughter-in-law, and four-year-old grandson. The old man's hands trembled, his eyesight was blurred, and his step faltered. The family ate together at the table. But the elderly grandfather's shaky hands and failing sight made eating difficult. Peas rolled off his spoon onto the floor. When he grasped the glass, milk spilled on the tablecloth. The son and daughter-in-law became irritated with the mess.
"We must do something about Grandfather," said the son, "I've had enough of his spilled milk, noisy eating, and food on the floor." So the husband and wife set a small table in the corner. There, Grandfather ate alone while the rest of the family enjoyed dinner. Since Grandfather had broken a dish or two, his food was served in a wooden bowl. When the family glanced in Grandfather's direction, sometimes he had a tear in his eye as he sat alone. Still, the only words the couple had for him were sharp admonitions when he dropped a fork or spilled food.
The four-year old watched it all in silence. One evening before supper, the father noticed his son playing with scraps on the floor. He asked the child sweetly, " What are you making?" Just as sweetly, the boy responded, "Oh, I am making a little bowl for you and Mama to eat your food when I grow up".
The words so struck the parents that they were speechless. The tears started to stream down their cheeks. Though no word was spoken, both knew what must be done. That evening the husband took Grandfather's hand and gently led him back to the family table. For the remainder of his days he ate every meal with the family. And for some reason, neither husband nor wife seemed to care any longer when a fork was dropped, milk spilled, or the tablecloth soiled.
You are not really a true Boomer. You're too young. You (and I) were born past the peak birth years. I hate to break it to you, but you are going to be one of the ones paying for the Summer Of Love crowd - real soon!
Ditto....I see it all around me....people my age....especially restoring the family....in my church it is so exciting to see young families...together...raising their children.
I am ten years your junior and would just love to compare hours worked per week. Heck, I'd even want to compare hours worked to date since birth!
Soilent Green?
It won't happen until the Boomers born during the peak years (mid 1950s) start to die out in large numbers. So long as they are voting (and you know it will be voting according to the Communistic AARP line) Social Security will be untouchable.
What is your point???I am definetly not a feminist, but I can tell you this when I graduated high school, I wanted to go to college get a education, I DID NOT want to get married and have children right away like my mother's generation did.
I wanted to live out on my own be responsible for my own bills, date who I wanted...
Here's a radical idea... make the boomers pay for their own damn retirements with all that capital they've had their entire lifetimes to build, and stop stealing from their children and their childrens' children and the generations beyond that.
And the ones who can't afford to? Let other boomers support them.
Excellent post, BTW
On CNBC today, there was a segment on a conference of financial planners in Boca Raton that reported the savings rate of the US is now at -0%! Those participating can't believe that only 1/3 of Boomers have saved enough money for retirement, and they are suggesting that this group will have to keep working until they die. Somehow I can't see that. They'll be voting to take the money for their retirement goodies from the next generation, whom they decimated with abortion, through ever higher taxes. Yes, that is a recipe for generational warfare, but the geezers have the numbers to turn this into a socialist mess such as France and Germany are now.
It is true that SS was to be 10% of your retirement...not THE retirement.
As far as the national debt, just direct the current estate tax to only go to reducing debt...by a new law.
I was born in '72 and feel the same way. I identify a lot more with my grandfather than with either of my parents (or any other boomer relatives). Seems that the WW2 generation had its priorities in order, but sadly their success enabled the next generation to have all the wrong priorities and suffer few consequences.
See all the I's in your statement....that is what was wrong and what continues to be wrong with the baby boomer generation. Me, me, me, I, I, I,
They've supported euthenasia for their parents and abortion for their grandchildren and meism for their own children. Quite a predicament.
RE: This has been going on since the '30's, when our grandparents and great-grandparents voted to take money from our parents.
They thought they were taking money from a small group of "fat cats" who reputedly were not strongly affected by the Depression. The Communist propaganda at the time made people hate the rich and made them blame the Depression on "capitalism." Hey, who wrote that book? ;)
I see younger kids all the time who are far more conservative than their parents. What a fantastic trend.
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