Baby Boom Bust

Future generations of Americans will probably look back on 2011 as the year the U.S. started down a steep financial slope, because the first baby boomers turn 65 this year — the front edge of a tsunami of baby boomer retirements — and signs are the U.S. is about to be flooded — it will be worse that the eight plagues of Egypt put together.

This means that over the next 20 years, around 10,000 baby boomers will be retiring each day.

And that means a lot more people collecting social security, more people collecting Medicare, more people collecting Medicaid as well.

That also means the members of one of the most affluent generations in America will slow down in buying cars and homes and consumer products of all kinds, as they pass their peak earning years and head into retirement.

That could hurt the economy a lot, but it is clearly a financial disaster for the federal government as those 79 million boomers shift from paying taxes into social security and Medicare and start collecting benefits from them.

The U.S. federal government’s going to be bleeding money as the baby boom retires. The U.S. federal government knows only too well that it can’t pay all the Social Security and Medicare benefits that it promised. There isn’t enough money in the whole world let alone America to do that so the American lawmakers and politicians know they are going to have to make cuts or find some other solutions (extermination camps for senior Americans, anyone?). But politicians are petrified to make the choices to do that or anything else really. Especially in view of the recent events in Tunisia and Egypt where the people had had enough and brought down their ruling regimes.

The two programs need tens of trillions of dollars to pay all the benefits promised. And analysts say that when all the boomers are collecting benefits, the government would need one of every three dollars earned by those still working just to support social security and Medicare. Younger Americans are going to have a much, much higher share of their paychecks going to the federal government to support not only the federal budget in general, but specifically entitlement programs for the elderly.

There are lots of proposals to repair the finances of the two programs. But they’re politically difficult, and the longer the regime waits, the harder and more painful the fixes get.

The two ruling parities perpetually alternating in power in America are afraid to suddenly cut benefits of people once they’re receiving them. But every year that passes puts more seniors on the rolls, making their benefits politically untouchable — meaning more and more of the solution has to come from tax increases (or perhaps new overseas conquests to rob and plunder overseas nations).

Young American taxpayers would no doubt complain, but who would listen? — people over 65 are the most reliable and determined voters, which means lawmakers would be wary of taking anything away from them.

After spending a fortune on the war on terror and to counter rogue states, the U.S. is now faced with a very real possibility that — rather than the terrorists or “rogue” states — it’ll be America’s own baby boomers that will bring about the end of it.
Compiled from news reports by Yanko Phobe.

Not so happy now, huh?
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One Response to “Baby Boom Bust”

  1. Randy Says:

    We must consider that there are scores of unemployed twenty-somethings that will benefit from the retiring baby boomers. Baby boomers will be labeled as ‘not seeking employment’. Right now, an entire swath of our labor pool is unemployed or underemployed. Assuming we’ll have the same number of jobs, those doing the jobs will shift from retiring baby boomers to underemployed recent graduates. Rather than paying unemployment, we’ll be paying social security. As the boomers need medical care, we must remember that while spending will decrease on luxury items, it will increase in healthcare. The utility realized by society will be different (fewer hot tubs, more eye surgeries) but the overall economic circulation may grow which is the actual function of economics: activity (how much happens) not utility (the perceived value of that activity). Is it better for a man to sit and do nothing, or play a concert that ends up being terrible and getting paid for it? The concert. Value is a social perception that defines standard of living. But economic activity, however the value of its output is perceived, is the vital engine of any economy.

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