Make Way for Aging Boomers

Friday, July 29, 2011

Demographics has influenced the course of humanity for millennia and will continue to do so.

It is the reason China adopted the one-child policy. Population decimation caused by the black plague changed the economics of medieval Europe; it revalued labor and sapped the wealth and power of the nobility. The annihilation of a generation of young men during World War I set the stage for fascism as more rational leaders were not there to oppose it.

Demographics is also going to determine the economic future of the United States. The painful, redundant, dogmatic budget debate we have been suffering through is just the first bite of the apple. We are going to see essentially the same thing repeated at semi-regular intervals for years, if not decades.

The reason is simple: There are 76 million, give or take, baby boomers living. They expect to receive the entitlements they have been promised, and they seem remarkably unwilling to understand that the money is not available.

This situation will lead, inevitably, to several things: Benefits will be reduced in some way. Revenue, to use the PC term, will be increased in some way. Discretionary spending will be reduced in many ways. Inflation. The political debate surrounding these events will remain acrimonious, and politicians will rise on promises made and fall on promises unkept.

Our GNP will be squeezed as money is diverted to essentially unproductive purposes. Granny will not be thrown off a cliff, but will quite possibly be moving in with you. The wealthy will do nicely, even with higher taxes, because the wealthy always do nicely, but government dependents are going to have a tough time.

This is all pretty much set in stone, and all the politicians in the country can only twiddle around the edges.

Nobody seems to want to talk about all this, though it is perfectly obvious. Denial is the current course of action. The only way to avert a seriously diminished national standard of living is for the economy to grow at a rate not seen in years, if ever.

People tell me that I'm a pessimist. I prefer realist myself. It's not that I wouldn't like to be more optimistic; it's just that I've been right so often in anticipating the worst that I have a lot more confidence in the negative view.

Is there anything we can do about all this? Not really. There are 76 million people standing in the way. The "big fix" promoted by John Boehner and the president at the beginning of the current flap was itself just a Band-Aid. Four billion dollars in cuts (even if they are real) over 10 years set against a debt ceiling increase lasting only until after the next election doesn't really accomplish much. It just means the next crisis will occur in 2013, when - guess what - the election of 2014 will be just around the corner.

The Republicans are pushing a balanced budget amendment. This seems like a pretty good idea, though the language hasn't been written, and you can be sure there will be some escape clause in it if it ever is. Even that doesn't solve the problem; it just limits the response. The budget can be balanced only with spending cuts and tax - excuse me, revenue - increases.

I would not expect any grand bargain, ever. That would have to approach the level of redefining government itself; politicians are not likely to head off into that uncomfortable territory. I would expect instead many more years of sniping and partial compromise as more boomers retire and eventually, conveniently, die.

This debate will provide the background noise of American politics for the rest of most of our lives. It will wax and wane, but it is not going to go away.

Fred Wolferman lives in Southern Pines. Contact him by email at fwolferman@sbcglobal.net.

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moonchild7 1 year, 9 months ago

The Baby Boomers were not "PROMISED" entitlements. We PAID and WORKED very hard for them. We've been working now(on average)since the early 60's. I got my first job at age 17 in 1971, was paid $1.80 an hour and it's been recorded on my Social Security "work sheet". Just like all of my other jobs! I worked all of those jobs for myself and for all of the elderly people in my family who lived on nothing but Social Security Benefits. Their benefits came from me! Many of the women in that generation NEVER worked very much. They are all deceased now. The "WAR BABIES" are retiring so speak now although my sister at age 68 is still working a full time job. Baby Boomers like some of those "WAR BABIES" will not be retiring to the shuffle board's and swimming pools. Many of us will continue to work at something because we are the most educated, most active and richest generation the world has ever seen. Here's another statistic that I read about that should "COMFORT" so many of you though. We will also commit suicide(and in fact are now killing ourselves more than teenagers)at record rates. We will not be horrific burdens to anyone. So get off of it and stop complaining. Get to work and be responsible. Oh and if you happen to make a LOT of $$$$$ plan on paying a decent amount of it to our government. I think it's called "Paying it Forward."

fwolferman 1 year, 9 months ago

Thank you moonchild. You have made my point.

golflady 1 year, 9 months ago

Excellent piece. "Granny will not be thrown off a cliff, but will quite possibly be moving in with you." I don't think folks realize just how true this is. I am amazed at people in their 40s, 50s and early 60s who are currently working and state they haven't saved for retirement. Their plan? To work "forever." This is great unless you have health issues, as many of those folks will, and are unable to work. What this means is that fewer people will be able to afford places like Belle Mead or assisted living facilities (most of which are self-pay). Even now, those who need the money from the sale of their homes to move into places like this, aren't able to sell. Quite possibly you will be moving in with Granny!

Cosmo4slice 1 year, 9 months ago

I can't believe I'm agreeing with MC7. I got my first job at 15, and have been paying my share for 34 years. I am in a high labor, skilled profession (Heavy Equipment Technician) I have spent many days, freezing my butt off, sweltering in oppressive heat, covered in oil & grease, beat, bruised & battered. I worked like a dog, and every cent I paid in, is covered with my, Blood, Sweat & Tears. So quit saying it is an entitlement, because it's not.

teufelhunden 1 year, 9 months ago

Good for you. You are a noble man indeed for working so hard. I tip my hat. You deserve what you have worked so hard for!

JeremyG 1 year, 9 months ago

The boomers have certainly given the shaft to the current generations in terms of what they have left us. We will be left paying for their mistakes for years to come. We also will likely not have social security benefits when the time comes. Finally I am sure they won't forget to pull up the ladder on the way out.

Cosmo4slice 1 year, 9 months ago

It's all about ME, ME, ME, not the common good of the people. The younger generation has this idea, that all Boomers are sucking the economy dry. Get off ya'lls duff and go to work. Is it our fault, if we were more industrious, educated, and willing to work for what we have, instead of cryin foul, everytime something didn't meet our expectations. All I have paid in, went to support the generation before me. Now it is time for the next generation to step up to the plate

Aberdeeniac 1 year, 9 months ago

Social security as it is, will fail because it’s a pay as you go system. If you take the time to look at the demographics chart the large swell heading into retirement are the Baby Boomers.
From the link I posted below: “As the baby boomers retire there will be less payroll taxes coming in to support them as retirees. This will cause a significant and fundamental shift in the Social Security system. Currently 3.1 workers support 1 Social Security recipient. Retiring baby boomers will change those numbers to a scant 2 workers supporting 1 Social Security recipient. That is a reduction of 1.1 workers per 1 supported person.” Which means you either raise taxes or cut entitlements.
“The key flaw of Social Security is that it is not a fund program it is a pay-as-you go program. A fund program would take an individual's money and invest it to build up a financial reserve for that individual to use when they retire. Social Security takes a percentage of current workers income and gives it to existing retirees. Essentially the money that workers are currently paying into Social Security is being given to someone else. There is no guarantee the worker will see any of this money again once they retire. “ Get the point? “It is becoming more evident on practically a daily basis that individuals must face the fact that taking responsibility for their retirement without depending on Social Security is fast becoming a stark reality.” NUFF SAID

DaveyNC 1 year, 9 months ago

No, it's all about YOU, YOU, YOU. Always has been. The Boomers aren't known as the Me Generation for nothing. You weren't more industrious, educated and willing to work. You were just the firstest with the mostest. That's all. The next generation is at the plate and we realize, once again, that you outnumber us. Wouldn't kill you all to take a little less on your way out. Accept means testing, work a couple more years, whatever.

CNMT 1 year, 9 months ago

We already will work "a couple of years extra" as they have changed the retirement age for all of us. I know mine is know 66 instead of 65. And I am OK with that. I have worked full time since I graduated from high school (and part time while in high school). I went to college, got an education and have supported myself without any government assistance my entire life....and I will collect Social Security IF it is still there when I retire in 8 years - there are no guarantees for any of us that there will be any money left at all. The thing that irritates me is that there would be more money there if Congress hadn't "borrowed" it for some of their pet projects and never paid it back!

pinewoodnc 1 year, 9 months ago

Oh, brother, DaveyNC is at it again. I knew you'd chime in again with all your hateful rhetoric about the Boomers. We all know you HATE the Boomers so what don't you find another campaign to spit out your hateful remarks.

JeremyG 1 year, 9 months ago

It is YOUR generation that made horrible political decisions over the years that brought us to the mess we are in now. We would be more industrious if Boomer presidents didn't support policies the shipped so many jobs to China and elsewhere. As for more educated I seriously doubt it. In your day you could get a job with a HS diploma and support a family with a retirement package to boot. Today we can barely get a job and barely make rent with a 4 year college degree. As for benefits you can't forget that. They are essentially a thing of the past. In fact to really get anywhere most have to seek a Masters or PhD and by then who knows how much student loan debt you will have. With this said relative wages are falling while the rich get richer. I wonder how we got here? Again Boomer policies.

Courseaire 1 year, 9 months ago

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Aberdeeniac 1 year, 9 months ago

Read this Link and you'll understand why people are upset. Take a close look at the number of workers required to support 1 retiree then and now.

http://www.ideamarketers.com/?social_security_system&articleid=888969

fwolferman 1 year, 9 months ago

Listen, y'all, here are some hard facts to chew on: Average life expectancy in 1935 (SS introduced): 62 Average life expectancy in 1965 (medicare): 70 Average life expectancy today: 78 Workers per retiree in 1950: 16.5 Workers per retiree today: 3.2 Doesn't matter how hard you worked or how much you paid, the money's not there. Demographics.