The science of demographics, best known for its detailed accuracy of group spending and lifestyle behaviors, can give us a darn good look at certain aspects of the future based on things that are certain today. The Baby Boomer generation got its start right after WWII. As a result, we know there are about 76 million American Boomers, many of whom started to retire around 2010. Some will have retired a little early and some will stretch out their working years because they have that opportunity. But, the vast majority will start to transition from a regular income based on working to a smaller amount of income based on drawing down equity in their assets, including investments and homes. Most Boomers will be forced to change their lifestyles from one of spending without much concern to one of watching every dollar closely. Most older folks tend to be conservative and will slow their discretionary spending, and downsize in many ways to conserve their principal and stretch out their money.
Generation X, those born between 1960 and 1980 follow the Boomers and is about half their size. The Gen X’ers are largely in control in our government and political parties with a few Boomers still hanging around in the Supreme Court and other government agencies.
Demographers know Americans’ spending, consumption, and behavioral habits inside and out. They know what we eat, drink, smoke, where we vacation, what we wear, what cars we drive, to whom we talk, the prescriptions we take, where we live and how much money we spend in nearly every area of our lives. They also know our ages, our employment status, how much we have in savings, our health status, where we retire, etc. Are you convinced yet? As if this intrusion into our lives was not enough, the new Health Care Reform Bill allows unprecedented intrusion into our private lives, medical records, and bank accounts. Read the Bill if you doubt what I say.
Boomers have stopped their investments and have started drawing money out of their retirement accounts. The values of the boomers’ assets, homes, and investment accounts have decreased significantly since 2008. Retired Boomers have to live on fixed incomes with little hope of keeping up with inflation. Some Boomers will work longer than planned if they have the opportunity. Others will retire and not have near enough money to last out their life spans. In the past, it was important for parents to leave a significant financial legacy for their children. That may not be the case for Boomers and their Gen X kids.
It will be quite some time if ever before Gen X and those to follow can match the spending and investing level once enjoyed by the Boomers. In the meantime, Gen X and following generations will have to pay huge taxes to make up for decreasing government revenues and higher health and Medicare costs for Boomers and themselves. That doesn’t leave much for Gen X saving and investing. Granted, Boomers will pay taxes on their IRA distributions, but most will be in a lower tax bracket. With increased inflation, their saving won’t go as far as expected. High taxes and the huge debt incurred by our government will burden Gen X and their children for at least a couple of generations to come.
Remember, Social Security and Medicare programs are not government funded, they are tax payer funded. Because health care costs rise faster than other costs, and because there will be about half as many employees paying into Social Security, benefits may be cut, the Gen X retirement age may delayed, and those who work may be taxed to the hilt to pay for those who are in retirement, on Medicare, or receiving some other form of government subsidy. As the poor keep getting government handouts in exchange for their votes at the ballot box, as illegal immigration continues to grow and drain our state and federal systems, those who pay taxes will pay more. No amount of cost-cutting, benefits-reduction or fraud reduction can avoid that math. Think about it! Half as many tax payers supporting a group twice as large that will live much longer with care-related expenses going through the roof! If that doesn’t shake you, then add on you and your children’s share of the deficit (about $50,000 and growing, per person in the US) to pay for all the deficit spending already in place and committed by the recent and current administrations.
In order to keep up this ship afloat, the government may have to raise taxes and print more money. Most of the decision makers and influential movers and shakers are from Gen X with a few Boomers still in the game. Are they the ones to blame, or could this impending disaster have been avoided? Who is responsible? With all this data staring us in the face since the 1960’s, who dropped the ball? Was it even possible to stop the ball once it started rolling?
According to Charlie Reese, a former columnist of the Orlando Sentinel Newspaper, “one hundred senators, 435 congressmen, one president, and nine Supreme Court justices; 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country. Those 545 human beings spend much of their energy convincing you and me that what they did is not their fault. They cooperate in this common con regardless of party.” We get exactly what they all want. “If the tax code is unfair, it’s because they want it unfair. If the budget is in the red, it’s because they want it in the red. If the Marines are in Iraq, it’s because they want them in Iraq. If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way.”
Do you really think that our politicians are interested in anything other than POWER and being reelected? Some may have good intentions, but as the old saying goes, the road to hell is paved with good intentions! Can we blame the boomer generation?
A few good men have expressed some insight into possible outcomes. For example, the late Dr. Adrian Rogers of Bellevue Baptist Church, Memphis, TN said: “You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.”
Marcus Tullius Cicero, a Roman philosopher, politician, lawyer, and orator, circa 55BC said, “The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed least Rome become bankrupt. People must again learn to work, instead of living on public assistance.”
In 1525, Nicolaus Copernicus, a Polish Renaissance mathematician and astronomer, said it this way: “Nations are not ruined by one act of violence, but by quite often, gradually, and almost imperceptibly, by the depreciation of their currency, through excessive quantity.”
William James Durant, a Pulitzer Prize winning historian (1885-1981), studied all the great civilizations from the past and came to this conclusion: “A great civilization is not conquered from without until it has first destroyed itself from within.”
Sound familiar? All these years later and many Boomers and Gen X’ers in power have failed to learn the lessons of the past!
Think about America and the direction it’s headed under the current political regime. It’s time for action. Your vote is more important in 2016 than you can imagine. Please ignore the soundbites and various pundits telling you how to think and feel. Take this opportunity to think critically and develop your self-reliance. Learn the issues, analyze them, choose your local and national candidates wisely, and support those candidates with your effort and dollars. Engage your friends in serious debate over the issues and the candidates. You may ask yourself, “…but why get so involved”? The Answer is simple, it’s up to you and me and like-minded folks to do our part to restore the country we once knew and loved. You may not think our democracy and our freedoms are at stake, but after you analyze and fully understand the issues, you may have a better appreciation and a motivation to get more involved.