Posted on 05/31/2004 5:13:26 AM PDT by sarcasm
Aging baby boomers could trigger financial market shocks, deflation, slow growth and then an inflationary spurt, all very real risks that central bankers must consider in the next 20 to 30 years.
A research paper laid out these little-explored factors at an Austrian national central bank conference in Vienna on Thursday.
Japan, which is just emerging from a decade of stagnation, deflation and a banking crisis, serves as a wake-up call for the United States and Europe to get down to business and tackle their creaking public pension systems to lessen these risks.
"It could really blow up" if pay-as-you-go pension systems are not reformed, said E. Philip Davis, economics professor at Brunel University in London, who presented the paper. He said that central bankers still have time to assess the impact on monetary policy and their role as lender of last resort to manage the risks created by millions of baby boomers starting to retire in 2010.
But economists at the conference on growth and stability in the European Union said these issues have scarcely been examined from a monetary perspective.
Davis said the 1987 stock market crash, the 1994 bond market reversal, the Mexican peso crisis and even some elements of the 1997-98 Asian crisis are examples of the type of market price volatility that could occur as a huge wave of retirees reallocate their assets from high-growth stocks into safer bonds.
Even the technology-driven stock market bubble of the late 1990s can be partly attributed to a surge of baby boomers entering their peak saving years in their 40s and 50s, he said.
So, if our country goes into another depression, it's because baby-boomers haven't saved for retirement?
well if you don't have enough money to retire then keep working
An incredible proposition, my friend...
But wait!!! I have a few years to think up a reason why society OWES me!!!
No, it will really blow up. Unless one believes that the past century of stock market behavior will suddenly change, we are going to see lower PE ratios over the next decade. Forget 15% stock market yields; 5% will be really good.
As one poster stated so succinctly, the answer is to keep working. In the final analysis, that's exactly what's going to happen.
How about "The Carousel" from Logan's Run?
;-)
Are you or were you in a band that played in Dallas?
The following is aimed mainly at Democrat boomers:
How many times have we heard boomers saying they didn't want to have children? How many times have they told the children they had, "You'll never have to take care of me in your old age." How many times have we seen the boomers legislating their own safety nets? How many times have we seen the boomers mismanaging the economy "for someone else's children?" How many parents and grandparents of boomers have been abandoned while the boomers had "fun."
They asked for freedom from responsibility. I say "deal with the consequences."
As for the Greatest Generation? They deserve everything we can give them. And as for the boomer's children and their children? Let's do our best to restore the ideals of family intradependence and independence from social handouts from governments.
Socialism is about to end in America. Can the boomers deal with it? They've asked us to deal with so much for them -- just for them -- already...
ROTFL - you are so naive, my friend. The federal government has promised to take care of you. I've got 4 scenarios why no one needs to do what you propose. 1. Raise taxes on the young to cover rising costs of Social Security and Medicare (young people are stupid and don't vote). 2. Politicians love to create new departments to solve problems by throwing money at them - how about a new Department of Retirement? 3. Commit some crimes, get caught, go to "jail" (or the "retirement village"), three squares a day and a roof over your head. 4. Become an illegal alien - free healthcare, foodstamps, welfare - a life of leisure, eh Jose?
Working is for suckers.
I was in rant mode, and I should have added copious /sarcasm warnings, thanks...
Aughhh, loose lips sink ships! You just gave them another idea for a department... /humorous_sarcasm
Unfortunately the fact they are drawing seven times what they put in, would be a non-issue if the government was running the program as it should be, or if it was in private hands and the funds taken in were invested rather than ponzied (spent). Most elderly are clueless as to what is being done to the social security, other than, dems, good, republicans, bad.
That statement might be a little too general, but then one might ask oneself why both of the special election candidates are outdoing one another in placating the public with platitudes, ie, I will never vote to increase the age of social security recipiants.
Much of what you say is true. But then again, its not like anybody had/has any choice in having their earnings confiscated to be frittered away in the general budget.
Any government that is going to prevent people from meaningful savings on their own (by confiscating money to be held by the government for their retirement, but instead pissing it away in the general budget), better be damned willing to do what it takes to live up to their end of the bargain. In other words, responsible people who would have saved on their own (and would have ended up with quite a bit more ROI than the Feds are providing) were denied that opportunity, all the while being told that they would be taken care of.
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