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.
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations (i.e. The Baby Boomers) are doing that Gen-X and Y will end up paying for.
Freep mail me to be added or dropped. See my home page for details and previous articles.
Happily the boomers have solved our problem by overwhelmingly supporting euthenasia for their own parents. Won't payback be a bitch!
Don't worry, the X-ers have the Schiavo case as all the justification they need to solve their financial problems of 2525. "In the year 25, 25, if grandma's still alive, if the cost of care is just to high ..."
Back in my day...
When you are a democrat.
Don't blame me. I vote Republican! /sarc
You and the horse you rode in on. No one is euthanizing the boomers while I'm alive.
Well, somebody put off writing their column until 2am the night before the article was due! ;-)
… the death tax should stay in place and the hundreds of billions collected should be earmarked for their national debt.
"Meanwhile I wouldn't be surprised if generation X starts to believe in euthanasia..."
The boomers killed a lot of their kids, but the Gen Xs were allowed to live. Payback? And how far back?
"Meanwhile I wouldn't be surprised if generation X starts to believe in euthanasia..."
The boomers killed a lot of their kids, but the Gen Xs were allowed to live. Payback? And how far back?
For about three years now, I have believed that I will not die a natural death. "Duty to die" has been discussed on this forum before.
I'm one of the evil ones. I'm 55.
Here's where the notion that social programs can be sustained by immigration from the third-world falls down. It's one thing to be paying to support your own grandparents -- quite another to support people who are not your kin or kith. Add a little Marxist class struggle, stir in a little racism, simmer in a French broth, and you have the receipe for a social disaster.
Seeing that these very same "boomers" defended and celebrated A Woman's Right to Choose, the chickens are coming home to roost.
Great -- some women have broken the glass ceiling - they are single, sterile or divorced. They refused their own children the right to be born and they have not saved enough to be self-sufficient in their old age.
Now these greedy geezers are going to make sure that those of us who wanted families and had children pay again -- with our tax dollars and our children's to keep them going.
"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?'”
There are approximately one in three children missing in this selfish boomer generation's fertility rate.
A pox on them and on our pro-abort legislators who say killing one's children is a right. There was never any federal law passed that said it was ok to kill your children.
A majority of our Supreme Court Judges merely said it was constitutional to kill off our posterity -- The antithesis of what our founders believed and stated in our Declaration of Independence.
"A nation that kills its children is a nation without hope." John Paul II
If the left would simply stop aborting themselves, none of this would be a problem. We would then actually have a steady growth in population to help distribute the costs of caring for our older folks.
Rice, fish, and mangos. MMMMMMMMMMMmmmmmmmmmmmmmm
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