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Generational war is brewing
Tracey Press ^ | 11/10/05 | Froma Harrop

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.


TOPICS: Extended News
KEYWORDS: babyboomers; catfightingasses; generationalwar; generationgap; genx; greedygeezers
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To: A CA Guy
Never discussed when this subject arises:

How much land does the Fed own W. of the Mississippi ?

What program(s) could be funded by an orderly sell off of some of that land ?

21 posted on 11/10/2005 1:38:31 PM PST by TheOracleAtLilac
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To: A CA Guy

Wouldn't it be a little hard to sleep in there?


22 posted on 11/10/2005 1:38:45 PM PST by billhilly (If you're lurking here from DU (Democrats unglued), I trust this post will make you sick.)
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To: qam1

http://liberalquicksand.blogs.com/liberalquicksand/2005/10/froma_harrop_li.html


Below are the last two paragraphs from the above:

"Froma – the flaming liberal – of course is demanding higher taxes to pay for it all, instead of fixing the problem in the first place! Froma and her liberal friends even whisper how Bill Gates and the other evil rich should not get their SS benefits, because after all, "they don’t need them."

"Froma Harrop is a classic example of a liberal, a communist, a socialist – a Democrat. This is why Democrats cannot be trusted to be elected Dog Catcher, let alone anything else. – Hank Dagny-LQ"


23 posted on 11/10/2005 1:38:55 PM PST by Grampa Dave (MSM pseudo reporters use "could, may, and might" when they are lying and spinning.)
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To: Just another Joe

& what's the name of those rebels - JI (?) that may take an active dislike of retiring Americans


24 posted on 11/10/2005 1:40:27 PM PST by TheOracleAtLilac
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To: qam1
Not to worry.

The waves of illegal immigrants will take care of our problem, just like in Europe. Especially if they are Muslims.

25 posted on 11/10/2005 1:42:01 PM PST by Gritty ("America's root problem is the political game remains geared toward bread and circuses -Union-Leader)
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To: qam1

Froma Harrop is an devoted anti-capitalist and Bush hater working in the guise of a writer. Her lack of understanding of economics has never prevented her from earning a living by writing about things that are beyond her grasp. What a great country we live in where such a know-nothing can earn a decent living spewing her know-nothingness, huh...


26 posted on 11/10/2005 1:42:20 PM PST by Zeppo
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To: qam1
I might have mentioned it before, but y'all are starting to piss me off.

I was born in 1962.

I have paid more money to SS than you make - and I will never see a dime, in return.

On the way, I bought 5 college degrees for various folks - with five more on the way.

I don't want a dime of your money.

Stop pretending I do.

Find another bogeyman.

There is a new book out - "Hey, Mom! There is a liberal under my bed!"

It is meant for little kids. Go read it.

27 posted on 11/10/2005 1:44:16 PM PST by patton ("Hard Drive Cemetary" - forthcoming best seller)
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To: qam1
Democrats are not shy about pushing for retiree benefits, but at least they consider raising taxes to pay for them.

Is this supposed to be a good thing? Higher taxes choke off economic growth (making us all poorer) while encouraging even greater spending.

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.

No, the real scam is that politicians continue to promise something for nothing. No matter how much they extort from the taxpayer, they will always spend that much and more.

To paraphrase a dirty Rat, It's the spending, stupid!

28 posted on 11/10/2005 1:44:47 PM PST by Logophile
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To: A CA Guy
The national debt was caused by living generations and IMO as massive wealth passes through deaths of the baby boomers, the death tax should stay in place and the hundreds of billions collected should be earmarked for their national debt.

Interesting comment.

Do you have much faith this money would actually be earmarked for such a purpose -- the proverbial "lock box".

29 posted on 11/10/2005 1:46:18 PM PST by Uncledave
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To: qam1

The old statement, "Be nice to your children...they get to pick your nursing home.", is not so out of touch.


30 posted on 11/10/2005 1:47:27 PM PST by CodeToad
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To: A CA Guy
The national debt was caused by living generations and IMO as massive wealth passes through deaths of the baby boomers, the death tax should stay in place and the hundreds of billions collected should be earmarked for their national debt.

Your childlike faith in the government's ability to spend my money wisely is touching.

31 posted on 11/10/2005 1:50:33 PM PST by Logophile
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To: Just another Joe
living the life of the gentleman farmer in the Philippines.

I set out to do the same thing here in Panama and I'm here to tell you that there's more than one side to that picture.  Everyday I get woken up by squawking parrots and monkeys and I find myself, having to manage a maid, a gardener and other staff, looking at nothing but miles of jungle---

--and loving it.

32 posted on 11/10/2005 1:50:42 PM PST by expat_panama
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To: TheOracleAtLilac
How much land does the Fed own W. of the Mississippi ? ?

A wee bit.


33 posted on 11/10/2005 1:51:11 PM PST by AdamSelene235 (Truth has become so rare and precious she is always attended to by a bodyguard of lies.)
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To: patton

You might not want the money, but 99.9999% of the baby-boomers do. The wife is a social worker. She and the other social workers that she knows all agree that the coming baby-boomers are already exhibiting the worst signs of greed. They have little money, major debts, 30-40 year mortgages that have paid almost nothing on, they think they can work the rest of their lives or that social security might pay them enough to be happy. This is going to be interesting with each passing year.


34 posted on 11/10/2005 1:51:51 PM PST by CodeToad
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To: qam1

My generation, which is just turning 50, is hard-charging, hard working and wants those younger people to get off their butts and TRY to work as long and as hard as we will...


35 posted on 11/10/2005 1:52:30 PM PST by yldstrk (My heros have always been cowboys-Reagan and Bush)
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To: R. Scott
– except for the double taxation thing.

Under our current estate taxing, capital gains are not taxed.

36 posted on 11/10/2005 1:52:39 PM PST by Doe Eyes
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Comment #37 Removed by Moderator

To: qam1

I've always felt that my generation (I was born in 1981. Count anyone born 1981 or later as my generation) has had far more in common with its grandparents (The WW2 generation) than its parents.


38 posted on 11/10/2005 1:53:54 PM PST by JamesP81
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To: Melas

Who euthenizes the euthenizers?


39 posted on 11/10/2005 1:54:27 PM PST by Shalom Israel (Pray for the peace of Jerusalem.)
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To: TheOracleAtLilac
& what's the name of those rebels - JI (?) that may take an active dislike of retiring Americans

I'm not going to be too worried about them.
I've got enough family there to man my compound. ;^)

40 posted on 11/10/2005 1:55:35 PM PST by Just another Joe (Warning: FReeping can be addictive and helpful to your mental health)
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