Skip to comments.As the Boomers Head for the Barn
Posted on 05/15/2012 6:40:08 AM PDT by Kaslin
When the April figures on unemployment were released May 4, they were more than disappointing. They were deeply disturbing.
While the unemployment rate had fallen from 8.2 percent to 8.1 percent, 342,000 workers had stopped looking for work. They had just dropped out of the labor market.
Only 63.6 percent of the U.S. working age population is now in the labor force, the lowest level since December 1981.
During the Reagan, Bush I and Clinton years, participation in the labor force rose steadily to a record 67 percent. The plunge since has been almost uninterrupted.
Here is a major cause of the economic malaise of the 21st century, a condition over which a president has little control. A shrinking share of our population is carrying an ever-expanding army of dependents.
If this were a result of American women going home to have kids, that would be, as it was after World War II, a manifestation of national vigor and health.
But that is not the case here.
The number of Americans of working age not in the labor force grew in April from 87,897,000 to 88,419,000 -- by an astonishing 522,000. This is an immense army for the rest of society to carry.
Why are Americans dropping out?
Some have given up looking for jobs in towns they grew up in, because the jobs are gone and not coming back, and they don't want to leave. Some are rejecting the low-wage unskilled work being offered, because the alternative -- unemployment checks and federal and state welfare -- is not all that torturous.
With some, the work incentive was never implanted. With others, the option of moving back in with the parents is not all that terrible.
America, it seems, is becoming less like the country we grew up in, in its attitudes about work and idleness, and more like Europe.
Whatever its causes, this social and economic torpor that seems beyond the capacity of presidents to correct or cure is a dark cloud over the hopes of Barack Obama for a second term.
And yet another ominous cloud, no longer on the far horizon, is now directly above: the impending departure from the labor force of 70 million baby boomers in the next two decades.
According to the Statistical Abstract of the United States, from Jan. 1, 1930, to Dec. 31, 1935, there were 13 million births in the U.S. From January 1940 through December 1945, there were 16 million.
This was the Silent Generation, born in Depression and war. It never produced a president, and never will, unless Ron Paul catches fire pretty quickly. The Greatest Generation gave us six presidents, starting with JFK and ending with Bush I. Our three most recent presidents -- Bill Clinton, Bush II, Barack Obama -- are all baby boomers.
And here we come to the heart of our next economic crisis.
If one adds up all the children born between Jan. 1, 1946 and Jan. 1, 1965, the era of the great American baby boom, the total comes to 77 million babies born in the United States.
Why is this so significant now?
Because this year, 2012, the first wave of baby boomers, all those born in 1946, like Clinton and George W. Bush, will reach 66, and eligibility for full Social Security and Medicare benefits. The boomers, en masse, will start moving off payrolls onto pension rolls.
Let us assume the 77 million boomers are down to 72 million. This means that over the next 20 years, boomers will be retiring and reaching eligibility for Social Security and Medicare at a rate of 3.6 million a year, or 300,000 a month, or 10,000 every day.
Three hundred thousand a month leaving the labor force may help to explain its shrinkage. And as the boomers are the best-paid, best-educated generation we produced, the loss of their collective skills, abilities and tax contributions will be as heavy a blow to the nation as the funding of their Medicare and Social Security will be a burden to the taxpayers they leave behind in the labor force.
Since Roe v. Wade, abortions have carried off 53 million of the generations that were to replace the boomers. While those 53 million lost have been partially replaced by 40 million immigrants, legal and illegal, our recent immigrants have not exhibited the same income- or tax-producing capacity as boomers.
In 1965, LBJ announced his plan to convert our ordinary society into a Great Society. Since then, trillions have been spent.
The fruits of that immense investment? The illegitimacy rate, dropout rate, crime rate and incarceration rate have set new records, as the test scores of high school students have plummeted to new lows.
Our labor force is shrinking, the number of dependent U.S. adults is growing, our social programs are failing, and our best educated and most productive generation is retiring.
To borrow from Merle Haggard, "Are the good times really over for good?"
Most of these boomers have been paying SS tax since they were 16 with their first job. So the majority have paid into the system for over 40 years. What happened to all that money?
I’m going to need counseling after reading that. That is the most depressing thing I have read.
I’m glad there are no sharp objects around me. I’m almost compelled to stab myself in the eye at the thought of our future. At least then I can collect some dissability before the boomers suck it all out of the system. Right?
And that is the crux of the problem. I paid the maximum SS contributions for as long as I can remember. I also paid a pretty hefty tax bill each year. I checked out from all that in January because I got tired of helping to fund this government's redistribution and massive debt.
Not all that easy anymore, I'm afraid. You'll have to file a claim, get it denied outright, and then stay up late a few nights to get that number of the multiple disability lawyers on TV who'll sue on your behalf...might take one or two tries.
That is unless, of course, you are one of Holder's people, a hugely obese fat-ass, a foreigner, or some other protected victim class - then it's just a trip down to the SS office for a day.
BTW, the best disabilities are those that cannot be physically seen (stress, back problems, carpal whatever)...if you only do one eye, they'll say the other one is still good, ain't it?
Read some stuff by H.S. Dent. He says the same thing with much more detail. I am not saying they are right or wrong, it is just more detail and things to think about.
Many (not ALL) Boomers might find themselves to be disappointed after their lives of birth control, small families, working mother-dom and day care-ing their offspring, that there will not only be no gov’t and invested money and decreasing circulating workforce resources, but also a lack of family members able or even willing to take care of them in their old age.
Their disregard for others not in their own age group, and that includes their parents and grandparents, as well as their own young children, might come back to an added inintended payback.
A lot of boomers have saved little to nothing for retirement. For them staying in the work force after 65 may seem more attractive than subsisting on SS.
I know that is rhetorical.
So let's think about it differently. Inflation works as a multiplier of the malfeasant pyramid scheme.
If you take all 40 years of a Boomers contributions, the amount collected (there is no investment growth) generally does not cover the average payout for more than about 8 years (I think but correction may be in order). A Boomer in 1969 only made about $12,000 per year. A new Firebird only cost $5,000. Gross Social Security payouts per year will eclipse what many made in an entire year when they started paying into it.
Here is the double dip part, the scheme and the reason Social Security is doomed to fail. Not only is the workforce shrinking, and the number of employees paying taxes into Social Security (paying taxes at all) actually going down, but inflation is driving up the real cost of goods and services that are also adjusting what Social Security recipients recieve. Meanwhile, average salaries are still dropping along with the trickle of revenue (compared to what is needed) that is coming in.
There is little hope that social security has a future for the 40 and under crowd. But then again, are any of us still planning to retire before we die?
This is one situation where the federal government can be of great help.
By doing MUCH LESS.
Much less regulation, much less interference, much less paperwork, much less spending, much less taxation—but here is where it gets interesting.
Tax cuts can be targeted to wean the public off the largess of Social Security, Medicare, and even a lot of pension benefits.
It’s a simple idea, really.
The public loudly objects to the idea of “means testing” to receive benefits, because that is money they paid into “the system”, and they want it back. And, they’re right.
So the way around this is to offer those “of means” a better deal. If they are still earning taxable money, offer them tax breaks that are somewhat *larger* than the money they would have gotten from the government.
That is, you can *choose* to take your Social Security checks amounting to $1,000 a year (for example), OR, you can get tax breaks on your NEW income worth an *actual* $1,500. So, by NOT taking the government check, you actually get $500 MORE.
Incredibly fair, because if you don’t have income, and are dependent on that SS check for $1,000, you still get that money. *Your* choice.
But the end result is that a lot of pressure is taken off the SS system, without screwing anybody.
At the same time, doing tax cuts this way is a great stimulus to the economy. So instead of just one good effect, the economy gets two good effects.
Fairtax would light a fire under our economy and bring back trillions of dollars into our economy.
Want a growing economy? Would you like to grow our way out of debt? Would you like a chance to fund our wiped out retirement system?
Stop torturing the producers and creators of wealth. Don’t talk to me about paying tax twice. I don’t give a chit. If we want a future for our children, enacting the fair tax and repealing the 16th amendment provides a future for our children instead of 70% tax rates and slavery to the state.
Don’t whine about the rate being too high. If we get our house in order and regain sanity in spending and reducing our debt, we can cut the fairtax rate.
We’ll have to forbid lawyers from becoming politicians first. We’ll have to forbid pensions for our legislators that exceed the minimum wage. If they want a 3rd term, they get zero pay, zero compensation for expenses or travel.
Im going to need counseling after reading that. That is the most depressing thing I have read.
Im glad there are no sharp objects around me. Im almost compelled to stab myself in the eye at the thought of our future. At least then I can collect some dissability before the boomers suck it all out of the system. Right?
‘boomers’ paid it in to the system. Forced to do so by government, told it would be put in a trust fund for them.
Instead, government spent it.
Your congresspersons had wild spending spree’s. And when their wasn’t enough money left, they just spend wild amounts now, using the American credit card. Future generations.
As for disability. Haven’t you heard? That’s how the unemployment number is going down. Lose your unemployment benefits, we give you..........you guessed it, Disability benefits.
So keep blaming the ‘boomer’s’...........it’s good political spin.
Government is the problem.
SS is a tax, not a defined benefit. That is settled case law.
I am sure this was a rhetorical question and you probably know the answer... it was spent on the Great Society to buy demorat votes with your money, it was spent to prop up other spending programs, it was wasted to create a dependent class of pets for demorat power. Some blame all this largess and waste on the boomers themselves who rose to public office. THAT is a rather flimsy argument since the Boomers began with Clintoon... the die had been cast and the pattern set starting with Roosevelt and polished off by the Greatest Generation in the likes of Kennedy, Nixon, Carter and LBJ (b. 1908). You can thank tricky Dick for inflation when he took us off the gold standard. I hardly remember inflation mentioned before that. You can also thank him for the seeds of the 401 that Ronald Wilson Reagan polished off and gave the money changers a jackpot goldmine to feed of self-directed investor money and make money on both sides of the trade win or lose and then there are all those tasty management fees.
It was never enough to start with though my contributions over the last 40 years would provide the equivalent of about $36,000 a year plus about 3% inflation for a long long time at a constant 6% rate of return... if there were such a thing.
The money is not there though, it is all gone and will never be back. The system is dead, we are just hovering over a corpse waiting on an unwelcome declaration of death. It was spent and squandered and we our boomer generation neither saved enough nor produced enough offspring to make up the difference. Collectively, we are headed for work until death or can’t and the largest population of geriatric indigents the world has ever seen.
80 million boomers will sell to or will what wealth they have acquired to 50 million Gen-X who will be selling to and leading 75 million Gen-Y. Boomers are like a chicken going through a snake. A big bulge steadily being reduced to a pile of crap.
Many Boomers also could afford and desired larger and more expensive homes. As 10,000 a day turn another year older they are putting their homes up for sale. As the younger crowd fails to thrive they are not buying larger and more expensive homes. This is leaving the home markets glutted with those larger and more expensive homes. The problem is going to get worse every day. Toss in the fact that many younger people with money are gun shy about buying after this past three year housing market disaster and these homes are going to suffer even more.
Now - take this same line of thought through to the stock market. How much stock does this generation have tied up in their 401Ks and other accounts - what will happen to the price of those stocks as they go to liquidate it to enjoy their retirement years?
“A lot of boomers have saved little to nothing for retirement. For them staying in the work force after 65 may seem more attractive than subsisting on SS.”
Very few boomers, in the business world, we know, are able to fully retire after the economic meltdown. So they are drawing SS and working.
The only ones we know, who can afford to fully retire, are the teachers,firemen, policemen, and other city/county/state employees. Their retirement pay is excellent as well as their health benefits. I just posted a reply about “poor” retired teachers in Europe, S America, Asia and ? for a month or more on vacation. I don’t know any retirees from the private sector taking one month vacations.
18 posts and not one Pat is a Nazi post yet?
what is wrong with you guys?
they all went to TBL I know..pity
On top of fewer buyers for the McMansions and lesser dwellings that are too big now the property taxes go up to compensate for reduced income and sales taxes as the boomers produce less and spend less. If you realize that you don’t own your property now... brace yourself, it is going to get much worse.
I think it is going to get so much worse that I am seriously questioning ownership of anything but the barest of necessities. I was thinking of buying more land instead of being in what is left of the market but I wonder if taxes will make that prohibitive. I’m seeing more and more large parcels of land for sale. Traditional ranches aren’t making it anymore. Maybe foreigners will pay our taxes?