News flash: our economy is in the toilet. President-elect Obama will inherit the actions and decisions of the previous government. But what about all the social choices made in the last fifty or so years? Here are three dire consequences of the so-called “Shallowest Generation” – the Baby Boomers.
1. Baby Boomers Have and Continue to Live Beyond Their Means
Says an article at Seeking Alpha.com:
It is clear that all Baby Boomers are not created equal. Based on calculations made by the Federal Reserve, at least 50% of Boomers will not have a happy retirement. The bottom 30% will reach the age of 65 with net worth of less than $100,000. They will try to subsist in poverty, dependent upon social security and part time Wal-Mart jobs until they die penniless. The top 30% will retire to lives of luxury and leisure. The middle 40% will muddle through with social security payments the only thing keeping them from an old age in poverty.
2. The Fundamentals of Our Economy Are Undeniably Shifting
The Boomers grew up in an era where a high school education could ensure work that paid for a middle-class existence. Thanks to global economics this situation is the exception, not the norm. Now our economy demands education, entrepreneurship, and creativity. According to the same article,
The top 20% of households make 12.5 times the lowest 20% of households. This ratio was 7 to 1 in 1982. The top 1% of households make 20% of all the income in the U.S., the highest rate since 1928. Does this statistic portend a decade long depression? The difference between now and 1928 is the huge household debt burden of Americans. This usage of debt by the poor has masked the gap between haves and have nots for the last 20 years.
3. We Are a Nation in Great Debt, with Little to No Personal Savings
Continues the article,
During the current Bush administration, Americans’ savings rate actually went below zero, while household debt as a percentage of GDP soared above 130%, a doubling in 25 years. These figures prove that the apparent prosperity of the last 25 years was an illusion. Beginning in 1982, Baby Boomers chose to take the easy road. Saving, investing and living within your means were cast aside as “Old Schoolâ€. Boomers were handed a better future through the blood, sweat and tears of the “Greatest Generationâ€. Through their hubris, they’ve squandered that better future, the future of their children and imperiled our entire capitalist system. Between 1989 and 2007, credit-card debt soared from $238 billion to $937 billion, a 300% increase. Household liabilities that are in delinquency or default totaled $775 billion at the end of June, according to CreditForecast.com data. This is equal to 7.5% of all U.S. household debt, up from 3% just two years ago.
Ouch! The Baby Boomers developed everything from mass introduction of credit cards to complicated financial shenanigans like home mortgage credit default swaps. Who pays? The generations to come.
For the full, and rather damning story, click here.
