Saturday, March 9, 2019

Are Baby Boomers Just Lucky?

     I like to think that as we age we baby boomers are leaving the world a better place, at least compared to the way we found it half a century ago. The economy has grown; rights for women and minorities have expanded, new technology has brought many benefits, consciousness has been raised for all kinds of issues including peace, love and global warming.

     But then I occasionally get a comment on my blog -- maybe you get them too? -- excoriating me for being a smug, self-satisfied baby boomer. A recent one charged: "You baby boomers are literally the most evil generation ever to exist. You destroyed your own children's future, destroyed the economy, and then you sit back and smugly laugh about it." And then it went on to suggest that we baby boomers die off as fast as we can.

     The source of these kinds of comments is always anonymous, and usually angry, so it's easy to dismiss them as the rantings of some disaffected outcast. Still, I sometimes wonder, if I were in my 20s or 30s, what would I think of baby boomers?

     Would I believe that baby boomers are smug, self-satisfied people who just don't know how fortunate they are, enjoying a growing economy and good jobs for most of their lives, as well as lots of benefits like Social Security (which only started paying benefits in 1940) and Medicare (which only began in 1966), all at the expense of future generations?

     Meanwhile, according to the polls, some 60% of Americans think the country is headed in the wrong direction, while less than 40% say it's on the right track. And a solid plurality has lost faith in prominent public institutions, and believes that both major political parties are an impediment to real progress. Or perhaps another way to put the question: Are baby boomers just lucky enough to be living in peak America?

     I happened to catch an interview with Jeffrey Gundlach, ceo of the investment firm Doubleline. I'm sure some of what he says is self-serving, but he is also a smart, well-educated financial expert, so I wouldn't dismiss his views quite as quickly as those of an anonymous blog commenter. Gundlach asks us to look at how much we spend on old people as opposed to how much we spend on young people. According to him, the ratio is seven to one -- how much of the U. S. government budget goes to paying for things for people over 65 compared to paying for things for those under age 18. Is it fair, he asks, for old people to gobble up government resources and leave their children and grandchildren with table scraps?

     "And if you're investing in dying people," he adds, "and not investing in the future, you don't have a very great future." He claims that baby boomers have all the money and the millennials don't . . . "I mean, they can't afford a house, they have student loan debt. They're starting to believe that they kind of got screwed by the system."

     So have we screwed our children, leaving them with huge student loans and massive government deficits, unable to buy a house or afford to have children? Have we screwed our children by leaving them with a dirtier, warmer world as we continue to drive our SUVs at gas-guzzling speeds and crank up our air conditioners to keep ourselves from ever breaking a sweat?

     Gundlach also thinks there is no way we can fulfill our promises to future retired people. The unfunded amount of state retirement funds runs into trillions of dollars (according to Reuters, Illinois alone has an unfunded pension liability of $133.5 billion), and he says the toll to pay for that would cause economic chaos. So some of these people will not get paid. Not us baby boomers. We'll get paid. But our children and grandchildren. The funds will either go broke, or else they will have to scale back payments by limiting the amount of payouts or else taxing payouts to get the money back.

     He also seems to think the same thing about Social Security, which is already paying out more than it collects in taxes, and will deplete its trust fund in about 15 years. If nothing is done, Social Security will be forced to cut benefits by about 25% to match the money it brings in. So Gundlach predicts something will have to change -- that the retirement age will have to be lifted, and that some people will be cut out, presumably more affluent people who perhaps don't "need" the money but who paid in their entire working lives with the promise that they would collect benefits, but who in the end will never collect anything as their share will go to poorer people.

     We're all familiar with the ways to "save" Social Security. The problem is that we can't agree on what should be done, and the politicians won't touch the issue for fear of losing their jobs.

    I don't mean to get into the politics of this. But I wonder: Are we stealing from our children's future by sucking up all the government benefits and leaving them with nothing but a mountain of debt? Or can we can get out of this by taxing the wealthy and issuing more and more debt? And in the final analysis -- as a final Baby Boomer report card, if you will -- are we truly bequeathing to our children a better and more affluent world, one that is more equal, more peaceful, more comfortable, and more fair?

26 comments:

Terra said...

Lots of food for thought. I do question about the percentage of government spending on the elderly vs. people under 18 since I think education must be a huge amount spent on the young. Did that get factored in? I am a boomer and when my husband and I were young we said that our parents' generation after WWII had the best financial situation.

Red said...

I see that baby boomers have enjoyed good times. There's always a wingnut or two round to make some very angry inaccurate comments. After that it's not black and white. Baby boomers have made major contributions Baby boomers have paid their part of infrastructure and people coming later will still make use of the infrastructure. People coming later will benefit by changes made like pharmaceuticals.Why shouldn't they have to pay their share?

Janis said...

Another blogger I follow... sorry, I can't remember who, received that exact same comment on her blog. Anonymous must be spreading his/her bitterness around the blogosphere whenever any of us boomers dare to write about how happy we are. So sad that they have chosen blame and negativity as their mantra.

Anonymous said...

While it may be true that boomers are benefiting from Social Security and Medicare, it’s not necessarily true that their welfare has come at the expense of their children. The children and grandchildren may well inherit a considerable amount of wealth from their parents. And as far as the public pensions some boomers receive, as they die off, the situation improves for the children (provided that the state and local governments fix the public pension system that caused the problem).

With each generation some members feel that they “can’t buy a house... can’t pay for an education” etc. I am a boomer, born in 1954, and I am absolutely certain my parent’s generation made considerably greater sacrifices than the boomers— the Great Depression, WW2 and Korea, etc. And they built a better world for their children. But buying a first house, getting educated, and so forth is never easy for any generation, it takes making choices and sacrifices. I know several boomers who, like me, enlisted into the military and after they served, received the many benefits of the GI Bill and state and local programs. (When mortgage rates were in the 13%- 17% in the late 1970s , I had our State’s home loan program at 3%.) This is still available to our children, in fact, my son enlisted, used the Iraq Era GI bill for college, and a state home loan program for veterans to get his first house. He also worked two jobs at times, as I and others in the boomer generation have done, to raise their standard of living.

These are complex issues, but solvable. I’d like to see the children of the boomers advance their lives and get what they need and want. I just think that many believe that they are the first to experience these challenges, and, because many were not denied much by their parents when growing up, they expect it NOW.

Fortunately the children are smart and creative. There is much to be optimistic about. Things will work out.

Rian said...

I like the first paragraph here, Tom. As for the rest of the article…

It seems to me that although what is being said is true to some extent - the baby boomers inherited good fortune - but that doesn't mean they (we) should be held responsible for what might be going wrong now. We went to college, we worked hard for the life we have. We care deeply about our children’s future. (We paid for our 3 kids’ college educations by taking out student loans and are still paying on these – which is fine).

But if the economy as well as climate is cyclic, then things have a natural order. IMO - if we can foresee the problems ahead (SS, Medicare, climate change, etc.) surely we should be able to put practices/laws in place to counteract these things (apparently easier said than done). But we (all generations) need to find a way to continue to take care of our elderly generations (whether it be by SS & Medicare or socialized medicine) as well as make education a priority or at least more of a priority than it seems to be now.

Placing blame is never the answer. Working together to solve the problem is.

Karen said...

I know I worked harder and longer when I was growing up as compared to many of the young adults of today that I know. Most don’t want to work and feel entitled to the best of everything. The newest of technology, and update often, new cars every few years and large houses, many trips and vacations. They want it all now without putting in any work. Handed to them. We helped create this by coddling our kids more than we ever were. At least there are some that know how to work and save. They will be the ones to succeed.

Anonymous said...

In my state, NY, if you take up residence in the state (at least 1 year) you can go to any state college for free tuition. So, I don't understand what anyone is complaining about. At least not here. Enrollment is at full capacity. Of course, when you graduate you have to reside in the state for another few more years otherwise your tuition will be due retroactively.
To the graduating classes prior, they got low cost student loans.....barely 1/2% if loan repayments were taken out of their checking accounts monthly. Anything wrong with borrowing student loans under 1%?
The kids graduating today earn 3 to 4 times more than what I earned. Yet I managed to buy a home, two cars, take 1 vacation a year and pay for private schooling. My children have excellent work habits. They learned by example.

Sounds to me the kids of today are looking for someone to blame. People today love to play the victim game. Let them blame whomever they want. Ain't gonna make their lives any better. It takes guts, strength and determination to make it. These are character traits that unfortunately are few and far between. To prove my point, just listen to the idiotic nonsense that spews out of the mouth of Alexandria Ocasio-Cortez (AOC)

I'd be afraid. Very, very afraid.

Olga said...

I have received that anonymous comment and I do worry about the future for my children and grandchildren even as I know they have to follow their own paths. I make a conscious choice to have optimism in the future though. It's not about always grasping for more but each of us dong our share.

Tom said...

I agree, Karen, that they (we) all want it NOW, in large part because TV, the Internet and esp. Social Media spread information (and misinformation) so quickly that people have lost sight of the fact that things take time in real life. It takes years to get an education, a lifetime to save for retirement, and a generation or two for immigrants to fully integrate into society. I don't think our children -- or most of them anyway -- are looking to blame us so much as they are uncertain about an uncertain future, and maybe don't appreciate that their parents struggled too.

Tabor said...

I think it is far more complicated than blaming an entire generation. When we go there will be a big dip in the economy as we also buy many services and products that full time workers do not. We introduced many good laws, but we allowed the more powerful among us to twist and change those laws so that benefits and services were not applied in an equal and means tested manner. Those who feel disaffected should become involved and work to change things. WE made mistakes and so will the millennial.

Jono said...

I believe your anonymous critic has vastly oversimplified the world to meet his point of view, but we still seem to care less about each other than most of the rest of the civilized world.

gigihawaii said...

In 15 years, I'll be 88 years old and probably dead. So, I am not too worried about SS running out. As for the younger generation, they have electronics I never had and to me, they are better off than I was when I was their age.

David @iretiredyoung said...

I know that I worked hard, and was sensible in the way that I lived. I also saved more than many others, although that meant that I didn't always do as much as they did. I use very little state support (in fact I'm struggling to think of anything significant at all) and also consider my environmental footprint, albeit with some room for improvement. These things helped put me in the good position that I'm in, and I don't believe that I should feel guilty for that. But on the other hand, there are a number of interesting points raised in your post.

The things that I'm most pleased with in my life are things I've worked hard on. So, rather than getting angry and blaming people, working positively to change the things you don't like is likely to produce a far better result. I know that has been the case for me, and these are the lessons that I hope I have passed on to my children.

By the way, I just checked and I seem to be slightly after the baby boomer years. That's made me feel young ;)

Kathy @ SMART Living 365.com said...

Hi Tom! This post seems to have struck a nerve for some. I tend to believe that as baby boomers we have been incredibly lucky. As you say, most of us won't be effected by the MASSIVE Government debt we are all under, the global weirding that is sure to create far more problems than we can even guess at, other environmental issues, growing population AND the financial situation that will eventually have to be dealt with. I don't have children but I am deeply concerned for the generations to come. However, I often ask myself why more people with children continue to act as though it isn't a big deal and vote for people who are creating the problem in the first place--and I think I just found the answer. Some of your readers don't think there IS a problem. Wow! It's times like this that I feel I came from another planet!!! :-) Thankfully, I do believe there are quite a few of us who acknowledge the problems and are doing whatever they can so those generations that follow will be able to think on us more kindly. Either way, we have work to do! ~Kathy

Linda Myers said...

We intend to leave what we have left to our children.

Housing in the Seattle area is very expensive - so expensive that most of our children can't afford to buy a place. It's because of the influx of the tech industry, I think. I'd love to sell our house to our kids, but if we sold it for what they can afford, we'll have to pay taxes on the amount we could have sold it for. Or something like that.

Some of our kids have made good choices and some have made not so good ones. Opportunity was available to all of them, but some got distracted by short-term pleasures. I suspect it's always been like that.

Tom said...

Kathy, I often wonder why many of the children themselves seem not to care about the pressing problems, unless it's just that they're too busy working and having families. The unequal wealth doesn't affect them that much, since they're focused on getting ahead themselves. They pay lip service to global warming but drive SUVs and other gas guzzlers at 70 or 75 mph down the highway, because they're always in a hurry. They worry about Social Security, but don't seem to be putting any pressure on politicians to shore up system.

Another example, we have climate deniers on one side and Green New Deal people on the other. Two extreme and potentially disastrous positions. But whatever happened to the reasonable and workable solutions involving higher mileage for cars, a surtax to buy a car that doesn't get at least 30 mpg, solar panels for new homes, the phaseout of coal, the phase-in of electric cars, and a few other ideas that individually are insufficient to solve the problem, but together could change the way we live for the better, and offer lots of new jobs without producing enormous social or economic upheaval

Or what about income inequality. Republicans offer tax breaks for the rich, while Dems want to punish them by taxing away their wealth. But what ever happened to the limits on untaxable inheritance? Twenty years ago it was $1 million, then it went to $5 million, and now it's $11 million. If we simply went back to $5 million or $1 million it would go a long way toward re-establishing equality and preventing family dynasties from amassing obscene amounts of wealth and power. Also whatever happened to taxing carried interest trade at regular rates, instead of preferred capital gains rates. This is a small item, in that it wouldn't affect many people, but closing this loophole would get more Wall Streeters to pay their fair share. Both Clinton AND Trump were in favor of getting rid of carried interest; but now, more than two years later nothing has happened and you hear nothing about it.

All I'm saying is that there is not a crisis. We don't need a revolution. We just need to go back to more sensible, consensus policies from only ten or twenty years ago. And then we can improve from there, in progressive steps, but the journey of a thousand steps begins with the first step.

Diane Dahli said...

No one ever increased their lot in life by taking down someone else. That's simply not how we improve our situation, or the world for that matter, so I don't sympathize with people who think that way. Although there are Millennials who are angry and feel dispossessed, I'm convinced that the majority of young people seem to be responsible, hard working and charitable toward others, particularly minorities. I think their values are admirable, and believe that they will be the generation that will change the world. They are more aware than any previous generation of the terrible toll our culture has taken on the planet. To many of them, that is the number one problem we face today.

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DUTA said...

"We don't need a revolution" says Tom. Right. A revolution won't change things, not even war. Climate will. People might become homeless, nomads, face famine and death. Sea towns and islands might get swallowed by the waters. We should warn the younger generation about the future it awaits them. Social Security, Medical Insurance? We are in another phase now.

Janette said...

I have gotten the exact same comment. LOL.You confirmed it---bot.
I contend we are leaving the world in a better place. Diseases that kids died of (or at least were very sick from)when I was a child, we have taken care to stamp out. They grew up wearing seat belts and car seats. Every young college graduate in my family has chosen to travel widely. Our generation opened that door for them. They all have phones (and some of the plans cost more then my rent my first year out of school). We help bring clean water to far off villages with well pumps. Solar light lights up even the darkest parts of the world. They, in turn, have the great opportunity to be missionaries to these far off places---just for a semester.SchoolCorporal punishment was rampant in my dad's generation, less in mine, almost extinct in my children's. Guess what? We could not afford to live where my parents lived when we were in our 40's. They could not afford to live where their parents lived in their 40's. The "I want it now" people have got to figure out WHAT they want and go get it. It is the US and they can if they want it bad enough. We worked some "sucky" jobs to "climb the ladder". Please, let me tell you about the 420 ft first apartment I had.
Should we be relooking the end of life care? Absolutely. I have friends who insist on expensive heart care for their 88 yr old dad....you have to die! We need a type of socialized medicine (of course the Army provides that, but we no longer insist that the generation gives service in any way).
Last, the loudest voices are those of the "educated". Remember when worrying about paying off college loans- you are writing about 30% of the population that graduates from college. It was 25% when I was attending and 15% when my dad attended. Maybe the 70% who don't go should be seen.
OK---I am done. I'm babysitting the grands. The circle of life.

Splash said...

I graduated $14K in debt, at that time an executive salary was $35K. My first job, I was making $400/month. My first home, I managed to get 95% financing, and counted myself super lucky to get a really decent interest rate...14%. I was making $1800/mo and the home was a fixer upper at 125K. I worked so hard on that house to make it livable! I'm still not wealthy--I don't eat out and don't take vacations, but I manage to have a roof over my head and good food on the table. I'm pretty blessed, I think. Also, retired in 18 days! I plan to deliver food for Meals on Wheels.

Wisewebwoman said...

There is so much going on, climate change, huge student debt, economic uncertainty, the greatest transfer of wealth to the top 1% ever, and on and on. I know my life was far better than my mother's as was hers better than her own. My granddaughter is super smart and ambitious so she'll make it. Her ambition, like most of her colleagues, is to finish grad school this summer, get a well paid position to retire her student debt and then go work in the so-called 3rd world. None of them plan children being all too aware of the future of civilization as we know it.

They view capitalism as a failed experiment in creating such extreme poverty and genocides and the obscenity of billionaires and extreme militarism.

I could go on. But you get the picture.

XO
WWW

Timq said...

I'm not a baby boomer. I'm Gen X so I'm not sure if you want my comments or not.
I give a lot of ribbing to the Boomer generation. For the most part it's good natured. Obviously I agree that every generation has its good and bad and most of what you hear about all generations is more anecdotal than fact. I give the same ribbing to Millennial's ("they want it all now, etc.).
I would say that the latter 1/2 of the 20th century was, looking back, really good for the US despite Vietnam, Desert Storm, 87 stock market crash, 2000 telecom bust, and other mishaps. And Boomers did benefit from that. But I am also sure that there were many things that were not easy for them.
The same is true of Gen X, the Millennial's, and will be true for all that follow.
I think the same advice that Benjamin Franklin outlined in his almanac for achieving wealth over a lifetime is as true now as was in the Boomer's prime as it was in the 1700's. You have to stay after it. You have to work hard, spend less than you earn, and always invest. Invest your youth in gaining knowledge and experience. Invest your savings. As you get older, invest in your children. Always learning, always working, and always assuming the good times will be followed by lean will go a long way toward making sure your golden years are closer to gold than lead.
Do bad things happen to good people? Yes. Will my prescription work for 100% of the people who try it? No. But it won't hurt.
No matter your birth date, try to do something today to make your situation better, remain optimistic, and try to put yourself in a position that when a lucky break comes your way, you are in a position to take advantage.
And then when you are older, if you are somewhat successful, maybe see if you can make some lucky breaks happen for those that come after you.

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