Tuesday, July 17, 2012

The great intergenerational con

Reprinted from Vox Popoli ~

America should have known the Boomers were evil from the moment they made "never trust anyone over the age of 30" mantra. It's always the liar who assumes everyone else is lying:

Today’s youth, both here and abroad, have been screwed by their parents’ fiscal profligacy and economic mismanagement. Neil Howe, a leading generational theorist, cites the “greed, shortsightedness, and blind partisanship” of the boomers, of whom he is one, for having “brought the global economy to its knees.”...

The screwed generation also enters adulthood loaded down by a mountain of boomer- and senior-incurred debt—debt that spirals ever more out of control. The public debt constitutes a toxic legacy handed over to offspring who will have to pay it off in at least three ways: through higher taxes, less infrastructure and social spending, and, fatefully, the prospect of painfully slow growth for the foreseeable future.

In the United States, the boomers’ bill has risen to about $50,000 a person. In Japan, the red ink for the next generation comes in at more than $95,000 a person. One nasty solution to pay for this growing debt is to tax workers and consumers. Both Germany and Japan, which appears about to double its VAT rate, have been exploring new taxes to pay for the pensions of the boomers.

The huge public-employee pensions now driving many states and cities—most recently Stockton, Calif.—toward the netherworld of bankruptcy represent an extreme case of intergenerational transfer from young to old. It’s a thoroughly rigged boomer game, providing guaranteed generous benefits to older public workers while handing the financial upper echelon a “Wall Street boondoggle” (to quote analyst Walter Russell Mead).
It's not just in the USA either. The "youth movement" was international, and so, unsurprisingly, is the cancer of Boomer-created debt. It's fine to blame today's young for taking on credit card and school loan debt, but let's not forget that it is the Boomers who created the massive public debt as well as making it impossible for those who followed them to do what they did, and shed their school loan debt in bankruptcy.

Fortunately, the time is rapidly approaching when the younger generations can band together and permit the Boomers to experience the consequences they deserve by shutting down their overly generous pensions and refusing to pay for their medical care. They'll keep voting for anyone who promises to serve their self-centered interests, but that will become increasingly irrelevant as more states and localities simply don't have the wherewithal to live up to their contractual obligations.

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