Here's the 800 pound gorilla in the room:
There will soon be an epic battle of Gen X / Gen Y vs. the Baby Boomers.
Here's my take. The Boomers have stolen the money and destroyed the prospects of future generations, and they did this knowingly.
The Boomers who've led the past 20 years have:
* Allowed the mother of all Ponzi schemes - Social Security - to grow to an unsupportable level - where they get to cash out at the top, knowing that the suckers (the last ones in) at the bottom of the pyramid (Gen X / Gen Y) ain't gonna get paid out, although they paid in
* Allowed the mother of all Bubbles - the Housing Bubble - to grow to an unsupportable level - where they get to cash out at the top (selling that $50,000 house for an $800,000 gain), retire nice and comfy, knowing that the suckers (the last ones in - the younger generation) will see plummeting values on the assets the Boomers sold them
* Allowed the mother of all Debts - the Deficit - to grow to such an unsupportable level that future generations will struggle to simply pay the interest due, or even default. No worries though - it was sure a blast spending all that money (on themselves) the past 20 years. Saving? Boring! Spending? Fun!
But, alas, the Boomers will soon lose their grip on power as they get older and retire. Soon we'll have our first Gen X Senators, our first Gen Y President. The Harold Fords, the Barrak Obamas, etc.
That's when it'll be on. That's when Gen X / Gen Y start cutting the benefits of the Boomers - health care, social security payments, pensions etc.
The damage will already have been done, but there will be some major paybacks for the Boomers - who'll have lost the levers of power. They'll also have to worry about the effect of a plummeting dollar, a declining market, sky-high interest rates and skyrocketing health care costs eating away at the value of their nest eggs.
You can't pave the streets with gold. Everyone can't get rich. And if you don't save, you might not eat.
Let the battle begin. The sooner it does, the better the outcome.
It'll start with a recognition by Gen X / Gen Y that the boomers set them up with the Housing Bubble, and they'll be pissed.
January 31, 2006
Posted by blogger at 1/31/2006