January 31, 2006

Let's get it on - Gen X / Gen Y vs. the Baby Boomers


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.




41 comments:

SiliconValleyGeek said...

The boomers have been the most selfish generation ever. However, their parents were probably the greatest generation.

Anonymous said...

The first boomers are retiring, some in their early 50s, with generous (not means tested) SS benefits, cash from downsizing at the peak of the housing bubble and free prescription drugs paid for out of my toddler's future pocket. Meanwhile, as an X'er with 20 years working at a decent job with a good 401K plan, the only way I forsee retiring before the age of 95 is if God takes me. But I shouldn't be surprised, the boomers also depleted my daughter's earth while enjoying decades of cheap energy. There's was the generation of free sex and drugs, and they left behind a legacy of environmental and fincancial debt, AIDs and feral children.

mellinhead said...

You forgot one thing. They can still vote when they are old. And they can vote in their elderly leaders. Having said that I do see resentment brewing between generations. I here comments about never retiring while the boss is almost done waiting for his pension. Read the "the coming generational storm", its interesting if not gloomy. I expect the boomers to "rediscover" their liberal spending roots in a few years.

Bake McBride said...

The Harold Fords and Barrak Obama show plenty of promise (and I'm sure there are dozens of more from both parties)

I have yet to see any of the up and coming politicians even attempt to address Social Security. Everyone says there is a problem, but no one is even willing to address it for fear of the political backlash.

Do we move the retirement age back?
Do we set up Private Accounts?
Do we exclude people that have paid into the system that are considered "well off"?

There hasn't been one young politician with big enough stones to even begine the discussion. Everyone says..."Well there is a problem, and it's only going to get worse....."

No sh-t Sherlock's...how about putting an idea on the table that might bring out the other Chicken Littles from their holes so the dialog can begin.

azfamdeals1 said...

The boomers are the smaller part of it...its the multi-national corporations that have dominated the game and re-arranged the economic order the past 25 yrs.
So slick, that they have us debating inter-generational conflict, pitting children against parents and grandparents.
When stats show that 5% own/control 90% of the wealth in this country, who do you think they are?

Anonymous said...

First, Definition of a Baby Boomer: The Generation born between 1946 and 1964. The oldest are 60 and youngest 41. Yes, they are the me generation.

The country has swung very right, but there is discontent. I am afraid that shrub and Gspan may have broken America. But we can hope that the events of the past few years will invigorate the opposition to take this country back. As for generational warfare xers and yers are such slackers already and have very little juice.

Anonymous said...

Don't want to pay for Gen X scumbags? Then don't work and don't be a slave to the system, that way you don't have to pay taxes! Moving to another country is an option too.

Anonymous said...

Although a generation X’er myself, I wouldn’t entirely blame the baby boomers for the current economic situation. Some of the financial institutions which contribute to this problem can be traced back to the great depression, others all of the way back to the founding of our nation. The national debt for example: to my knowledge America has never been solvent.

I agree with your conclusion, but for a different reason. As baby boomers leave the workforce, there will be a shortage of workers. The principle of supply and demand will drive up the value of labor and drive down the value of wealth. For example, a surplus of old people and a shortage of medical professionals will cause the costs of medical care to sky rocket. Doctors and nurses will get paid more, while patients will receive less care for their money. The same principle will apply in every other career field. This is not a good time to be growing old.

Anonymous said...

I've been waiting for this. I'm sick of hearing about "boomers this... boomers that..." from the media watching their every move, as if they are the rudder of the economy. I think you're right. We'll see more scrutiny of this group and their will be a movement to put it in the past and forget it and look to the future. Goodbye boomers.

Anonymous said...

I hear Boomers are delicious. Soylent Green, Baby! SOYLENT GREEN!!!

lisoosh said...

Trouble is older people are more likely to vote than the young. They'll keep their stranglehold on the country as long as they can get their little "personal mobility" scooters to the polling booths.

ECOBUILDER said...

Hi, everybody!

"Starving the Beast" - that's a name of that policy Shrub's and Co. implementing for Social Security, Medicaid and Medicare. We're movind toward full-scale default.

Mark my words, guys:
DEFAULT ON EVERYTHING
(Bonds, Notes, Stocks, CDs, IRAs, 401s, etc, etc.) - all paper assets gonna fail.

The only one thing that will help after default is good health, useful skills (lawers will be screwed) and shotguns with munition :-[

taxplanner said...

Without a doubt SS should be means tested after a person recieves what they contributed (plus a reasonalbe return).

Wes D said...

Blaming everything on the boomers is a stretch. They ran up the housing market because many saw thousands of $$ in retirement funds evaporate in the stock market meltdown. Instead of being patient and letting the time value of money work it's magic, they inflated the housing bubble and will now be royally screwed. I think the grand plans of retirement driving big RV's around the country is going to blow away like dust during the dust bowl. Those who can afford RV's after the housing meltdown won't be able or willing ot pay for the gasoline. This might be a good thing considering many campgrounds are shutting down due to development pressures.

I'm more worried about the generation Y "consumerism society". People my age who are buying $300k homes and eating ramen noodles and driving Escalades. I'd be really surprised if we could win a defensive war because young people have no understanding of sacrifice. Everyone would be sitting at home with guns protecting their SUVs and HDTV's without regards to the greater security or economy.

Bill said...

What rubbish. Boomers aren't responsible for this. The Yuppies of the 1980s with their hilarious wine and cheese tasting parties created the illusion of attainable aristocracy (many actually bought titles), and their pretentions to wealth and glamour were the beginning of a disaster. These Yuppies then were in their 20s and today are in their 40s. They and their even greedier and more pretentious children are the ones you should be railing against.

I suspect many of the bloggers here are from California, especially Northern California, and don't know that the drugged-out hippie movement affected only a tiny percentage of the American population in the '60s and '70s, but that much of that group headed West. So what may appear to have been a huge group in California, was almost nothing elsewhere. Most Boomers were the exact opposite of hippies: conservative, traditional, and many still are.

I don't know any wealthy Boomers cashing in on the bubble, and I live in a very expensive neighborhood that was inexpensive before the Yuppies moved in. All I've seen so far are children of the '80s, whatever one calls them, and their pseudo-image obsessed Yuppie parents carrying on as usual.

Anonymous said...

Hey don't worry, Mobil/Exxon and their 36 billion dollars in profits will take care of us all!
The oil companies really suffered with the rest of us...... HA HA HA!

skep-tic said...

good luck winning that battle. boomers will spend it all and more till the end.

should be a booming industry in off shore tax shelters for younger workers in the coming years...

Anonymous said...

Hmmm. I'm a boomer and I have no credit card debt. Own 1 house and some inherited land in Arkansas. I have not cashed out on the refi of my house. Instead I opted for a 15 year payout. No, I don't live in a McMansion. Yes, I have saved for retirement. Yes, I am appalled at some of the greedy materialism in this country. I don't really blame the X,Y, or B's who are pissed about all of this. I sure am.

Anonymous said...

"The boomers have been the most selfish generation ever. However, their parents were probably the greatest generation."

Respectfully, I must disagree with you loudly. But I do agree my parents generation was one of the greatest. After all, they saved the free world from the evils of domination by the Axis Powers.

I was born in 1945. What most younger people do not understand is that the effects of WW II were still unfolding. One of my earliest memories is of the teenaged son of a neighbor going away to fight in Korea. He was filled with pride drinking beer and bragging about his newly acquired fighting skills. As a machine gunner, he was killed within a few minutes battling Chinese hoardes. His parents never even got to bury his body.

Out of a graduating class of over 600, my high school sent about 200 young men to Vietnam. Over 100 were killed in a war the U.S. never should have fought. After all, Ho Chi Min wanted the U.S. to back his revolution but we chose instead to back the French. Major errors in judgment were made by President Lyndon Johnson and his Cabinet.

I enrolled in college on a full scholarship for debate and public speaking. But my school was reactivating competitive football.
My financial aid was changed to a small academic scholarship combinded with student loans. Which meant that I was forced to work my way through school. I went to school full time carrying 16 - 18 units and worked full time in the evening a the Bank of America.

Failure and/or cutting back on school was not an option. We had the draft back then. If you dropped out of school or dropped some courses, you were made immediately eligible for military service. Over 200 of the males graduating from college with me in 1967 died in Vietnam. Another 150 were wounded. What a total waste!

After I graduated from college and enrolled in an MBA program, my wife and I got married (back then, nobody even considered living together). Within a few months, my wife was pregnant. Again, I was back running a treadmill, working full time and going to college part time.

Long story short: After getting a J.D./M.B.A., and working 70 hour weeks for nearly 30 years, now I have a chance at retirement.
But the corporate world has changed. It no longer is run by 'Boomers' but is dominated by Gen-X-ers. The younger generation has a 'Me-First' attitude. Recall the corporate corruption made famous in the 1990's? Where high executives earned millions in bonuses while mid-level officers slaved for chum change? The Gen-X-ers did that, not the 'Boomers.'

The real estate bubble is going to bankrupt people nationally. Most of them will be Gen-X-ers.
Boomers are falling victim to all sorts of real estate scams as they try to scape together retirement money. Most will work until they die.

Millions of Gen-X-ers are chained by debt:

http://newspundit.net/americainchains.html

You did that to yourselves.

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Phoenix

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flip

AmazingRuss said...

My take on it is that there are greedy fools in every generation. As an X-er looking at the boomers and Y-ers, I see the boomers as being more competant and harder working, if anything, than either of the subsequent generations. If they were shiftless, where did all this infrastructure come from?

The boomer generation does contain its share of fools. My dad has been prudent all his life, and as a machinist has managed to save up half a million and own his house...I don't think he's ever made more than 25 bucks an hour. Yet he works with guys his age that have nothing, and are buying a new car every 2 years.

I know a lot of pretty hard working and brilliant Gen-X and Y folks, too. I don't think its going to be a generational war...I think it's going to be the same old war it's been since everybody was allowed to vote: The lazy and stupid vs. the hard working and smart.

Pessimist that I am, I think the smart folk are outnumbered. Just look at what we elect to represent us...loudmouthed, deceitful sociopaths, almost to a man.

This realization has sapped my motivation...I'm simply not going to bust ass just so a bunch of losers can vote to take away my earnings...no matter HOW old they are. In a democracy filled with people that don't think they have enough, having wealth is like painting a bullseye on your back for the parasites.

My plan is to work 3 or 4 days a week (I make decent money doing computer work), live simply, and enjoy what comes my way. I did the life in the fast lane, wealthy boy-wonder thing for a few years, and I found once I had all the stuff, and got used to having it, I didn't really feel any different than I had when I was poor, with the exeption of having all this STUFF to take care of and worry about losing.

I'm focusing on the intangibles...time to think quietly, write music, and software that has no concievable use but art. Time to walk over and hug my wife 20 times a day. Time to learn things that have no conceivable economic benefit. Time to be me instead of a cog in an insane machine careening off a cliff.

Don't get me wrong...I'm saving for when my wife and I will need help taking care of ourselves, but I have a feeling that, if we live right, that will be a fairly short period of time.

Anonymous said...

The correct link is:

http://newspundit.net/
americainchains.html

Marinite said...

It's too simplistic and too easy to blame the boomers. You make it sound like they colluded together to cause this. Give me a break. Every generation blames the previous generation for something.

foreclose_me said...

That Obama reference kind of bothered me.. I had never seen him mentioned as a gen X/Y phenomenon, instead he is usually promoted as a half-White("the first Black") who is in the Senate.

In regard to the idea that geezers can vote in their geezer-saviors: I don't think so. Political campaigns run on youth-power. Geriatrics aren't going to be able to mobilize like gen X/Y can.

Bill said...

Amazingruss said:

"I'm focusing on the intangibles...time to think quietly, write music, and software that has no concievable use but art. Time to walk over and hug my wife 20 times a day. Time to learn things that have no conceivable economic benefit."

What a nice outlook. You sound like the kind of person I've always admired.

John S said...

Blaming the Boomers for FDR's Ponzi scheme is absurd. Boomers will be voting well into the 2040-50s and 65 million votes is enough to get the attention of any Gen Y President.

Grinch34 said...

Thanks for the inventory numbers anony said.

I agree with amazingruss. Every generation has greedy people and good people. I believe that most of the people on this site are on the same page. We need to stick together.

Thanks again for the inventory numbers!!!

Vert said...

This is ridiculous. This article is written as if the Boomer conspired to screw the Gen X and Gen Y generation. These people have been working for 30 years or more and only think they're getting what they're worked for in the past.

Instead of zeroing in on the expenditures of the Boomers, who aren't spendthrifts as the article suggests, we should look at their expenditures. Americans are living longer and we're used to a high standards of living. The older boomers that grew up with simple lifestyles will make it work if they earned enough to save.

However, those that were in low wage jobs, lost retirement plans, have mortgage payments, were scared of investing, have small savings, and have medical problems will be in trouble. This catergory of person is probably not of the ordinary.

The upside of the Boomers is that it was easier for them to get employment without having to spend thousands on college degrees and have extremely high credentials. In the past a person with a high school degree or unrelated college degree could earn 80K to 100K after working for the same place for years. That's not likely to happen in our generation.

Our major problem is that our income cannot keep pace with our education expenses and living expenses. Employers are more cost conscious and will do almost anything to eliminate labor costs. It will be difficult for Gen X/Y to create wealth by homeownership when most of our high skilled jobs are in expensive cities that make it impossible for us to save and the suburbs are crowded too.

Gas and cars are expensive, so commuting will probably eliminate most of the extra income. We can't live like Boomers. Boomers could live in a one bedroom home on a farm with no television or Internet in the boondocks. Gen Y is so reliant on services and entertainment it will be tough for us.

Major employers that hire more than just techies need to move to new areas and reduce their concentration in over priced areas. Also, we need to question the prices being charged to seniors. I know there are costs involved in providing services and medicine but these costs are so high they need to be reduced.

If anything we need to be really nice to old people, so they will put us in their wills. We're going to need the money. Unless you're an investment banker, a professional athlete, Big Law lawyer, or surgeon among other things money is going to be tight. This is very true when your potential kids will cost a fortunate to educate whether it's actually paying for the education or moving into a good school district.

Grinch34 said...

Actually age discrimination is quite prevalent today. It used to be 55 and they would get rid of people and take away their promised pensions (look at the airlines, car manufacturers, etc.) Now age discrimination is below 45 and soon will be 40. The greedy people don't care who they hurt whether its Y, X, Boomers,depression era people or what have you. Green is the only thing that matters to them.

Anonymous said...

This blog went from cool to lame.

Anonymous said...

Ford and Obama show promise?? Give me a break. Our only hope was SS privatization which they were both against.

mas_11 said...

Ford and Obama show promise?? Give me a break. Our only hope was SS privatization which they were both against

Anonymous said...

Bill -
If you look at the age range, the Yuppies WERE boomers.

Anonymous said...

True dat. Reaganauts then, Shrubbies now.

inseattle said...

Hear! hear! Amazingruss! Yes, you understand completely and hopefully, after the economic devestation, many more will too.

And Grinch hit the nail on the head: it's not age that caused the mess here, it's attitude. Plenty of greedy, materialistic people in every generation.

Met more than a few of all ages.

Anonymous said...

I don't see why anybody admires "amazingruss". The guy is basically lazy. He says his motivation is sapped and only wants to work 3 to 4 days a week. He should take a look at his dad who worked his butt off for 25 years and raised a family. The gen xers and yers who think like amazingruss are why the US economy is losing ground. No matter how you slice it up - boomers, gen xers, yers, tweaners, there is no substitute for hard work, you reap what you sow. The guy whos writes this blog is posting sour grapes. Fact of the matter is the boomers worked harder and longer than anyone else they deserve what they earned. If gen xers would put in the hours they'll have as much or more as any boomer ever did - it might not be real estate but working for a living does pay off.

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