HousingPANIC Stupid Question of the Day

Sadly, how screwed are the retiring Baby Boomers who counted on the proceeds from their house to fund their retirement?

Bonus Question: Will there be some sort of Baby-Boomer-Bailout to make up for the shortfall in savings (you know, one more AARP big wet kiss)?

Comparing results from the biennial University of Michigan Health and Retirement study, researchers found that, excluding home and business equity, 51- to 56-year-olds hold less wealth than the same age group did in 1992.

"These boomers look richer, but a lot of that wealth is because one asset [their house] revalued," says co-author Annamaria Lusardi, a professor of economics at Dartmouth. "Excluding housing, people have very little in other wealth components."

It's GenX/GenY versus the Baby Boomers, Round 1 (XY vs. BB). Let's Get It On!

The next twenty years will be defined not by the battles between Christians vs. Muslims, Dems vs. Reps or Coke vs. Pepsi.

No, it'll be the epic financial and cultural battle between GenX/GenY and the Baby Boomers that will dominate from this point forward. With the first Boomers retiring, America $50 Trillion in debt and growing, GenX/GenY unable to afford a home, and the country facing the complete destruction of its manufacturing base, the battle has begun whether you see it or not.

By the way, I've got my money on the Baby Boomers winning this battle. X/Y are just too damn lazy, clueless and uninterested to compete against the greediest and most self-interested generation of all time. But if the Baby Boomers win this battle, America will become insolvent, and the Boomers kids and their kids and the idiots who bought US bonds will be left holding the bag.

The housing crash is just the start. If X/Y don't buy the depreciating homes of the Boomers, who based their retirements on that one asset (and X/Y keeping the entitlements Ponzi Scheme going), then the battle will have been joined.

X/Y vs. BB - Let's get it on.

In 2030, as 77 million baby boomers hobble into old age, walkers will outnumber strollers; there will be twice as many retirees as there are today but only 18 percent more workers.

How will America handle this demographic overload? How will Social Security and Medicare function with fewer working taxpayers to support these programs?

According to Laurence Kotlikoff and Scott Burns, if our government continues on the course it has set, we'll see skyrocketing tax rates, drastically lower retirement and health benefits, high inflation, a rapidly depreciating dollar, unemployment, and political instability.

Baby Boomers and the Insolvency of the United States of America

So Baby Boomer leaders weren't reckless with the finances of America some would say. Uh, who was it that rang up $50 Trillion in debt and liabilities and took the US to the brink of insolvency?

Hint - it wasn't GenX/Y. We're just stuck with their tab.

I don't blame every baby boomer. Lots of fine folks in that group, and lots of boomers who are sick of their own corrupt leaders. What I blame is a generation of Baby Boomer leadership who knowingly put policies into place that raided the treasury of the US at the expense of future generations. Their day is nearly done. And GenX/Y is gonna be pissed.

From the US Comptroller's Financial Report of the United States of America that nobody bothers to read but everyone should:

Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000.

As this long-term fiscal imbalance continues to grow, the retirement of the “baby boom” generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008.

Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.

Ignorance is not bliss folks. How many Americans realize that we're $50 Trillion in debt? Answer - probably 1/100,000. The media doesn't report it, the Baby Boomer congressmen don't own up to it, and nobody bothers to research and read. But there it is right there, from the Government Accounting Office itself.

We're $50 big ones in the hole, and besides revving up the printing presses, drastically slashing spending or raising taxes through the roof, there's no feasible way out of it.

Bottom Line: The Baby Boomer generation screwed America, and it's GenX/Y's time to get into power, rise up, and try to clean up their mess before it's too late. Or will GenX/Y get into power and try to pass the bill along to GenZ?