Monday, October 08, 2012

who destroyed the economy: the case against the baby boomers

theatlantic | My father taught me how to throw a baseball and divide big numbers in my head and build a life where I'd be home in time to eat dinner with my kid most nights. He and my mother put me through college and urged me to follow my dreams. He never complained when I entered a field even less respected than his. He lives across the country and still calls just to check in and say he loves me.

His name is Tom. He is 63, tall and lean, a contracts lawyer in a small Oregon town. A few wisps of hair still reach across his scalp. The moustache I have never seen him without has faded from deep brown to silver. The puns he tormented my younger brother and me with throughout our childhood have evolved, improbably, into the funniest jokes my 6-year-old son has ever heard. I love my dad fiercely, even though he's beaten me in every argument we've ever had except two, and even though he is, statistically and generationally speaking, a parasite.

 This is the charge I've leveled against him on a summer day in our Pacific Northwest vision of paradise. I have asked my favorite attorney to represent a very troublesome client, the entire baby-boom generation, in what should be a slam-dunk trial--for me. On behalf of future generations, I am accusing him and all the other parasites his age of breaking the sacred bargain that every American generation will pass a better country on to its children than the one it inherited.

We are sitting on a beach in late afternoon on a sun-drizzled lake in the Cascade Mountains, two college-educated, upper-middle-class white men settling in for a week of generational warfare. My son, Max, splashes in the waves with his grandmother; sunbathers lounge in inner tubes around us; snow-capped peaks loom above the tree line. The breeze smells of Coppertone and wet dog. My father thinks back on the country that awaited him when he finished law school. "There seemed to be a lot of potential," he says, setting up the first of many evasions, "but there weren't a lot of jobs."

I'm mildly impressed that he's even bothering to mount a defense. The facts as I see them are clear and damning: Baby boomers took the economic equivalent of a king salmon from their parents and, before they passed it on, gobbled up everything but the bones.


Ultimately, members of my father's generation--generally defined as those born between 1946 and 1964--are reaping more than they sowed. They graduated smack into one of the strongest economic expansions in American history. They needed less education to snag a decent-salaried job than their children do, and a college education cost them a small fraction of what it did for their children or will for their grandkids. One income was sufficient to get a family ahead economically. Marginal federal income-tax rates have fallen steadily, with rare exception, since boomers entered the labor force; government retirement benefits have proliferated. At nearly every point in their lives, these Americans chose to slough the costs of those tax cuts and spending hikes onto future generations.

The Dow Jones industrial average rose twelvefold from the time the first boomers began working until last year, when they began to cash out their retirement. (The growth trend over the 12 years since I entered the workforce suggests that the Dow will double exactly once before I retire.) They will leave the workforce far wealthier than their parents did, with even more government promises awaiting them. Boomers will be the first generation of retirees to fully enjoy the Medicare prescription-drug benefit; because Social Security payouts rise faster than price inflation, they will draw more-generous retirement benefits than their parents did, in real terms--at their children's expense. The Urban Institute estimated last year that a couple retiring in 2011, having both earned average wages, will accrue about $200,000 more in Medicare and Social Security benefits over their lifetimes than they paid in taxes to support those programs.

Those retirees and near-retirees bequeath a shambles to their offspring. Young people are unemployed at historically high levels. Global competition is stronger than ever, but American institutions have not adapted to prepare new workers for its challenges. Boomers have run up incomes for the very wealthiest Americans, shrunk the middle class, and, via careless borrowing and reckless financial engineering, driven the economy into the worst recession in 80 years. The Pew Research Center reports that middle-class families today are 5 percent less wealthy than their parents were at the same point in their lives, after adjusting for inflation, even though families today are far more likely to include two wage earners. Another Pew report shows that those ages 55 to 64 are 10 percent wealthier today, even after the Great Recession, than Americans of that age bracket were in 1984. Those younger than 35 are 68 percent less wealthy than the same bracket was in 1984.

15 comments:

Big Don said...

If you removed all the last 50 years of dysgenic IQ-75 breeding, and resource commitment to support those patheic useless-eating LOOZerz, and prosecute their crimes, the system would still be healthy. All that squandered funding could have gone into research for new technology and resulting profitable good-job-producing business. Now that the LOOZerz and their sympathizerz are a political majority, the future is hopeless....

CNu said...

rotflmbao...., do you cover your mouth, ears, and eyes when you intone these and magical thinking "speak no, hear no, see no evil" mantras?

The War on Poverty entitlements don't comprise 1% of what's squandered on DoD and wrinkled-up old raisin entitlements. The War on Drugs is a make-work project that you DoD and old-raisins came up with and perpetrated on the rest of us.

You and your'n made the future hopeless by your neurosis, profligacy, belligerence, magical thinking and incompetence.

umbrarchist said...

Blaming things on Baby Boomers without blaming the economists makes no sense.

How many people can figure out when the experts are lying about a complicated subject while being bombarded with tons of mostly worthless information?

Big Don said...

Don't forget "Every LOOZer Gets a House" programs and the derivatives racket sprung from that, damaging the world economy, forcing the banks and GM bailouts. Also Brown vs. Board dumbing down all the public schools and trashing the learning environment trying, still unsuccessfully, to get all outcomes to be equal regardless of the huge resources squandered on the schools. And there's funding for prosecuting and housing 2M prisonerz who will never ever be productive...Then you have Sec8, SSI, EBT, ADC, Medicaid, et al all abused primarily by the LOOZer class. And the resources polite society expends just to protect themselves from the LOOZerz...Oh yes, *Detroit* and similar venues...Gerrymandering IQ-75 idiots into Congress, the White House, and SCOTUS... Am sure there's stuff BD has left out...The total impact is much more than a few entitlements....

CNu said...

lol, the total impact of all of that is still less than 1% of the sheer wastage involved with funding the DoD and the non-productive dotage of useless old raisins.

Tom said...

Here BD is in the mainstream, top 40 all the way. Actually looking at where the Federal budget actually goes just isn't where it's at. Squares like you will never dig it.

Big Don said...

DoD employs productive people, produces spinoff technologies good for economic health, and protects your whiney azz - Priceless...Money well spent. (and in the previous BD comment, include No IQ-75 LOOZer-Child-Left-Behind and Free School Breakfasts and Lunches programz....)

CNu said...

rotflmbao@whiney azz.....,

Lorenz Gude said...

I don't think it is just the Baby Boomer generation - but i do think something bad happened to America since WW2: we have been so rich that inefficiencies have crept into many areas of our life. For example our health care costs 16% of GDP, while Australia's come in at about 8.5% and produces slightly better outcomes. Government, corporations, universities all have grown fat and happy, but the music has stopped. Iy ain't gonna be pretty.

CNu said...

On a per capita basis USonians use(squander) ~12,000KW - whereas the Swiss use 5000KW with a national goal of using only 2000KW with no corresponding loss in quality of life. http://subrealism.blogspot.com/2007/11/goal-state-2000-watt-society.html

If there's a bright side/upside to our predicament, we have a loooooong way to go and nowhere to go but up. How depressing that our incumbent president had a bully pulpit from whence to inject this message and this aim into the public consciousness, but absolutely and categorically failed to do so.

Tom said...

BD my comment was that most people -- like you -- have no idea what the really big components of the federal budget really are. 'Welfare' and 'social programs' are more or less zeroed out already.


Re your comment on tech subsidies via military spending.* We could have had modern wireless and microprocessor technologies a lot cheaper if we hadn't subsidized them in such an incredibly inefficient way -- that is, by building an idiotically large "national security" establishment that is now taking front teat to everything else.


*I guess that's your point? Or were you degenerating into frank "them people spend their whole paycheck on wide-screen" mudslinging without realizing that you're on the wrong end of it?

Tom said...

I don't feel that "inefficiencies have crept in" I feel that for several generations now we've been flat-out idiotically, childishly wasteful. Proudly wasteful, like a 3 y/o who won't stop eating his halloween candy. Not with natural resources in particular, with our entire birthright. Look at what a lot of people spend on cars.

CNu said...

http://youtu.be/AwRMR-fsHeg

ken said...

'Welfare' and 'social programs' are more or less zeroed out already...

It looks like if we accept your math, most of the components of the budget are pretty close to being zeroed out.
http://www.usgovernmentspending.com/total_spending_2011USrn

DD said...

Well, in my twenties I angrily made this baby boomer argument all the time, to those who would listen.

In my thirties, I've come fully around to Sensei Hypertiger's viewpoint, that we are all just feeding the equation, as the only alternative to feeding the beast is collapse, and if you can keep climbing, the fall can be delayed. After all, even the mighty PowerKitty predicted it would explode in 2006, and here we are 6 years later.

Of course, the fall will be even greater, but it was always going to kill us anyway, so we might as well keep going until we can't anymore.

Self-immolation might be righteous but it does probably hurt.

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