The American Dream (Link) (December 29, 2010)
Do you hear that rumble in the distance? That is the Baby Boomers - they are getting ready to retire. On January 1st, 2011 the very first Baby Boomers turn 65. Millions upon millions of them are rushing towards retirement age and they have been promised that the rest of us are going to take care of them. Only there is a huge problem. We don�t have the money. It simply isn�t there. But the millions of Baby Boomers getting ready to retire are counting on that money to be there. This all comes at a really bad time for a federal government that is already flat broke and for a national economy that is already teetering on the brink of disaster.
So just who are the Baby Boomers? Well, they are the most famous generation in American history. The U.S. Census Bureau defines the Baby Boomers as those born between January 1st, 1946 and December 31st, 1964. You see, after U.S. troops returned from World War II, they quickly settled down and everyone started having lots and lots of babies. This gigantic generations has transformed America as they have passed through every stage of life. Now they are getting ready to retire.
If you add 65 years to January 1st, 1946 you get January 1st, 2011.
The moment when the first Baby Boomers reach retirement age has arrived.
The day of reckoning that so many have talked about for so many years is here.
Today, America�s elderly are living longer and the cost of health care is rising dramatically. Those two factors are going to make it incredibly expensive to take care of all of these retiring Baby Boomers.
Meanwhile, the sad truth is that the vast majority of Baby Boomers have not adequately saved for retirement. For many of them, their home equity was destroyed by the recent financial crisis. For others, their 401ks were devastated when the stock market tanked.
Meanwhile, company pension plans across America are woefully underfunded. Many state and local government pension programs are absolute disasters. The federal government has already begun to pay out more in Social Security benefits than they are taking in, and the years ahead look downright apocalyptic for the Social Security program.
If we are not careful all of these Baby Boomers are going to push us into national bankruptcy. We simply cannot afford all of the promises that we have made to them. The following are 16 statistics about the coming retirement crisis that will drop your jaw.....
Companies all over America have been dropping their pension plans in anticipation of the time when the Baby Boomers would retire. 401k programs were supposed to be part of the answer, but if the stock market crashes again, it is absolutely going to devastate the Baby Boomers.
State and local governments are scrambling to find ways to pay out all the benefits that they have been promising. Many state and local governments will be forced into some very hard choices by the hordes of Baby Boomers that will now be retiring.
Of course whenever a big financial crisis comes along these days everyone looks to the federal government to fix the problem. But the truth is that after fixing crisis after crisis the federal government is flat broke.
At our current pace, the Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.
But our politicians just keep spending money. In order to pay the Baby Boomers what they are owed the federal government may indeed go into even more debt and have the Federal Reserve print up a bunch more money.
So in the end, Baby Boomers may get most of what they are owed. Of course it may be with radically devalued dollars. Already we are watching those on fixed incomes being devastated by the rising cost of food, gas, heat and health care.
What is going to happen one day when prices have risen so much that the checks that our seniors are getting are not enough to heat their homes?
What are we going to do when those on fixed incomes are buying dog food because it is all that they can afford?
We are rapidly reaching a tipping point. As the first Baby Boomers retire the system is going to do okay. But as millions start pouring into the system it is going to start breaking down.
No, there is not much that we can do about it now. We should have been planning for all of this all along. Americans should have been saving for retirement and governments should have been setting money aside.
But it didn�t happen.
Now we pay the price. �
America ~ Economic Crisis