Posts Tagged ‘employment’

It was inevitable.  For the past forty or fifty years a bulge in the U.S. population, known as the Baby Boomers (because they were born in the aftermath of World War II) created a moving spike in the U.S. economy. This huge group of people needed more schools, and more schools were built.  They needed more cars, and more cars were built.  They needed more houses, and more houses were built.  The economic expansion of the past forty years probably owes as much to the presence of this market as the effects of the Second World War itself.  However, as an ancient philosopher once said, “This too shall pass”.  And so it is. The age of the Boomers is coming to an end; they are beginning to retire and exit the productive economy.

And that is the problem.  As more and more Boomers retire every day and apply for the Social Security benefits they have earned, the Social Security system is beginning to draw down its reserves.  Like any good pyramid scheme, Social Security depends upon an ever growing number of contributors in order to pay out its dividends.  It isn’t designed to cope with a population bubble – at least not the backside of the bubble, which is where we are now.  Social Security is going into the red. More and more Boomers are about to be collecting Social Security while fewer and fewer people are paying into it.

This, however, isn’t the only problem.  Think about health care. Many Boomers will be looking at Medicare as their source for health insurance – and why not? They paid into it for most of their lives, now it’s time to collect, right?  Yes, but.  You see, Medicare is another government Ponzi scheme, and it only works when the number of contributors is increasing.  Boomers, who can look forward to a life expectancy much greater than their parents, may face a future where they have to get by on meager Social Security payouts and meager health benefits.  The generation that brought us the mass demonstrations against the Vietnam war, the mass protests against racial discrimination, and the sexual revolution are unlikely to take this lying down, especially since they are much more physically fit than their parents were at this age.  Expect to hear from them.

Which brings me to another point.  Many of the Boomers who are applying for Social Security are doing so because they are being forced out of the job market – a job market that has become extremely tight due to the Global Recession.  Even before the recession began many employers had clandestine (and illegal) programs in place to get rid of the highly paid Boomers so they could replace them with lowly paid young people who had just graduated from universities.  That’s just how our capitalistic system works.  It happens to everyone when they get older, you get moved out – it’s nothing personal.  In a strong economy, the Boomers who were forced into early retirement from their jobs might have just gone somewhere else – but not today.  There is no place for many of them to go.  So…it’s time to kick back, relax, and collect Social Security and Medicare benefits! The problems is that it won’t last long – certainly not until the Boomers reach their 90’s or even 100 years old.

If we had a robust economy and more enlightened capitalists – the Captains of our Industry, we would find that the economy would adapt and jobs would appear for these redundant Boomers, and they would still be productive, paying taxes and not collecting benefits.  But our economy is anything but robust and our Captains of Industry are mostly devoid of imagination.  The result is a looming crisis that any half-intelligent person can see coming, which explains why it is invisible to our government.  Wait a while – maybe a year or two – then watch what happens. We’ll have a sudden crisis because we don’t have anymore money for Social Security or Medicare and besides that with the Boomers no longer paying massive income taxes from their high-paying jobs we’ll have a huge run up in our national debt, which will devalue the dollar, and thus plunge the nation into a new financial crisis.

And it will all be a big surprise as the Baby Boomers churn by, like a gigantic supertanker. The economy of the nation will heave sickeningly and maybe even capsize as it is caught by surprise by another enormous financial tsunami – the wake the Boomers leave as they pass by.

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