The Baby Boomer Bust

Discussion in 'Politics' started by alan1, Oct 30, 2011.

  1. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    The Baby Boomer Bust​


    What is going to happen to the government when all the Baby Boomers are out of the work force? They won’t be paying income taxes anymore, will they? Well, maybe some will off of investments, but not anywhere near the amount they pay right now from their employment income.

    The Boomer generation was born between 1946 and 1964.
    Currently, the Boomer generation is at their peak of personal income and thus personal income taxes paid.
    They are also at their peak of paying into Social Security.
    They are also at their peak of paying other taxes such as sales tax, as they have immense purchasing power.
    In less than 20 years, all the Boomers will be retired. That means they will be drawing all that SS money they paid in.
    As they age, they will also be utilizing the medical care system like no other generation ever has before, If you think health care costs are expensive now, just wait until we start sucking up all those resources.
    The Boomers will be the single largest voting bloc in the US. I doubt they will vote to give up the SS and Medicare they spent most of their lives paying into.

    There is not another post Boomer generation as large as THE Baby Boomers of my generation.
    The first of the Boomers are starting to retire, the rest of us will be retired in 20 years. That means we will no longer be supplying the tax revenue that is just barely keeping this nation afloat right now. Instead, we will start taking what we have contributed (SS and Medicare). And we WILL want it back. We paid it, we will want it back.
    What is currently the largest bloc of contributors towards taxes, SS and medicare is about to become the largest bloc of recipients of SS and medicare.

    What is going to happen when us Baby Boomers stop paying and start collecting?
     
  2. Tank
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    Tank Gold Member

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    In 20 years Amexica will be a third world country
     
  3. PoliticalChic
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    PoliticalChic Diamond Member

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    "The Boomers will be the single largest voting bloc in the US. I doubt they will vote to give up the SS and Medicare they spent most of their lives paying into....Instead, we will start taking what we have contributed (SS and Medicare). And we WILL want it back. We paid it, we will want it back."

    I get it, Mounty....but what will be the view of the folks you write about, when they consider the possibility of losing it all?



    1. Entitlements are ‘mandatory ‘ spending elements of the federal budget. They are allowed to grow automatically, without time limits or fiduciary oversight. Congress gives entitlements the first claim over federal revenues. Following this, discretionary spending is determined. “Discretionary spending accounted for 35.2% of total outlays in 2009,… In 1962, discretionary spending accounted for 47.2% of total outlays and was the largest component of federal spending until the mid-1970s.” http://assets.opencrs.com/rpts/RL34424_20100222.pdf

    2. FDR, August 14, 1935, on signing the Social Security Act: “We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age,…”

    a. “The road to hell is paved with good intentions,” Saint Bernard of Clairvaux

    b. “Of 31 million people 55-64 61.9% are in the work force. Of 18 million people 65-74 23% are in the work force.” Compare to France, where only 50% work past fifty. How many people in the United States are over 50 years old in the workplace? I think this article has a typo: http://tr.im/kswp.

    3. The question here is not whether or not the intention of the SSA is beneficent, but whether or not its inception was properly vetted. The concept of a marketplace of ideas is based on the assumption that information is not buried or distorted, and all aspects of same are given access prior to acceptance of the plan.

    4. FDR, master politician, sculpted the program so it could not be whittled down by economic measures: he called the payroll taxes ‘contributions’…”We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.” Social Security Online - HISTORY, FDR Quote from Luther Gulick

    a. The implied promise was that one’s ‘contributions’ belonged to him or her, and SS was not simply a tax-funded program that could be cut…thus the designation of a Social Security Trust Fund. Of course that changed in 1983, and since then the funds have been used as general revenue.

    5. The Social Security plan was that workers would pay for retirees, and, based on actuarial tables, those who died earlier than expected would add to the fund.

    a. No one considered that life expectancy would increase?

    b. No one considered that the balance of workers and retirees might change?

    c. No one calculated the long-term costs?

    d. Ida May Fuller, the first person to begin receiving benefits, in January, 1940, when she was 65- she lived to be 100. “…worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.” Social Security Online

    e. “Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program's actuary.” Social Security in the red this year - Washington Times
     
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  4. Dragon
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    Dragon Senior Member

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    I knew someone would be along sooner or later to say something about entitlement programs, as if the problems of boomer retirement affected only that, as if this were some unique characteristic of government retirement programs instead of a general phenomenon impacting ALL retirement, no matter HOW it's funded.

    The key lies in the worker/retiree ratio and also in worker productivity. The fewer workers are supporting each retiree, the harder it is for those working; on the other hand, the higher the worker productivity (IF workers are paid in proportion to their productivity, which unfortunately isn't the case at this time), the easier the task becomes.

    This is true whether retirees are supported by government programs, private pensions, their own savings, or their families. The mechanics differ, but the effect ends up the same. So the proper conclusion is NOT that we can't afford Social Security. The proper conclusion is that we can't afford underpaid workers. Raise everyone's wages across the board to reflect the growth in productivity since 1980, and everything will be fine.
     
  5. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    Ms Chic, I don't think I have the answer to that question.

    All the facts you cite show that the SS program will eventually fail and I do believe that it is my generation (baby boomers) that will bring about that collapse.

    You wrote,
    For SS to remain solvent over the long term it is required that there be more contributors than collectors. This is similar to a ponzi scheme, and is unsustainable over time. Specifically, on point 5, even the early death of some contributors will not make the program solvent.
    I wrote another treatise concerning SS and the black people, and how SS is actually discriminatory to blacks based upon actuarial tables.

    Black Men Don’t Get Social Security​


    Well, the average black male gets no social security. It doesn’t matter how much they contribute.
    All one has to do is look at the numbers to discover this.

    For people born prior to 1955, the age to collect full social security benefits is age 66.
    The average life span for a black male born prior to 1955 is less than 60 years.

    For people born after 1959, the age to collect full social security is 67.
    The average predicted life span of a black male doesn’t exceed 67 years unless he was born after 1996.
    Somehow, I am guessing that the age to collect full social security benefits will be raised before some person born in 1996 actually reaches the current 67 year old age requirement.

    The average life expectancy for a black male born in 1970 is 60 years. We can assume that he begins earning income and paying FICA tax at 20 years of age. That means he puts 6.2% of his gross income into the system for 40 years. His employer matches that at 6.2% also. Based upon statistics, the average black male collects nothing from that 40 year contribution.

    That’s what I call a zero sum benefit for black men. Had he taken that same 12.4% and stuffed it under his mattress, his wife or children would have it.

    Here is a link to the average life expectancy for blacks and whites by gender, just in case you want to see where you fit in. Life Expectancy at Birth by Race and Sex, 1930–2007 — Infoplease.com
     
  6. Trajan
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    Trajan conscientia mille testes

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    you've got to the nub of it, in short- the government sold them (us) a bill of goods, pig in the poke, whatever applicable cliche along those lines we can assign.

    On one hand, (as a boomer myself in his 50's who will still be working for another decade minus changes NOW); they are right, they paid, they should get what the system (see: gubermint) promised them, but we both know and deep down they too, know its a fantasy.

    Heres the thing, you wanna talk about taxes?

    Get ready, because means testing in spades is on the horizon.

    My SS payments will be discounted, I won't get the max ( as it is determined now) they will tell me ( us) you have personal retirement assets that can fund your needs in lieu of the maximum, redistribution speak for you were either or (some of the following) - to smart, planned to well, or to ‘affluent’ meaning you started head of others in the game of life that you do not require your rightful share as prescripted and promised here to fore by the prgm., so you will be docked, and if you say a word, you will be branded as selfish, ( the pols will use selective income level in retirement as obama does now ala 200k/250k), it will not be palliative.

    And, medically, aside form rationing etc. we, those that are in the bracket of class warfare that will be created so as to target them for means test leveling down, will be expected and basically forced to foot way more of their own medical costs in retirement than they would have , say now or 20 years ago on a comparative basis.

    My blurb as to taxes earlier means this- this will be the greatest transfer of tax $$, (which really is supposed to be a form of insurance btw ;) ) ever , the joke being, you and your employer who paid for roughly 45 years, 12.4% and the 2.9% will be taxed retroactively, on a scale that will beggar the mind.

    Wanna talk about a walls t. rip-off, or banks? Mere piker’s, this retroactive transfer payments levy will amount to many trillions.
     
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  7. Mr. Shaman
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    Mr. Shaman Senior Member

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  8. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    I understand your point, Dragon, but I think you are mistaken.
    I'm not sure why you picked 1980 as your baseline, let me pick 1790 as mine.

    In 1790, farmers were 90 percent of the U.S. labor force. By 1900, only about 41 percent of our labor force was employed in agriculture. By 2008, less than 3 percent of Americans were employed in agriculture. The reason it now only takes 3% as opposed to the 90% is because of what you say, efficiency and productivity of the workforce. Following your logic, those 3% of farmers today should make the equivalent earnings of the 90% of 1790 agricultural labor force (They'd be a mighty damn wealthy 3% of the country). Raising the total wages of the 3% to reflect the total wages of the 90% of the past is not a viable solution.
     
  9. alan1
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    alan1 USMB Mod Staff Member Supporting Member

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    I see "means testing" as the potential solution that the government offers.
    It goes like this,

    We (the government) took 12.4% of your income for your entire working life, BUT, since you still managed to set aside (save) for yourself, we are now screwing you and you get none of it back because you were responsible.
     
  10. Trajan
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    Trajan conscientia mille testes

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    you've contradicted yourself, more than a few times.

    and this?
    this would mean that FICA collections would go up for the gov. , how is that the answer? and in addition, fewer workers would be employed down stream or more temps etc. etc.....and COSTS for those products would be raised if not, You are pushing on a balloon.
     

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