http://www.zerohedge.com/news/2014-0...hic-shock-wave
Today, more than 10,000 Baby Boomers will retire. This is going to happen day after day, month after month, year after year until 2030. It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it. We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep. Even if we didn't have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself. During the first half of this century, the number of senior citizens in the United States is being projected to more than double. As a nation, we are already drowning in debt. So where in the world are we going to get the money to take care of all of these elderly people?
The Baby Boomer generation is so massive that it has fundamentally changed America with each stage that it has gone through. When the Baby Boomers were young, sales of diapers and toys absolutely skyrocketed. When they became young adults, they pioneered social changes that permanently altered our society. Much of the time, these changes were for the worse.
According to the New York Post, overall household spending peaks when we reach the age of 46. And guess what year the peak of the Baby Boom generation reached that age?...
People tend, for instance, to buy houses at about the same age — age 31 or so. Around age 53 is when people tend to buy their luxury cars — after the kids have finished college, before old age sets in. Demographics can even tell us when your household spending on potato chips is likely to peak — when the head of it is about 42.
Ultimately the size of the US economy is simply the total of what we’re all spending. Overall household spending hits a high when we’re about 46. So the peak of the Baby Boom (1961) plus 46 suggests that a high point in the US economy should be about 2007, with a long, slow decline to follow for years to come.
And according to that same article, the Congressional Budget Office is also projecting that an aging population will lead to diminished economic growth in the years ahead...
Lost in the discussion of this week’s Congressional Budget Office report (which said 2.5 million fewer Americans would be working because of Obamacare) was its prediction that aging will be a major drag on growth: “Beyond 2017,” said the report, “CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades [due in large part to] slower growth in the labor force because of the aging of the population.”
So we have a problem. Our population is rapidly aging, and an immense amount of economic resources is going to be required to care for them all.
Unfortunately, this is happening at a time when our economy is steadily declining.
The following are some of the hard numbers about the demographic tsunami which is now beginning to overtake us...
1. Right now, there are somewhere around 40 million senior citizens in the United States. By 2050 that number is projected to skyrocket to 89 million.
2. According to the Employee Benefit Research Ins ute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.
3. One poll discovered that 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.
4. According to a survey conducted by the Employee Benefit Research Ins ute, "60 percent of American workers said the total value of their savings and investments is less than $25,000".
5. 67 percent of all American workers believe that they "are a little or a lot behind schedule on saving for retirement".
6. A study conducted by Boston College's Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.
7. Back in 1991, half of all American workers planned to retire before they reached the age of 65. Today, that number has declined to 23 percent.
8. According to one recent survey, 70 percent of all American workers expect to continue working once they are "retired".
9. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.
10. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States. Back in 2001, they only accounted for 12 percent of all bankruptcies.
11. Today, only 10 percent of private companies in the U.S. provide guaranteed lifelong pensions for their employees.
12. According to Northwestern University Professor John Rauh, the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have ac ulated is 4.4 trillion dollars.
13. Right now, the American people spend approximately 2.8 trillion dollars on health care, and it is being projected that due to our aging population health care spending will rise to an astounding 4.5 trillion dollars in 2019.
14. Incredibly, the United States spends more on health care than China, Japan, Germany, France, the U.K., Italy, Canada, Brazil, Spain and Australia combined.
15. If the U.S. health care system was a country, it would be the 6th largest economy on the entire planet.
16. When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around. Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.
17. It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.
18. At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for every single household in the United States.
19. In 1945, there were 42 workers for every retiree receiving Social Security benefits. Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.
20. Right now, there are approximately 63 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.
21. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
22. The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead. Social Security and Medicare make up the bulk of that.
So where are we going to get the money?
That is a very good question.
love these boogeyman articles, tbh
supposing that nothing is done at all to reign in cost in the long term (unlikely, IMO), getting the money isn't the problem, it's how much inflationary pressure that's going to cause.
my gut feeling is that you're not going to see this addressed until you actually see some sort of high inflation creeping in... in the meantime, the can will keep on getting kicked forward...
USA is a very wealthy country, but the 1%/corporations have compromised govt to obtain policies and actions that enrich themselves while impoverishing everybody else, iow, the horrible inequality.
How much longer can we kick the can though?
Eyup, but if economic activity falls... where will the inflation come from?love these boogeyman articles, tbh
supposing that nothing is done at all to reign in cost in the long term (unlikely, IMO), getting the money isn't the problem, it's how much inflationary pressure that's going to cause.
my gut feeling is that you're not going to see this addressed until you actually see some sort of high inflation creeping in... in the meantime, the can will keep on getting kicked forward...
20 year or so, by my guess.
Despite much alarmism, the drop dead date is still too remote for most to keep stuff like this in the foremind.
money supply
cost push, not demand pull.
energy up, food up as megacorps and speculators enrich themselves.
This is going to really shock some folks, but I honestly believe that a big part of the change will come from baby boomers not being able to retire because they won't have enough money to do so.
The working age will continue to go up, the economy will change from what is now essentially an information technology or something digital to something that we can't even yet imagine.
Let's face it…very few in 1994 could have envisioned the rate of digitization that has occurred since. Similarly, changes that appear insignificant right now will blossom into global events that will impact all of the above.
I do not suggest it is not a big problem. I really do believe that it is a big problem. I just don't think we can think in conventional ways of methodologies for 'fixing' it. But something will change.
One of those changes may well be the manner in which this society approaches death. At some point we have got to stop forcing people to try to put off death regardless of how much they are in pain, how much they have lost any quality of life, how much they are exhausting their own and their families' resources to no good end. That will be a sea change for a society that says "any kind of life is better than any kind of death", that says that no one can end their own life or help another end theirs without great societal approbation, and that puts moral values on all of these things.
That's what I mean by the kind of changes that we cannot even imagine right now. (except for folks in states like Oregon or Washington, etc. etc.)
We aren't gonna have the health care our parents had. I don't think we have to worry about living to 95. My dads 94 and there is no telling how much medicare has spent on him. Well into the millions. , they just fixed a hernia today. All he can do is sit in his Lazyboy and at my mom and then get on his scooter and go to the table/bathroom/bed/car to be driven around. No way we are gonna get the heart surgeries, knee replacements, dozens of other minor surgeries he got when it's our turn.
Absolutely!! But that is part of the change that I believe is coming…I believe that people like us look at what you are describing (or what happened to my brother before he passed) and say "It is just irrational to do this any more". Right now I think that people like you and I are not in the majority. But I believe that within the next 20 years, our at ude will be considerably more prevalent. I don't plan on being here to see it if it involves a potload of medical expenses. I just won't put up with them.
I just wish people would take the 10,000 baby boomers will retire each day into consideration when they winch about people leaving the labor pool concerning the labor reports.
I've seen some stats that say that approximately 80% of a person's lifetime medical expenses are incurred in the last 6 months of their lives. That is some kinda crazy, ya know? I mean, what that says to me is that everybody already knows that it is terminal, and they just prolong the death process until all the medical expenditures that can be made have already been made, and the poor shmuck who is dying is miserable the whole time.
I think the US price bubble on healthcare will eventually pop.
nah, health care SYSTEM has Americans by the short and curlies with one hand, and picks their pockets with the other.
the health care system will bankrupt the USA, and is well on its way, before it will cut its prices.
want health care? bend over
As I've said many times, no-profit govt universal health insurance + no-profit govt health providers as compe ion to the for-profit ripoff racket is the only way.
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