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Thread: Aging America heading for disaster

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    Aging America heading for disaster

    Aging America heading for disaster | New York Post

    To really understand what’s going on with the American economy, don’t look at the headlines. Don’t look at the unemployment rate or the trade balance or the deficit. Don’t even look at what’s happening today at all: Look at what happened 46 years ago.

    And what happened then? Fewer Americas were being born, points out Harry S. Dent Jr. in “The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014-2019” (Portfolio).

    Following the Baby Boom, which peaked in 1961, came the Baby Bust, a long slow decline in the birthrate. Those babies grew up and began spending in accordance with highly predictable patterns.

    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.

    Anyone find that convincing?

    Dent, a business consultant, stock-market prognosticator and author who says now is the time to sell stocks, has plucked an old argument off the dusty shelves of 1980s political rhetoric (“We’re nothing like Japan! And that’s horrible!”) and given it a new coat of paint: We’re exactly like Japan! And that’s horrible!

    Japan’s stock market is still 65% below its 1989 peak. Their spending problem (currently being given a boost by a gigantic stimulus) is really, says Dent, an aging problem.

    As the Japanese have hit their 60s and 70s, they became stingier. Artificial, forced spending like government stimulus is not going to spark real voluntary spending because that isn’t what old people do. They’ve already paid for their houses, cars and their children’s schooling. Merchants try to goose lackluster sales by cutting prices, which increases the incentive for people to save their money, expecting things will be cheaper in the future than they are today.

    That’s a deflationary spiral, and Dent sees it coming here next, and soon.

    Post-crash, the US economy has been limping along for nearly five years despite a series of massive fiscal and monetary stimuli. A principal reason for what growth we have had is the spending pattern of rich people, who tend to put off their big purchases years later in life than the average. Their peak spending year should be, according to Dent, 2014.

    And, no, immigration isn’t going to save us; even adjusted for immigration, the overall US population is aging. (Moreover, an anemic economy attracts fewer foreigners: Net new immigration from Mexico dropped to zero between 2005 and 2010).

    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.”
    Now the economic downturn is caused by old people? I guess it had nothing to do with the housing boom/mortgage crisis and "debt bubble"? Sure the older population are more financially responsible with their income, because they don't have the ability to earn it anymore.

    I'd look to other causes like banks, corporations, immigration and the government. The average person, simply can't spend what they're not making.
    Einstein, "science without religion is lame, religion without science is blind."

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    Re: Aging America heading for disaster

    Quote Originally Posted by grip View Post
    Aging America heading for disaster | New York Post



    Now the economic downturn is caused by old people? I guess it had nothing to do with the housing boom/mortgage crisis and "debt bubble"? Sure the older population are more financially responsible with their income, because they don't have the ability to earn it anymore.

    I'd look to other causes like banks, corporations, immigration and the government. The average person, simply can't spend what they're not making.
    While giving consideration to the fact that as the Baby Boomers move from the workforce to retirement, they are contributing less to the programs used in old age, and the up and coming just aren't contributing as much, many Baby Boomers also invested heavily in IRAs and 401Ks and are slowly pulling that money out for their retirement.

    While I'm not yet ready for a rocking chair, I've long since removed my money from the markets (IRA) paid my penalty and have invested with post-tax money so the government no longer has control over what I can use or penalize me for not using it correctly. I'll pay my taxes now, while I know what they are, thanks.

    I'm not the only one doing it this way. Many who saw the troubles on the horizon do so also, and are being fiscally conservative with their investing. So we take the heat for not propping up a flagging economy.
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    Re: Aging America heading for disaster

    Quote Originally Posted by GottaGo View Post
    While giving consideration to the fact that as the Baby Boomers move from the workforce to retirement, they are contributing less to the programs used in old age, and the up and coming just aren't contributing as much, many Baby Boomers also invested heavily in IRAs and 401Ks and are slowly pulling that money out for their retirement.

    While I'm not yet ready for a rocking chair, I've long since removed my money from the markets (IRA) paid my penalty and have invested with post-tax money so the government no longer has control over what I can use or penalize me for not using it correctly. I'll pay my taxes now, while I know what they are, thanks.

    I'm not the only one doing it this way. Many who saw the troubles on the horizon do so also, and are being fiscally conservative with their investing. So we take the heat for not propping up a flagging economy.
    I agree, we can't spend like we did in our thirties, when we were still pulling in salaries ($30K) comparable to today's $150K annually. And with this "no interest" policy our savings don't earn any income, nor does risking it in long term stocks and bonds. I'll be damned if I'm going to buy more of the same crap, I don't need. It's one of the reasons, I plan on "no Xmas gifts" next year.
    Einstein, "science without religion is lame, religion without science is blind."

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    Re: Aging America heading for disaster

    Quote Originally Posted by grip View Post
    Aging America heading for disaster | New York Post



    Now the economic downturn is caused by old people? I guess it had nothing to do with the housing boom/mortgage crisis and "debt bubble"? Sure the older population are more financially responsible with their income, because they don't have the ability to earn it anymore.

    I'd look to other causes like banks, corporations, immigration and the government. The average person, simply can't spend what they're not making.
    Ageism. It has started. You've seen it here on DP and you can expect to see more of in government and media.










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    Re: Aging America heading for disaster

    Quote Originally Posted by grip View Post
    I agree, we can't spend like we did in our thirties, when we were still pulling in salaries ($30K) comparable to today's $150K annually. And with this "no interest" policy our savings don't earn any income, nor does risking it in long term stocks and bonds. I'll be damned if I'm going to buy more of the same crap, I don't need. It's one of the reasons, I plan on "no Xmas gifts" next year.
    Planned obsolescence forces repurchasing of goods, no matter how well you tend to your belongings.

    While I too am in that 'no xmas gifts' time of my life, and shedding accumulated stuff, I've found there are still people who have that dear in the headlights look when told that they're plans for their retirement just got shot to hell.

    My savings account reaped a whole .004% interest this past year.
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    Re: Aging America heading for disaster

    Quote Originally Posted by Risky Thicket View Post
    Ageism. It has started. You've seen it here on DP and you can expect to see more of in government and media.
    Take our money, euthanize us and make room for the moronic, spoiled brats. If they'd treat us with respect, we might tell them how to save their sorry asses from financial ruin. We didn't get this old by being stupid.
    Einstein, "science without religion is lame, religion without science is blind."

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    Re: Aging America heading for disaster

    I don't read this as having to do with old people --- old people are the same no matter where you go. It's that we don't have a resurgence of population in the post baby boom years. The birth rate per 1,000 seemed to have peaked in the 20th century early on, in the 1940-1961 boomer years it was relatively high but has been slowly dropping. The high amount of boomers, their life expectancy of living longer, and the lowering number of births since then all sort of contribute. Do I think the OP has a valid point? Yeah... but it's not the boomers fault they were born then or living so long. I certainly do not see a resurgence of 5% growth like the 1980's or 1990's. Those days I think are well past us and yes, to a lesser extent we will see a economic decline like Japan though I think the U.S. economy can absorb some of the sharp edges if our lawmakers and politicians don't bone us unexpectedly.

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    Re: Aging America heading for disaster

    Quote Originally Posted by grip View Post
    Aging America heading for disaster | New York Post



    Now the economic downturn is caused by old people? I guess it had nothing to do with the housing boom/mortgage crisis and "debt bubble"? Sure the older population are more financially responsible with their income, because they don't have the ability to earn it anymore.

    I'd look to other causes like banks, corporations, immigration and the government. The average person, simply can't spend what they're not making.
    Aging population is something that many countries in the world are looking at now. Notably, China and Japan (economic #2,3) are having significant problems/discussions about how to deal with this looming challenge, or in the case of Japan, a clear and present danger.

    China's Aging Population | Michael Hodin

    The US doesn't have quite the same issues, but there is no doubt that the baby boomers will weigh heavily on the economy as they retire. That is simply one economic woe to consider among others.

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    Re: Aging America heading for disaster

    Quote Originally Posted by SBu View Post
    Aging population is something that many countries in the world are looking at now. Notably, China and Japan (economic #2,3) are having significant problems/discussions about how to deal with this looming challenge, or in the case of Japan, a clear and present danger.

    China's Aging Population | Michael Hodin

    The US doesn't have quite the same issues, but there is no doubt that the baby boomers will weigh heavily on the economy as they retire. That is simply one economic woe to consider among others.
    They don't know if they want us to live longer and make money from turning us into cyborgs with catheters, knee, hip implants, pacemaker/defibrillators or tell us, we can't be fixed to save money. We're all going to get old, unless they start stamping us with an expiration date. How about let's be humane and take care of the helpless (infants, disabled, sick and old) for now and try to control the making of 4+ children families? Then the population of older folks won't be any problem.
    Einstein, "science without religion is lame, religion without science is blind."

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    Re: Aging America heading for disaster

    Quote Originally Posted by grip View Post
    Aging America heading for disaster | New York Post



    Now the economic downturn is caused by old people? I guess it had nothing to do with the housing boom/mortgage crisis and "debt bubble"? Sure the older population are more financially responsible with their income, because they don't have the ability to earn it anymore.

    I'd look to other causes like banks, corporations, immigration and the government. The average person, simply can't spend what they're not making.
    It's hard to argue against the math of the Post. For sure, the boomers are retiring. We don't spend as much, because we don't make as much. OTOH, you can't ignore the peculiar genius of GW Bush, the first torturer, in having created an economic shift in negative directions. Why do we beat around the Bush instead of beating Bush?

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