The first baby boomer has officially filed her paperwork for Social Security. This event signifies the beginning of the end. A whole generation of naval-gazing baby boomers who thought they were entitled, are going to find out that the entitlement programs aren’t worth the paper they were written on.
We are about to see a lot of people scramble to live the best life that they possibly can on a smaller amount of income than they have ever lived on before. They didn’t save, neither did they raise their kids with a sense of responsibility to take care of them in old age.
The government realistically can’t help very much. Politicians and institutions will break their promises (by drastically cutting benefits), and they will raise taxes (which will eventually harm the economy) and even if doesn’t break the economy, there’s no way of ‘growing’ our way out of this one.
Don’t believe me? Read: “America’s Fiscal Future: A Call for Citizen Involvement” by David M. Walker, Comptroller General of the USA. It is a wake up call. A quote: “We aren’t going to close our fiscal gap through strong economic growth, massive spending cuts, or huge tax increases. The gap is simply too great, and the math and politics don’t work.”
Atlas Shrugged by Ayn Rand
If Mr. Walker is right, Atlas Shrugged might very well occur. The producers within society, weary from the taxation and constant nagging of the entitlement junkies, will cast off their burden and move to another country. It is already happening… with some well heeled folks already getting dual citizenships to places like Australia and Costa Rica.
I wonder if there will be a massive move toward changing the value system along-side the exodus to John-Galt-land. Maybe some sort of shuffling of American values such that individualism is downplayed and communal living (resource pooling) is thought more highly of. This would make people’s lives better even though they are poor. And the baby boomers can harken back to their flower-child, hippie, utopian roots.
Bull’s Eye Investing: Targeting Real Returns in a Smoke and Mirrors Market by John Mauldin
MAS leans more toward the efficiency theory cited in John Mauldin (Bulls Eye Investing, page 137. There is a knowledge gap combined with a population gap (there are simply fewer Gen X-ers and those GenX-ers don’t have the wisdom of years of business knowledge.) If the Boomers just take some anti-depressants and trudge to work a few more years, then go home to 200 stations of cable TV, then everything will work out. As for the inevitable inefficiencies along the way? Well, they can be exploited by enterprising Gen X-ers like us.
So which will it be, Bulls Eye Investing or Atlas Shrugged?
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