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Old 11-10-2013, 11:48 PM   #21
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Somehow, I suspect that the mechanisms we use for providing care and support for the elderly may change in the future, much like how other labor intensive tasks of 100 years ago have changed since then.

Could be anything from robotics to replace labor intensive care, to regenerative medicine to enable the elderly to care for themselves (when not windsurfing or playing volleyball...)
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Old 11-10-2013, 11:58 PM   #22
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Perhaps, but it takes investments. I do not see any happening. Right now, we can barely afford to keep ourselves alive with what it costs for healthcare. I cannot find that link again, but it said that while the Republicans said Medicare will be bankrupt in 2018 (IIRC), the Democrat said 2024. Either date is not assuring.

Yes, we need more geezers to be healthy enough to be beach bums. And hopefully, when it's time for these active geezers to "go", they go fast.
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Old 11-11-2013, 05:16 AM   #23
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What's needed is a change in the way things are accounted for. For example, the OP posited that productivity needed to be increased, but the reality is the productivity works against long-term sustainability of the system since it concentrates wealth into smaller and smaller circles. What's needed is a broader foundation for the economy, where people are better able to pay their own way, and that requires more of the workers in society working living wage jobs, which is counter to greater productivity, which achieves greater results with fewer workers.
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Old 11-11-2013, 11:24 AM   #24
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So how does a new (or about to be) retiree react to these demographic challenges ?

It seems inevitable that much higher taxes, much lower benefits, lower growth and (perhaps much) higher inflation will result from the demographics. These challenges will dampen what we might expect out of our portfolio and the lifestyle that it will provide.

It just seems that the future outlook is somewhat dim compared to what we have known over our lifetimes.
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Old 11-11-2013, 11:28 AM   #25
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We all know that projecting recent past results into the future entails risk. This article asks an important question: will society have the productivity increases to support more retirees? Long term I believe there will be painful adjustments.

oftwominds-Charles Hugh Smith: Can We Support 75 Million Retirees in 2020?
Who is Charles Hugh Smith? What are his biases? What is his agenda?

These are the questions I generally ask myself before reading these articles. I notice he has plenty of pictures of himself and also lots of advertising. Books titles like "Why Things Are Falling Apart" sound dumb. I'm skeptical. Is this another gloom and doom guy trying to make a buck on people's fears?
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Old 11-11-2013, 02:06 PM   #26
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... the productivity works against long-term sustainability of the system since it concentrates wealth into smaller and smaller circles. What's needed is a broader foundation for the economy, where people are better able to pay their own way, and that requires more of the workers in society working living wage jobs, which is counter to greater productivity, which achieves greater results with fewer workers.
This brings back to memory an anecdote told by my mother after her visit to Singapore in the early 70s. A thing that stuck in my mind was that they decided not to install parking meters, but to use elderly people to monitor parked cars and to write citations. They did that to give old people something to do to make a bit of extra money. Of course the parking situation may not be the same anymore.

I did not think the above made sense, but now see the reason behind it. If the gummint is to give old people financial assistance, might as well get them to do something. The work will boost their self-esteem, and not make them feel degraded for receiving free money.
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Old 11-11-2013, 02:24 PM   #27
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It just seems that the future outlook is somewhat dim compared to what we have known over our lifetimes.
That's to the expected given that the nation has been capitalizing on unique aspects which aren't unique anymore because other nations have learned all our tricks by watching us. We're sharing the wealth of the world with a greater portion of the world now.
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Old 11-11-2013, 05:53 PM   #28
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...It seems inevitable that much higher taxes, much lower benefits, lower growth and (perhaps much) higher inflation will result from the demographics. These challenges will dampen what we might expect out of our portfolio and the lifestyle that it will provide...
Demographic tidal changes are tough to combat.

One thing about being ER'ed is that one has time to ponder about world's problems, even after all that time fooling around and thinking of new culinary exploits. So, I thought a bit about the following fact about Japan, the nation leading the world down this geriatric slope.

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Originally Posted by NW-Bound View Post
...
By 2025, one in three citizens in Japan will be 65 or older, up from 12 percent of the population in 1990...
...
CountryMedian ageLife expectancy
Japan44.683
Germany43.781
Canada40.782
US36.978
China35.276
Brazil30.574
Vietnam27.475
Mexico26.775
Suppose the US is in the same situation as Japan. How do we support our retirees?

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...The average SS benefit is around $15K a year...
The median personal income, not household income, of US full-time workers of the age 25-64 was $39.5K in 2006. What tax would we need for the SS fund to stay solvent?

Out of 3 people, one is already retired, so that leaves us with 2 between the age of 0 to 64. Not all can be working, so if we take out the age group 0 to 18, that leaves us with 1.44 workers. The SS tax would have to be $15K/($39.5K x 1.44) = 0.26

That 26% tax is more than double the current 12.4% (employer+employee) SS tax. Ooops, I forgot that out of the 1.44 workers, I need to subtract out people who do not work, such as housewives and disabled people, and also people who ER'ed.

So, suppose only 75% of the age group 18-64 works. Then, we are down to 1.08 workers. Uh Oh!

The SS tax now jumps to 35%, or 17.5% for employee portion. That's a tax of $6.9K (employee only) SS tax. On top of that, we need to get the workers to pay for healthcare for the retirees too. Let's say our retiree needs $6K in medical costs. Divided into 1.08 workers, then that's another tax of $5.6K. So, our worker brings home $39.5K-$6.9K-$5.6K = $27K.

Is our 1.08 worker is going to be mad that out of his $39.5K he only brings home $27K? And that he has to support the other 1.92 non-worker?

PS. Oops again. I forgot that all of the 1.92 non-workers need healthcare and other benefits, not just the 1 retiree!
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Old 11-11-2013, 06:14 PM   #29
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What tax would we need for the SS fund to stay solvent?
If you want to look at it from a total economy funding issue, then I certainly don't have all the answers but I'd move back the SS age, cut military spending by two thirds, remove the earnings cap on SS, go back to the post World War II income tax rates, install universal health care, make the minimum wage a living wage, close the loopholes on corporate income tax evaders, do away with prescription drug patents and advertising, encourage urban gardening, build more low cost senior housing, increase immigration levels, install SS means testing for all households with more assets than mine, let expat retirees have Medicare benefits, and make more alternative health treatments, like herbs and yoga, mainstream medical treatments.

If that doesn't do it let me know and I'll think of some more ideas.
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Old 11-11-2013, 07:57 PM   #30
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Ummm... So did anyone think that the $30K/yr proposal made by D.L.J. in the subject article could work?
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Old 11-11-2013, 08:05 PM   #31
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Suppose the US is in the same situation as Japan. How do we support our retirees?
I think that is a misleading way to frame it. At least most retires have worked a long time and contributed much. Our steadily shrinking working population supports many people who have never worked, and never intend to work. Our difficult ratio is workers to non-workers, and it is very misleading to pretend that all or even most non-workers are retirees. Plenty grandparents contribute big to the work of the household, though among people born in America it is no longer a popular way to live. Still popular among immigrants from less prosperous European nations, and many Asians.

My Mother's mother moved in with our 4 child family when her husband died and the farm was sold, and she stayed with us for many years until she died. She was never my favorite person, but she worked non-stop baking, ironing, child care, playing board games with the kids. She was more productive than many people who hold jobs, and certainly more productive than any of the many people who don't bother to work, or don't know how to do anything that is not criminal.

Ha
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Old 11-11-2013, 09:58 PM   #32
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Suppose the US is in the same situation as Japan. How do we support our retirees?
We just let in more immigrants of working age. I think this would be very difficult to do in Japan but easy for the US.
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Old 11-11-2013, 11:48 PM   #33
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Originally Posted by daylatedollarshort View Post
If you want to look at it from a total economy funding issue, then I certainly don't have all the answers but I'd move back the SS age, cut military spending by two thirds, remove the earnings cap on SS, go back to the post World War II income tax rates, install universal health care, make the minimum wage a living wage, close the loopholes on corporate income tax evaders, do away with prescription drug patents and advertising, encourage urban gardening, build more low cost senior housing, increase immigration levels, install SS means testing for all households with more assets than mine, let expat retirees have Medicare benefits, and make more alternative health treatments, like herbs and yoga, mainstream medical treatments.
That's an interesting list. Having committed to this topic so far - I do not know yet if this is a good idea, but so far it's an interesting intellectual exercise for an armchair social policy maker - I gave it some thoughts.
Quote:
I'd move back the SS age
That would help a lot, but I do not think people would like that.
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cut military spending by two thirds,
Fine by me.
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remove the earnings cap on SS,
We may go that way eventually to raise more money. How much that helps, I do not know.
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go back to the post World War II income tax rates,
Meaning 94% top tax rate? Who would want to work if he keeps only 6c on the dollar. Many posters here, myself included, got sick of work although we were taxed nowhere near that. Let's not forget that entrepreneurs who make millions of dollars also create jobs for others. If we tax them too much, they'll quit and we lose. If taxes created prosperity, we would see some highly-taxed European countries doing a lot better than the US.

There are other ways to raise taxes too. How 'bout taxing home price gains? Well, just because one sells a house in an expensive area to move to a lower cost area for retirement does not mean that it should be a tax-free gain. Tax them all!

Quote:
install universal health care,
If that means extending Medicare-like benefits to everybody while not knowing how to cut cost, we would bankrupt the US in a few years. Just Medicare for geezers is enough trouble right now.

Quote:
make the minimum wage a living wage,
Note sure if it really helps, if there are not enough workers.

The minimum wage in the US is US$15K/yr. Australia sets its minimum wage at US$33.3K, and the purchasing power is US$21K. In Japan, it's US$17K/yr, yet due to the higher cost of living, the purchasing power is only equivalent to US$11.5K.

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close the loopholes on corporate income tax evaders,
I do not know enough here to comment.

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do away with prescription drug patents and advertising,
I do not know about advertising, but if people do not get rewarded for finding new drugs, they would just go into ER, and we have no new drugs. Maybe that works out best. No more expensive drugs (save on costs), and no more life expectancy improvement (save on costs again).

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encourage urban gardening,
There's nothing to stop them now. People just don't wanna, and just want to drink Coke, eat potato chips, and watch TV.

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build more low cost senior housing,
If and when more people want them, they will get built. For example, there are many enclaves of retire communities in Florida and Arizona where the homes are smaller and less expensive to maintain. Government housing projects have not worked out well.

By the way, for vacation we once stayed for a week in a vacation property built with park model homes. We had never been in one, and were amazed that these little homes were so comfortable. Though they were small, as they did not skimp on the quality of the furniture, the kitchen appliances and the bathroom, the small homes did not feel cheap at all. And they are actually more roomy than some tiny apartments or condos in some US cities.

My wife and I agreed that this would be all a retired couple would need. No room for guests, but we could have 2 of these and still save a lot of money over a regular home.

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increase immigration levels,
As long as we do not create policies that scare them from coming, like taxing them to death.

People from third-world countries would migrate to a developed country regardless, but if you want to attract more skilled workers, it's better not to make the US into the same place they are trying to get away from.

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install SS means testing for all households with more assets than mine,
What's your asset level? People would need to know that to see how theirs compare, to see if they could support this proposal.

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let expat retirees have Medicare benefits,
At first, I thought I'd like this. Say, if a US citizen can get a colonoscopy in another country for $200, while it costs $1000 here, why should Medicare not reimburse the $200, and in fact should encourage it?

Then, I thought about how we could control fraud overseas that would be committed by unethical clinics and phony doctors. And then, what's to keep Mr. Jones from colluding with an overseas clinic to claim $1M for a gazillion surgeries and cancer treatments of all sorts that were not done? We cannot even control fraud committed right here in the US.

Low medical costs overseas work only because the private US citizen has to pay out of his own pocket. When OPM (Other people's money) is involved, all sorts of waste and fraud would automatically occur.

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and make more alternative health treatments, like herbs and yoga, mainstream medical treatments.
Fine with me if it costs less. If it fixes the ailments, great. If it kills the patients, well, that's good too.
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Old 11-11-2013, 11:51 PM   #34
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Ummm... So did anyone think that the $30K/yr proposal made by D.L.J. in the subject article could work?
Why stop at $30K? Let's go to $100 trillion dollar, like this Zimbabwe bill.

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Old 11-11-2013, 11:54 PM   #35
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I think that is a misleading way to frame it. At least most retires have worked a long time and contributed much. Our steadily shrinking working population supports many people who have never worked, and never intend to work. Our difficult ratio is workers to non-workers, and it is very misleading to pretend that all or even most non-workers are retirees. Plenty grandparents contribute big to the work of the household, though among people born in America it is no longer a popular way to live. Still popular among immigrants from less prosperous European nations, and many Asians.

My Mother's mother moved in with our 4 child family when her husband died and the farm was sold, and she stayed with us for many years until she died. She was never my favorite person, but she worked non-stop baking, ironing, child care, playing board games with the kids. She was more productive than many people who hold jobs, and certainly more productive than any of the many people who don't bother to work, or don't know how to do anything that is not criminal.

Ha
In the old days, many domestic workers like housewives contributed as you described, although their work was not measured and reflected in the GNP. Nowadays, people live alone, and everybody needs some entitlements, even people who never work. Even in Japan and China, young people do not want to have parents living with them. Time has changed all around the world.
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Old 11-12-2013, 12:07 AM   #36
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I must say you are a good sport NW-Bound. I think you gave my ideas a lot more thought than I did.

You had a good point about medical care and fraud overseas, but it would encourage retirees to move to ex-pat havens outside the U.S. more if they could take some of their health insurance benefits with them or maybe get a tax credit for not using U.S. medicare.
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Old 11-12-2013, 12:08 AM   #37
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Soylent Green...
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Originally Posted by daylatedollarshort
If you want to look at it from a total economy funding issue, then I certainly don't have all the answers but I'd move back the SS age, cut military spending by two thirds, remove the earnings cap on SS, go back to the post World War II income tax rates, install universal health care, make the minimum wage a living wage, close the loopholes on corporate income tax evaders, do away with prescription drug patents and advertising, encourage urban gardening, build more low cost senior housing, increase immigration levels, install SS means testing for all households with more assets than mine, let expat retirees have Medicare benefits, and make more alternative health treatments, like herbs and yoga, mainstream medical treatments.
If these are the alternatives, I hope they don't decide based on ease of implementation!
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Old 11-12-2013, 09:59 AM   #38
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I must say you are a good sport NW-Bound. I think you gave my ideas a lot more thought than I did. ...
I thought your post was satire. Most of the suggestions seemed counter-productive to me. If you were serious, then I suggest you give them a lot more thought.

-ERD50
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Old 11-12-2013, 10:12 AM   #39
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I thought your post was satire. Most of the suggestions seemed counter-productive to me. If you were serious, then I suggest you give them a lot more thought.

-ERD50
Technically, it was tongue in cheek, for the most part.
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Old 11-12-2013, 10:50 AM   #40
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I think the article, and most of the people in this thread are starting with an assumption that we need more people working to provide the increasing goods and services that our retired folks will need.

I don't think that assumption is correct. I think we have reached the point where automation and increasing productivity (and some outsourcing) are outstripping the ability of our economy to make use of the workers that are displaced by them.

We now essentially have four guys in Iowa producing all of our food. Automated factories produce all of the goods that we could ever buy with fewer and fewer people every year. We see the economy desperately trying to find ways to productively employ people, but I think we are reaching the limit of how many ways we can pay each other to make sandwiches and coffee for each other, or silly products that we can market to people. Even the service jobs are now being automated.

We have reached the point where our increasing production just doesn't need many actual workers. The growth areas like software, bio-engineering, medical research, etc just don't need millions and millions of line workers.

We still have a huge unemployment issue, and people are seriously worried about not having enough workers for the future? I think that the world going forward is going to have a more or less permanent surplus of unskilled and semi-skilled labor. People who can improve on the increasingly automated systems that produce our goods and services will be in high demand, but only a small portion of the population is ever going to fit into that category.

I think the big challenge facing us in the future is not how we get enough workers to produce everything, but how we deal with a society that doesn't actually need workers to produce everything.
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