The Clash of Generations

[MasterBlaster]

I see a lot of this too. I guess it's pretty obvious that a combination of demographic and economic trends are coming together to ensure that today's younger generation gets a raw deal (on average) compared to their parents and grandparents. The question to me becomes: is there anything we can reasonably do about it? Youth today have much higher poverty rates than the elderly, but our economic and social policies continue to transfer wealth from young to old (in many cases, regardless of means or income). How much longer will the younger generations put up with the status quo?

That's the whole "Clash of Generations" in a nutshell. Is the present system really sustainable ? Is it fair ? Will it survive once the younguns' figure out what's What ?

 

[brewer12345]

Well, my take is this is considerably more negagitve. In all of recorded history, there are zero examples of Democratic forms of governement surviving 300 years or more. The reason is very simple, when the citizens figure out they can vote themselves resources from the governement, they do and the country ultimatly collapses due to overspending.

We are not going to immently collapse, but our decline has begun, Europe is ahead of us so we can see a preview by watching them. I dont think this will have a significant impact on myself, but I have started my children down the road of viewing themselves as citizens of the world and to feel free to move to where the opportunities are best. Sorry to sound so dire, but im not a big beliver in "This time its different"

Steel Rain

So your portfolio allocation to MREs and shotgun shells is somewhat higher than the average investor, I take it?

 

[Steel Rain]

I will disagree. What is happening in some European countries (let's not generalize as some countries do not have a youth unemployment problem) is not that young people can't find jobs, it's that most can't find jobs with meaningful security and benefits anymore. More and more young people are hired as contract workers which means that, when the economy tanks, they are the first to go. Jobs are becoming more precarious for everyone, but more so for the younger generations. The root problem, IMO, is not a lack of skills. It's the inflexible job market incentivizing employers in some countries to avoid hiring full-time workers because they are exceedingly hard to lay off.

I 100% agree with the inflexable job market, that is factored in as costs Most of the important EU economies, with the exception of germany actaully have very high youth unemployment, spain is the worst, but UK is close and France running as fast as possible to join them. All them have much higher youth unemplyment than the US does and has had that issue for as long as i can remember.

I have a lot of european colleagues in mega corp, not one of them is under 40.

Steel

 

[Steel Rain]

So your portfolio allocation to MREs and shotgun shells is somewhat higher than the average investor, I take it?

Hehe, actually not. Not a real tinfoil hat type, do like to shoot though I feel that this situation can be exploited in the near term to pad my nest so its really just an observation. I am really talking about many decades out, so not my problem for the most part

Steel

 

[ziggy29]

I am really talking about many decades out, so not my problem for the most part

It may be true for individuals, but when this mindset takes root in legislative bodies it leads to the "kick the can" mentality that is making smaller and potentially fixable problems a lot worse and a lot more disastrous.

 

[brewer12345]

Hehe, actually not. Not a real tinfoil hat type, do like to shoot though I feel that this situation can be exploited in the near term to pad my nest so its really just an observation. I am really talking about many decades out, so not my problem for the most part

Steel

I am always amazed at the confidence some people have that they know with pretty firm certainty what will happen in the next couple of generations. My (tinfoil) hat is off to you.

 

[Steel Rain]

That's the whole "Clash of Generations" in a nutshell. Is the present system really sustainable ? Is it fair ? Will it survive once the younguns' figure out what's What ?

Well, its clear the current system is not sustainable, its not even mathmatically close. I have shown both my kids this thread and their comment is that since there is zero chance they will get any of the goodies, they will vote it out as soon as they can. Small sample I know, but its pretty clear that 1.9 workers to 1.0 retired folks is not going to work.

Steel

 

[Steel Rain]

It may be true for individuals, but when this mindset takes root in legislative bodies it leads to the "kick the can" mentality that is making smaller and potentially fixable problems a lot worse and a lot more disastrous.

Fully agree, its not that I dont care, its that i dont think i can change anything. I vote, talk with my kids and participate on forums such as these. The solutions are pretty obvious and have been reccomended by various blue ribbon panels since the Clinton administration, but nothing has happened because the electorate will not buy it. Plain and simple, the mathmatical truth is not even a consideration.

Steel

 

[ziggy29]

I am always amazed at the confidence some people have that they know with pretty firm certainty what will happen in the next couple of generations.

Frankly I think some of this is pretty nearly unavoidable if we don't have the will to fix it. If we keep kicking the can and avoiding reforms because the "real" pain is decades away, we're pretty much not only ensuring that the pain will come, but that the eventual "fix" will be a lot more draconian than it would be if we tackled it early on.

 

[Steel Rain]

I am always amazed at the confidence some people have that they know with pretty firm certainty what will happen in the next couple of generations. My (tinfoil) hat is off to you.

Well, if history is a guide, i feel im on safe ground here History may not repeat, but it will rhyme

Steel

 

[Steel Rain]

Frankly I think some of this is pretty nearly unavoidable if we don't have the will to fix it. If we keep kicking the can and avoiding reforms because the "real" pain is decades away, we're pretty much not only ensuring that the pain will come, but that the eventual "fix" will be a lot more draconian than it would be if we tackled it early on.

100% agree. There are many reasonable solutions for both Medicare and SS, but the politics of this is so toxic, that we are paralyzed. The dollar will eventually lose its reserver status, when that happens, the bond markets will force a solution via interest rates. Not tomorrow to be sure, but in our lifetimes for sure.

Steel

 

[brewer12345]

Frankly I think some of this is pretty nearly unavoidable if we don't have the will to fix it. If we keep kicking the can and avoiding reforms because the "real" pain is decades away, we're pretty much not only ensuring that the pain will come, but that the eventual "fix" will be a lot more draconian than it would be if we tackled it early on.

I agree it should be fixed, but I try to be a bit more humble: I have no idea what American society will look like in 50 years.

 

[FIREd]

I have a lot of european colleagues in mega corp, not one of them is under 40.

Steel

Not so surprising. Older workers tend to be full-time employees and they are hard to lay off. Younger workers tend to be temporary or contract employees which makes it hard for them to move up a corporate ladder clogged with older workers. In essence, younger workers are paying for older workers' job security.

However, there is a meaningful number of young European people who manage to do very well for themselves despite the headwinds. In fact, among my college friends and family members under the age of 40, people tend to be financially more successful than their parents.

 

[brewer12345]

Well, if history is a guide, i feel im on safe ground here History may not repeat, but it will rhyme

Steel

So you think people in 1962 had a real good idea of what like in 'Merica would look like today? Somehow, I rather doubt it.

 

[Steel Rain]

Not so surprising. Older workers tend to be full-time employees and they are hard to lay off. Younger workers tend to be temporary or contract employees which makes it hard for them to move up a corporate ladder clogged with older workers. In essence, younger workers are paying for older workers' job security.

However, there is a meaningful number of young European people who manage to do very well for themselves despite the headwinds. In fact, among my college friends and family members under the age of 40, people tend to be financially more successful than their parents.

Yep, in every population, there are those that will rise. The general headwinds are against the younger generation though because they are in a much weaker skill position as a genearl rule.

Steel

 

[Steel Rain]

So you think people in 1962 had a real good idea of what like in 'Merica would look like today? Somehow, I rather doubt it.

Well, in a mathmatical sense, yes they did. The baby boom and the consequeses for entitlements is not exactly a new discussion. We are not talking flying cars here, we are talking about something that is absolutly predictable and measureable. The only real question is what the end state will look like, the sooner something is done, the better, but our track record on this is very poor.

Steel

 

[brewer12345]

Well, in a mathmatical sense, yes they did. The baby boom and the consequeses for entitlements is not exactly a new discussion. We are not talking flying cars here, we are talking about something that is absolutly predictable and measureable. The only real question is what the end state will look like, the sooner something is done, the better, but our track record on this is very poor.

Steel

So in 1962 you would have foreseen the internet, the fall of the Soviet Union, every third person having a piercing or a tattoo, 3D HDTVs, huge increases in wealth disparity, the evaporation of widespreads pension coverage, and a muslim, a lawyer and a communist all occupying the presidency? I am impressed, truly.

 

[ziggy29]

Yep, in every population, there are those that will rise. The general headwinds are against the younger generation though because they are in a much weaker skill position as a genearl rule.

I don't think it's as much a weaker *skill* position as it is the notion that "globalization" and ease with which jobs can be exported in today's economy has eliminated almost all of their leverage. Even the ones with the right skills aren't likely to get the same deal their parents got just because the current market is strongly tilted in favor of employers.

 

[ziggy29]

and a muslim, a lawyer and a communist all occupying the presidency?

(mod hat on)

Danger, Will Robinson.

(mod hat off)

 

[Bestwifeever]

I wish I'd known in 1962 that one day there would be a Microsoft and an Apple I should invest in.

 

[ziggy29]

I wish I'd known in 1962 that one day there would be a Microsoft and an Apple I could invest in.

It would be pretty impressive if I knew something in 1962, since I wasn't even born until 1965...

 

[EvrClrx311]

Must have been nice to have been around when it started...

During the Social Security program's start-up ...The first person to receive monthly benefits was Ida May Fuller from Vermont, who retired in November 1939 and started collecting benefits in January 1940 at age 65. In the three years that Fuller worked under the program, she contributed a total of $24.75. Her first benefit check was for $22.54 and she went on collecting benefits for 35 years, until 1975, when she died at age 100. In this time she collected a total of $22,888.92.

HowStuffWorks "The First Social Security Number"

 

[Steel Rain]

So in 1962 you would have foreseen the internet, the fall of the Soviet Union, every third person having a piercing or a tattoo, 3D HDTVs, huge increases in wealth disparity, the evaporation of widespreads pension coverage, and a muslim, a lawyer and a communist all occupying the presidency? I am impressed, truly.

Well, who is in the whitehouse really has not had much of an impact. I do believe there was a serious attempt at SS refrom under Regan, but I was not of voting age qute yet, so im not sure. All the things you mentioned are the normal march of technology, none of which can address the underlying weakness of the programs. I suppose something could happen, but none of what you have mentioned has imapacted this problem in real terms. Demographics and human nature are the determing factors, the only question is when it hits a wall, and what is the fallout. Im not trying to predict what socitiy will be like, just what the econonics will be like.

Steel

 

[FIREd]

I don't think it's as much a weaker *skill* position as it is the notion that "globalization" and ease with which jobs can be exported in today's economy has eliminated almost all of their leverage. Even the ones with the right skills aren't likely to get the same deal their parents got just because the current market is strongly tilted in favor of employers.

I agree. Young people have never been so skilled! My parents got their first job right out of high school - as did most of their peers. What professional skills did they have? There must be other factors.

 

[Steel Rain]

I wish I'd known in 1962 that one day there would be a Microsoft and an Apple I should invest in.

you cant be the Bestwifeever, im married to her

Steel