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Title: A Generational Divide?
Source:
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URL Source: http://www.americanthinker.com/2011/05/a_generational_divide.html
Published: May 27, 2011
Author: Jeffrey Folks
Post Date: 2011-05-27 06:23:33 by CZ82
Keywords: None
Views: 3271
Comments: 9
A Generational Divide? By Jeffrey Folks In Running on Empty, Peter G. Peterson excoriates the "we-first" attitude of retiring baby boomers. Having read Peterson's take on boomer retirement, one is left with the impression that boomers are selfishly intent on bankrupting future generations and driving America into permanent decline to boot. Happily, Peterson concludes, there is a solution: higher taxes and reduced benefits. This is what Peterson calls "real leadership." Breaking promises and raising taxes may seem like "leadership" to some, but in fact it is just another effort to excuse and facilitate irresponsible spending by future administrations. The common refrain of every liberal commentator on Social Security, and even of those like Peterson who claim to be non-partisan, is that there is simply not enough revenue to meet future retirement obligations (which Laurence Kotlikoff and Scott Burns in The Coming Generational Storm estimate now stand at $51 trillion). There is just not enough accumulated in the Trust Fund to fund the retirement of 77 million boomers. But if government had run the Trust Fund in a responsible manner, there would have been. The core of the problem is the investment performance of the Social Security Trust Fund. As the Office of Management and Budget stressed in its FY2000 report, the "special" bond obligations held by the Social Security Trust Fund "do not consist of real economic assets." They are not marketable bonds, nor do they pay market rates. They represent nothing more than political promises to fund future retirees based on future revenues. In that sense, no matter what the reported rate of return of Trust Fund "bonds," and the recent rate of return has been abominable, the Trust Fund has earned nothing whatsoever in actual interest. Even the Fund's principle rests on nothing more than the words of politicians like Al Gore, with his fantasy of a Trust Fund "lock box." As Peterson himself admits, even the Fund's reported performance has been disappointing, to say the least. During the era of the greatest bull market for both stocks and bonds in American history, the Fund's real return has ranged between 1.6% and 0%. For many retirees, its future return may well be negative. In other words, retirees who have loaned the government their retirement savings over a period of 40 years or more will receive less in benefits than they paid in. Compared with returns in the private market, those returns are dreadful. Not to single out one fund, but the Vanguard Wellesley Income Fund, a popular option among retirees, has returned 10.23% since 1970. Had investors entrusted only $100,000 to the Wellesley Fund in 1970, in place of the estimated $250,000 in 2011 dollars that each boomer will have contributed over a lifetime to the Trust Fund, that investment would now total nearly $5,000,000. Instead of merely getting back what they paid in, or less, boomer retirees would have been driving Bentleys and flying off for spa vacations in Anguilla. The problem, in other words, is not that boomers expect too much from their government-sponsored retirement: it is that they expect too little. Had contributions been partially privatized in 2005, as many conservatives urged, prospective retirees would already be far ahead. The five-year return on the Wellesley Income Fund's Admiral Shares has been 7.12%. Compounded at that rate, the nominal value of contributions will more than double every decade. Liberals continue to respond to calls for privatization with the usual politically motivated scare tactics. The immediate response of the Democratic Party to Rep. Paul Ryan's budget plan, with its call for a real start to entitlement reform, was to demagogue the issue. Within hours of release of the Ryan Plan, the DNC and its front organizations were robo-calling seniors, convincing them that Republicans were planning to take away their Medicare and Social Security. An equally cynical and divisive politics underlies the left's efforts to convince younger voters that they are having to pay for "greedy" boomer retirees. As Obama has already made clear, Democrats hope to energize younger voters ahead of the 2012 election. One way to do so is by stirring up envy and resentment among GenXers and Millennials over the seemingly excessive benefits that boomers are set to claim. It is true, of course, that younger generations will be called on to fund those benefits: that fact is inherent in the structure of Social Security and Medicare as they have existed since the beginning. What is new is the sense of younger voters that they should not have to meet their obligations -- based partly on the conviction that they are unlikely ever to collect benefits themselves. Sadly, even though the left is responsible for failure to address the Trust Fund's mounting obligations, it is the left that is also attempting to play on these fears. With Democrats blocking every attempt to reform the entitlement system, it is certain that the Trust Fund will "run out of money" (not that it holds any to begin with), whether in 2037 for Social Security or 2024 for Medicare, as now projected, or even sooner. So the fears of younger generations are justified: their reluctance to fund boomer retirement is entirely rational, given the bleak prospects ahead. What is less understandable is their refusal to blame the left for these prospects. Envy and resentment are fertile emotional grounds for political campaigns, and one should expect Obama's re-election team to exploit it to the hilt. By playing off the interests of the young against the old, Obama hopes to energize those same voters who assured his election in 2008. In this divisive strategy, Obama plays on a common myth that retiring baby boomers are set to receive more than is fair. If that myth were true, shouldn't boomers be willing to accept a reduction in benefits? President Obama and his allies at organizations like AARP have been busy selling this myth. They have done so in connection with proposals to means test benefits and with calls to shift the Social Security benefit calculation from wage inflation to CPI. Again and again, these proposals are accompanied by the insinuation that it is immoral for boomers to "burden future generations," as if Social Security's pay-as-you-go structure had not been burdening future generations from the start. In fact, there is nothing "moral" at all about this argument. As he has done throughout his career, Obama is engaging in the cheapest form of political demagoguery. Suggesting that retirees "sacrifice a little bit," as Obama did at a May 18 fundraiser in Boston and as he has done repeatedly in the last few months, is nothing less than contemptible, given the retirement savings that boomers have already sacrificed to government mismanagement. For conservatives, it is crucial that the truth about the nation's entitlement obligations be communicated to the public ahead of the 2012 election. Boomers need to know that they are not responsible for the impending shortfall, and younger voters need to understand that the burden falling on them is not the fault of their elders. It is the fault of a government that raids the nation's retirement fund to pay for ever greater spending on unconstitutional programs
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#1. To: CZ82 (#0)
Social security is a ponzi scheme. You know like a chain letter.
We baby boomers wiped your butts, changed your diapers, and stayed up with you all night when you were sick. We fed you, educated you, nurtured you, worried about you, and celebrated with you when you made your way safely into adulthood. Along the way we worked, made our premium payments to social security and medicare (it is insurance after all) - not only supporting our parents and grandparents retirement, but looking forward to the day when we could retire ourselves; and now we're accused of selfishly thinking of ourselves first?
It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte
Along the way we worked, made our premium payments to social security and medicare (it is insurance after all) - not only supporting our parents and grandparents retirement, but looking forward to the day when we could retire ourselves; and now we're accused of selfishly thinking of ourselves first? If that's the Peter G. Peterson I'm thinking of he is in his 80s, and made his fortune a long time ago.... I imagine that has disconneted him from reality like a lot of other rich people.....
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Along the way we worked, made our premium payments to social security and medicare (it is insurance after all) - not only supporting our parents and grandparents retirement, but looking forward to the day when we could retire ourselves; and now we're accused of selfishly thinking of ourselves first? Did baby boomers do all that? Yeah, a lot of them did. OTOH, they were too busy working to pay any attention to what the government was doing- allowing the rise of the Military-Industrial Complex that Ike had warned about, and runaway deficit-spending since the 70's. Even worse, because the baby-boomers FAILED to maintain proper vigilance, the government LOOTED your Medicare and "Social Security 'Trust Funds.'" THE MONEY IS GONE. SPENT. YOU WILL NEVER SEE WHAT YOU PUT IN, IN ANY REAL TERMS. The ultimate results are finally here: 1. There IS no money in the Social Security "insurance" account you named. It's EMPTY, with the money spent on things like the space-shuttle, Predator drones which have killed thousands of innocent people, wars of aggression (now three fronts!), financial "aid" to countries like Saudi Arabia, Pakistan and Israel, as well as the support of tyrants all over the world (including Saddam Hussein, Quadafi in Libya and the former Shah of Iran). Oh, BTW, I'm sure a goodly amount of that money also went into the pockets of our corrupt government "representatives," their lackeys and corporate sponsors and "Lobbyists"... 2. In place of that money, was left an "IOU," backed by the "full faith and credit..." of a now-bankrupt government. 3. The government is so bankrupt, that if we stopped ALL government spending right now, and interest was truly 0%, it would take us ~100 YEARS to pay it off. When real interest if factored into the equation, the reality is that it will NEVER be paid off. The country isn't just broke, it's completely BUSTED. 4. The government is so broke that if it confiscated all wealth in the country- all assets, cash, precious metals and commodities, land, etc., we would still be hopelessly bankrupt. 5. Because the government is completely, irrevocably bankrupt, the money that YOU thought was still available for you, cannot, will not ever be paid to you, in anything reasonably close to the purchasing power you would reasonably expect... That is, the ONLY way that you'll collect all the money you put in, is if they inflate the currency to such an extent that what you get, will not be worth anything. THIS is where reality comes into play... Families have to support each other, and kids must support their parents; it's their duty. It is part of the understanding that the adult children of the elderly MUST accept, because this will be the new reality moving forward. [And I personally back my words with action- I bought a house that will be sufficiently large to accomodate not just my wife and kids, but also my parents.] Relying on government Social-Security/Medicare handouts (which are really stealing money from someone elses' pocket, since YOUR money is long gone) is naïve at best, and lethal at worst. Investing in your FAMILY, is the one that matters. Thinking you can "invest" your money with the government, is the pinnacle of stupidty.
List of those unable to think: Bumper sticker on DwarF's car: Thousands of baby boomers marched, sat-in, spoke and rallied against, burned their draft cards, occupied buildings, went to jail, and otherwise put their asses on the line - all against the military industrial complex (Ronald Reagan went to war against THEM). Even worse, because the baby-boomers FAILED to maintain proper vigilance, the government LOOTED your Medicare and "Social Security 'Trust Funds.'" THE MONEY IS GONE. SPENT. YOU WILL NEVER SEE WHAT YOU PUT IN, IN ANY REAL TERMS. The money was lent to the federal government and is to be paid back with interest. Some would like to renege on the deal, blame the baby boomers for waging a generational war, and accuse us of selfishness because the time has come in our lives to collect on what we worked for and were promised. Clinton had a plan. Balance the budget, pay off the debt and use the money saved in interest to pay back Social Security. Bush and his have-your-cake-and-eat-it-too buddies put an end to that. 3. The government is so bankrupt, that if we stopped ALL government spending right now, and interest was truly 0%, it would take us ~100 YEARS to pay it off. When real interest if factored into the equation, the reality is that it will NEVER be paid off. The country isn't just broke, it's completely BUSTED. Then pick up your marbles and go play somewhere else. THIS is where reality comes into play... Families have to support each other, and kids must support their parents; it's their duty. It is part of the understanding that the adult children of the elderly MUST accept, because this will be the new reality moving forward. [And I personally back my words with action- I bought a house that will be sufficiently large to accomodate not just my wife and kids, but also my parents.] Relying on government Social-Security/Medicare handouts (which are really stealing money from someone elses' pocket, since YOUR money is long gone) is naïve at best, and lethal at worst. Excuse me! Social Security and Medicare are not hand-outs. Only dishonorable people looking for a way out of meeting an obligation would say that. As for your plan - hope it works out for you. Having just been through it, I think you're naive.
It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte
The isn't any trust fund and their never has been one. The government by law cannot invest money. Social Security has always been a pay as you go system that transfers money from younger, working people to older, non-working people. It's just that simple.
Clinton had a plan. Balance the budget, pay off the debt and use the money saved in interest to pay back Social Security. Bush and his have-your-cake-and-eat-it-too buddies put an end to that. Social security is a chain letter.
Of course they are. They are welfare for the elderly.
Nice attempt to sidestep the point. Reality is quite simple: the government spent your so-called "insurance.". It's gone.. GET IT??? And the baby-boomers fiddled around the edges, while Rome started to burn. You (and your generation) failed to heed the lessons of history; now you will pay the price for your lack of vision. So sorry, but they didn't keep their promise. The money is GONE. They spent it. They blew the money. GET IT??? And let's get real: how can they pay back the money with interest, when they can't pay for the bullshit they're blowing money on right now? In other words, we're currntly surviving "on the kindness of strangers." That's a FACT. Bullshit. The blame covers BOTH sides of the aisle; thinking it was due to only one party or the other is delusional. YOU:Then pick up your marbles and go play somewhere else. Again, you think it's all about ME vs. YOU. I pay into Social Security, KNOWING I'll never see a dime of it. MY money is GONE... YOUR money is gone. That's reality like it or not. Since the money is gone, and YOU insist on picking MY pocket for a promise that politicians (of both parties) reneged on, a "handout" is exactly what Social Securtiy NOW is. Again, that's a FACT. If you have data to refute the point, I would certainly consider it. Oh, BTW, attempting to besmirch MY motives alters the picture not at all. I have no illusions. My wife and mother HATE each other... And my folks have always been independant and active... But when the SSA goes under, we will do what we must; that's what family is all about. Were it my wifes' family- who I don't always get along with- we would still help them, if needs be. Not because I'd enjoy it, but because that's what duty requires. We've had plenty of disagreements, you and I... But I hope you understand that everything I've told you is not out of anger. Indeed, I find the whole thing depressing... But it's better to know what's coming, and be prepared, instead of having an unpleasant surprise- especially where our very survival is concerned. Truly, I wish you well- now and in the future. Regards,
List of those unable to think: Bumper sticker on DwarF's car:
#2. To: CZ82 (#0)
In Running on Empty, Peter G. Peterson excoriates the "we-first" attitude of retiring baby boomers. Having read Peterson's take on boomer retirement, one is left with the impression that boomers are selfishly intent on bankrupting future generations and driving America into permanent decline to boot. Happily, Peterson concludes, there is a solution: higher taxes and reduced benefits. This is what Peterson calls "real leadership."
#3. To: lucysmom (#2)
In Running on Empty, Peter G. Peterson excoriates the "we-first" attitude of retiring baby boomers. Having read Peterson's take on boomer retirement, one is left with the impression that boomers are selfishly intent on bankrupting future generations and driving America into permanent decline to boot. Happily, Peterson concludes, there is a solution: higher taxes and reduced benefits. This is what Peterson calls "real leadership." We baby boomers wiped your butts, changed your diapers, and stayed up with you all night when you were sick. We fed you, educated you, nurtured you, worried about you, and celebrated with you when you made your way safely into adulthood.
#4. To: lucysmom (#2)
We baby boomers wiped your butts, changed your diapers, and stayed up with you all night when you were sick. We fed you, educated you, nurtured you, worried about you, and celebrated with you when you made your way safely into adulthood.
mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation.
#5. To: Capitalist Eric (#4)
OTOH, they were too busy working to pay any attention to what the government was doing- allowing the rise of the Military-Industrial Complex that Ike had warned about, and runaway deficit-spending since the 70's.
#6. To: CZ82 (#0)
The core of the problem is the investment performance of the Social Security Trust Fund.
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
#7. To: lucysmom (#5)
The money was lent to the federal government and is to be paid back with interest. Some would like to renege on the deal, blame the baby boomers for waging a generational war, and accuse us of selfishness because the time has come in our lives to collect on what we worked for and were promised.
#8. To: lucysmom (#5)
Social Security and Medicare are not hand-outs.
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
#9. To: lucysmom (#5)
Thousands of baby boomers marched, sat-in, spoke and rallied against, burned their draft cards, occupied buildings, went to jail, and otherwise put their asses on the line - all against the military industrial complex (Ronald Reagan went to war against THEM).
The money was lent to the federal government and is to be paid back with interest. Some would like to renege on the deal, blame the baby boomers for waging a generational war, and accuse us of selfishness because the time has come in our lives to collect on what we worked for and were promised.
Clinton had a plan. Balance the budget, pay off the debt and use the money saved in interest to pay back Social Security. Bush and his have-your-cake-and-eat-it-too buddies put an end to that.
ME: The country isn't just broke, it's completely BUSTED.
Excuse me! Social Security and Medicare are not hand-outs. Only dishonorable people looking for a way out of meeting an obligation would say that.
As for your plan - hope it works out for you. Having just been through it, I think you're naïve.
mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation.
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