Category Archives: millenials

Generation Wars

Apparently this is the moment for Americans to get all our “toads” out of our guts, to explore all the many ways in which the recent decades have highlighted our divided allegiances. We have, therefore, the War on Women’s Health, the Class Wars, and the Generation Wars, even the religious wars. Whether these wars are being “heated up” by the GOP to further their agenda and cloud the issues so that they can accuse Obama of getting off the jobs message, or whether these are true grassroots issues is unclear, but what is clear is that they have been American issues for quite some time and we have perhaps been swallowing them because they were so devisive, or because we were so busy making and spending money. Now, with money scarce, and America in the midst of changes we don’t want to deal with, all the “toads” are being reguritated (I know I stole this image from the movie Turning Point, but it is so apt).

The Republican in My Back Yard sometimes sends me articles that he knows will raise my hackles. It is interesting to argue with him because it helps me get clearer on what I think and it sometimes gives me new insights because the GOP could help restore some balance in America if they could compromise their extreme agenda and pitch in to help create real solutions for America instead of insisting on positions that half of America does not and never will agree with. By taking compromise off the table, we do not get the usual give-and-take that makes American politics work. Anyway I enjoy arguing about the issues with my neighbor.

This time the article he sent me was about Social Security which he insists is unsustainable. This particular article is called “The Millenial Perspective” by David N. Bass in the Spectator issue from 4/2012. This article is written by a member of the “millenial” age group and attempts to remind others born between 1980 and the mid 1990’s that they will need to take care of their own retirement because Social Security will no longer be there by the time they retire. However, he cannot resist taking some cracks at the “boomer’s” and spilling a few of his “toads”.

He says,

“Social Security won’t be there for today’s twenty somethings, yet their piggy banks – and 401(k)s remain empty.

“US Senator Alan Simpson calls elderly voters “the greediest generation” because of their opposition to reforms needed to keep Social Security solvent. (He is a Republican from Wyoming) “who compares the entitlement program to a milk cow ‘with 310 million tits'”.

“In the coming years, my generation, the Millenials will bankroll a retirement scheme for our elders that we ourselves will never participate in, at least not in the same way.”

“As a result, the will to implement meaningful reform of Social Security has been absent. Those who have retired, or are nearing retirement, don’t want to see their benefits affected. The end result of inaction is clear: The Social Security Trust Fund will go bankrupt by 2037. Accordingly, Millennials will pay into a system for decades but see no benefits (at worst) or reduced benefits (at best).
The generational fleecing isn’t confined to Millennials. Generation X, composed of those currently in their 30s and 40s, will see drastically diminished benefits as well. Thomas Firey, managing editor of the Cato Institute’s publication Regulation, made the point in an article published more than a decade ago. While young people now have 12.4 percent of our earnings commandeered by Social Security, boomers who entered the workforce in the late 1960s paid only 6.5 percent of their earnings to the entitlement. Even later, when the payroll tax was raised, Firey estimated that boomers paid around 10 percent during the latter half of their working careers.
“That’s the boomers’ bargain: They’ve paid less of their earnings into Social Security than we Gen-X/Yers, yet they’ll receive more in benefits than we will and we’ll pick up the tab,” Firey wrote. “And when we retire, there will be no money saved in Social Security to pay for our retirement, unless we pull the same scam on our children that the boomers are pulling on us.”
Apparently we are moving on from class warfare to generational warfare where we will find younger people bitterly accusing “boomers” of callously ripping them off. Apparently tight money times are not pretty.

So that’s the article sent by TRIMBY (the Republican in my backyard) and what follows is what I said and what he said. I hate to say that he made some good points but of course he did.
Me: Thanks for the articles. They were interesting. Social Security is the sad one, I think. Every day we live on our “retirement savings” we feel badly because we are living by draining the resources of others when we thought we were living on our own savings. This whole area of pensions and social security has been one of the greatest disappointments of aging. Corporations made promises to workers when times were good and then walked away from them when they moved their operations elsewhere. People, who thought they had a pension found out, when it was too late to come up with a new plan, that they did not. Fortunately (or not, as they found out) they had social security to at least provide a modicum of security. Now we learn that we are stealing our security from the next generation and that our retirement savings have already been used by our parents. What are we supposed to do now? If we have a job we can try to keep it as long as possible. We can all go get a law degree. Lawyers can work until they are really old. We can start our own business (good luck with getting a loan) where we will be our own employer and can work until we are dead. If we don’t have a job and cannot really do either of the two things just suggested, then we are probably out of luck. Although we may still be able to work, no one wants us because the job market is closed for business. I would like to ask you what you think we should do. How many middle or lower middle class people save even 1 million dollars in a lifetime let alone two? There is basically no interest on savings these days, so your money will not grow. You might as well stuff it in your mattress. We will probably stay with social security as long as we can and then live in communes or at the side of the road when it runs out. Luckily, we’ll have a lot of young people with us who will be able to start our fires and prepare our food, although they will probably just bully us for stealing their futures. Or we can hope that something comes up to restore prosperity to America so we can all stop accusing each other of stealing food out of each other’s mouths. Tell me what you think we should do? I would be very interested to hear that.

Thanks for the articles. They were interesting. Social Security is the sad one, I think. Every day we live on our “retirement savings” we feel badly because we are living by draining the resources of others when we thought we were living on our own savings. The Republican in My Back Yard (TRIMBY) (True- it is a Ponzi scheme) This whole area of pensions and social security has been one of the greatest disappointments of aging. Corporations made promises to workers when times were good and then walked away from them when they moved their operations elsewhere. TRIMBY(This isn’t really true.  There are certainly corporations that have failed and people lost their pensions. The Government has stepped in provided some relief.  People who thought they had a pension found out, when it was too late to come up with a new plan, that they did not.  In the seventies the government realized that some companies where under funding their pension funds.  The government took steps to require them to fund the pension funds so that the people would have some safety. However, the big lie here is that they excluded themselves from the law – government pensions for government workers, state workers, policeman, fire fighters, teachers are not funded…  In industry, the cost of the pensions became so great that the only way for companies to manage that was by having a fixed amount that they contribute to your retirement – they made you responsible for your retirement (hence the 401K).    Fortunately (or not, as they found out) they had social security to at least provide a modicum of security. Well as we now know, this was a lie as well.  Now we learn that we are stealing our security from the next generation and that our retirement savings have already been used by our parents. What are we supposed to do now? If we have a job we can try to keep it as long as possible. We can all go get a law degree. Lawyers can work until they are really old. We can start our own business (good luck with getting a loan) where we will be our own employer and can work until we are dead. If we don’t have a job and cannot really do either of the two things just suggested, then we are probably out of luck. Although we may still be able to work, no one wants us because the job market is closed for business. TRIMBY This isn’t true.  There are many jobs out there, but most people think they are too good for those jobs.  The safety net is too big, too rich.  I would like to ask you what you think we should do. How many middle or lower middle class people save even 1 million dollars in a lifetime let alone two? Easily.  I started my oldest son a Roth IRA that I contribute to, $50 / month.  When he is 65, it will have 1.1 million dollars based on the average return for the past 40 years.  There is basically no interest on savings these days, so your money will not grow. Your money doesn’t belong in a bank, but the stock market. You might as well stuff it in your mattress. We will probably stay with social security as long as we can and then live in communes or at the side of the road when it runs out. Luckily, we’ll have a lot of young people with us who will be able to start our fires and prepare our food, although they will probably just bully us for stealing their futures. Or we can hope that something comes up to restore prosperity to America so we can all stop accusing each other of stealing food out of each other’s mouths. Tell me what you think we should do? I would be very interested to hear that.
TRIMBY – (the Republican in my back yard)
1.       We need to admit to the problem and getting government spending under control, particularly all the entitlements.  People need to understand and accept they are not sustainable.
2.       We need to set some windows and tell people that social security as it is today is over.  If you are say, less than 35, you are going to get nothing.  If you are between 35-49, you will get some minimal amount.  If you are between 50-60 a slightly larger amount.  If you are over 60, we have a commitment to you but it is unlikely that you will see the large cost of living increases that you saw in the past and you will be means tested.
3.     For all those others, that get nothing or less, more liberal freedom for them to develop their own retirement plans.  Tax breaks to corporations for contributions to retirement funds (401Ks) for employees.
4.       Better education in school regarding finance, government spending…  Teach more about self-reliance, family and friends rather than government handouts.  Teach corporations are good, or at least as good as the people that work in them.  Encourage people to start businesses.  Obama actually did sign some good legislation that helps here – crowd investment.  During the 80’s I was a cook, making between $5-9$ an hour.  I managed in 8 years to save with growth and company contributions to a 401K – nearly 80K towards my retirement.  It can and it does work.
OK, you have a plan for a life without social security, but suppose people don’t want to do away with the program. TRIMBY It really isn’t a choice.  We can’t pay for it in the form it is in.  Just suppose that we try to send educated people to Washington who agree to work for us, who agree to study the problems our citizens face, who consult experts and who we expect to work together to fix social security, to invent a social security plan that works. And suppose some of the people we send to do this work fold their arms across their stomachs and say, no. TRIMBY Then we elect new ones and get rid of the old… isn’t that democracy? . We will not work to save social security or medicare or any other social program. We don’t want government to do those things so we will just decide that we will do away with them by sitting on our rich butts and stonewalling. We will not use our considerable (?) intelligence to come up with a set of possible alternatives because we want small government and we intend to get it regardless of what the people say. We will just keep telling them that what they want is unsustainable and we will do nothing (and I mean nothing) until it is too late and the programs die a horrible death. TRIMBY Maybe the program should die?  It isn’t sustainable.  Look at Greece, look at Europe.  Doesn’t work, isn’t sustainable..  Europe is headed for a deep, long recession.  The Democrats refuse to acknowledge the issue.. the answer, just enact the Buffet Rule, or slogans – make the rich pay their fair share, it is evil corporations that have all the money and tax breaks…They aren’t solving anything… it is so bad, that many conservatives believe that they are purposely trying to wreck the system so as to impose some sort of socialism or dictatorship as in the old Soviet Union.  The Republicans aren’t much better.  There are few that have the stones to stand up and say the emperor has no clothes but when they do, they are immediately pilloried by the press and democrats.  95% of the taxes are paid by the 5% of the people… those are the facts.  51% don’t pay ANY taxes, they receive a net amount.  This isn’t sustainable.  To maintain, not grow as planned, benefits it is going to require HUGE tax increases on the middle class.  It is coming.  When those taxes come, they will hit businesses and business’ will have to pass them on to you… or go out of business.. unemployment is going to go through the roof, the cost of living is going to sky-rocket and you and I will be eating cat food…you will still be complaining that the rich don’t pay their fair share and they will expatriated and taken their wealth, taxes and jobs to another country.  (see Greece)    These are real people affected by these programs. The misery that will be unleashed by making abrupt changes to a society this size will be real also. And winning by refusing to play the game is not winning at all. Once both people pulling on a wishbone learn the trick that the one who doesn’t pull always wins, they will never pull on a wishbone again.
(I am very afraid that we might have to do without social security, which we all looked forward to receiving with such a sense of, well, security. If we can’t find a way to pay for it without stealing from younger Americans any security we might have felt will be tainted by having to ignore the pain of younger workers. However, I do not think America is Greece; that is a scare tactic that the FOX news likes to use.) I know I get the last word because its my blog.