Reading time: 3,420 words, 9 pages, 8 to 14 minutes.
Over the past seven years, I’ve written extensively about the various causes of the so-called ‘Great Recession’. It’s more than a cyclical recession; it’s a Stealth Depression and this last recession was merely another step down in what has become a never-ending death spiral. The so-called recovery has been both a technical recovery (the numbers look good because they’re cooked and manipulated) as well as an ass media propaganda cover-up.
Some countries are hurting worse than others. After the last recession, resource nations like Canada and Australia fared a little better than the U.S. where some 50 million Amerikans are on food stamps so we don’t see the long ‘bread lines & soup kitchens’ that we saw during the Great Depression.
But, even in Canada, the pain is evident with long lines at the banks and grocery stores three days before the end of the month when Canada Pension Plan (CPP) payments are received. In other words, a lot of people can’t buy groceries until they get their pension checks.
The beginnings of our troubles are debatable. We could point to the creation of central banks about a century ago, the default of the U.S. dollar during FDR’s U.S. gold confiscation in 1933, the next default when Nixon closed the ‘gold window’ and reneged on the dollar’s convertibility into gold in 1971. All these incidents made our fiat currencies more fiat and more worthless. As a result, inflation has robbed us of about 98% of the dollar’s purchasing power over the past century.
More recently, the consequences of the Dot Bomb bust in 2000 and the economic fallout from 9/11 would have been painful, but we likely would have recovered long ago by traditional capitalist ‘creative destruction’. Instead, imbecilic government stooges caved in to their handlers (“our owners” as George Carlin called them) and everything that’s been done since has been to our owner’s benefit and our (‘Main Street’) detriment.
There are and will be many more unintended consequences of these financial shenanigans that imbecilic governments and incompetent central bankers never expected. That’s what happens when you play with fire. Centrally planned economies turn to crap for the same reason we cannot control Mother Nature without suffering unintended consequences.
Adding fuel to the fire is our human nature in the form of socialist envy as we will examine shortly. I detailed socialism as one of several forms of Collectivist idiocy that includes communism, Marxism, progressivism, liberalism and various other ‘isms’ that rely on robbing others while producing nothing. The main difference between them is how slow or fast they achieve poverty for everyone.
Given my disdain for socialists and my contempt for communists and marxists, I am sometimes accused of being a hard-hearted conservative. I may be hard-hearted (tough love works) but I am not a conservative. I am an anarchist.
In any case, you know that the disease of socialism is spreading when Canada’s largest weekly magazine, once fairly neutral Macleans, publishes an online article that stokes the fires of a generational war. It’s titled “Seniors and the generation spending gap” (the print version is titled “Old and Loaded”). The byline “Why are we doing so much to try to help seniors when they’re already the wealthiest generation in history?” They all reek of socialist envy.
I’ll quote from the article in italics and follow with my comments.
“Seniors have long been considered society’s most vulnerable citizens, fragile pensioners on fixed incomes in need of a financial helping hand from both government and agile younger workers. That was true decades ago, but not anymore.
“…today’s seniors are arguably the wealthiest generation in history. In the 1970s, nearly 40 per cent of Canadian seniors lived in poverty. Today it’s five per cent, half the poverty rate of the working-age population…”
Gerold’s comment: a) the seniors in the 1970’s faced rampant inflation that destroyed fixed incomes and impoverished them. To suggest we go back to this level of poverty is incredibly facile.
b) This is comparing apples to oranges; comparing today’s well-to-do seniors to impoverished 1970’s seniors.
c) The average age of the working population is half the age of seniors who have had a longer time to increase their net worth so this too compares apples to oranges.
d) Many in the working-age population have allowed themselves to become debt-slaves which many seniors have avoided as Macleans themselves admit below.
“The stunning transformation of the balance sheets of the elderly is thanks to a combination of financial discipline, public policy and good timing. Many of today’s seniors were the babies born in the aftermath of the Great Depression who learned to abhor debt and save aggressively. (The average Canadian senior has a debt load equal to just five per cent of their total wealth, compared to a 99 per cent debt-to-wealth ratio for their Boomer children.)”
Comment: a) At last; a grain of truth that explains why some seniors (not all) are well-off compared to younger generations. Can we learn from this or will we continue making the same mistakes?
b) This makes Boomer debt-slaves really, really stupid for taking on so much debt.
c) Some people claim we don’t learn from history. Speak for yourself, but those of us who DO learn from history get really annoyed listening to the whining of those who screw up because they did NOT learn from history.
“The fortunes of younger Canadians haven’t improved nearly as much as they have for the elderly. In the 1980s, the typical senior was four times wealthier than the average 20-something. Today’s seniors are now on average nine times richer than their Millennial grandchildren.”
Comment: This asinine statement repeats what was already said, but uses a different slant on the numbers. So, my response is similar –
a) The 1970’s had rampant inflation that destroyed fixed income seniors so the proportion of seniors net worth in the 1970’s is skewed compared to today therefore it’s another apples-to-oranges comparison.
b) The average Millennial has worked probably less than a quarter as long as today’s seniors who have had a much longer time to increase their net worth. I hesitate to use the word ‘wealth’ instead of ‘net worth’ because in today’s insane world the word ‘wealth’ has negative connotations and, unfortunately, stirs up socialist envy and resentment.
c) A quote variously attributed to both Mark Twain and Disraeli is appropriate, “’There are three kinds of lies: lies, damned lies, and statistics.”
“Canadians age 75 and older make up less than seven per cent of the population, but control more than a third of all financial assets in the country¬¬…”
Comment: Comparing the percentage of population and proportion of assets completely overlooks the length of time that seniors have had to increase their net worth compared to younger generations. Seniors have been skimping, saving and investing longer therefore they have a greater net worth.
“…does it mean they should continue to get seniors-only discounts or qualify for government benefits like CPP and OAS?:
Comment: a) They contributed to the Canada Pension Plan during their working careers and they pay income tax on CPP payments they receive.
b) I pay more into CPP than into my own ‘divine’ benefit pension plan yet my CPP payments will be less than half my register pension plan payments will be. That’s fair? You’re damn right seniors should get CPP payments; they paid into it.
c) Admittedly, one can question whether untaxable Old Age Security (OAS) payments are unfair where income splitting is allowed for high income couples (up to a $140,000 total). OAS should be taxable like any income since basic personal tax exemptions are high in Canada. The Federal government realizes this unfairness and has started to raise the eligibility age.
“More than 40 per cent of Canadian millionaires are 65 and older.”
Comment: so what? It doesn’t tell us what percentage of Canadians are 65 or older thus making it another inflammatory remark.
a) That means the remaining 60% of millionaires are less than age 65 which is just as meaningless.
b) It takes years of hard work, saving, delayed gratification and smart wealth management to become a millionaire; something an entitlement mentality obviously fails to grasp.
“The median net worth of seniors has similarly jumped 70 per cent since 1999, but hardly risen at all for those younger than 35.”
Comment: Today’s 35 year olds were only 20 in 1999. They were probably still in school or only beginning to work so how could their net worth be expected to increase as much as today’s seniors who were more than 50 years old and had much longer to build a nest egg from which to increase their net worth.
“Meanwhile, those under-35s have seen their debt rise almost as quickly as their grandparents’ wealth.”
Comment: Nobody is held at gun-point and forced to become a debt-slave. A large amount of debt is student loans which in some cases is as high as six figures. The word ‘insane’ comes to mind. Secondary education is not a God-given right. If you can’t afford it without borrowing a large amount of money, you need your head examined.
Every generation has this challenge. As a student, I applied for grants and loans. I was refused every year but one where I was given the smallest loan available; a mere $175 which I paid back out of my first paycheck. Nor did my parents contribute monetarily as I had two sisters also going to university. I agreed that since I had greater earning power than my sisters, that my parents would give me room and board during the summer while I worked underground up north in the hard rock mines which earned me enough for tuition, books and living expenses during the school year.
Granted not everyone can do this, but the point is there are creative solutions to most problems. It sometimes takes hard work and sacrifice. Contrast this with many of my buddies who stayed in the city during the summer, worked low wage jobs, attended rock concerts, chased hippy-chicks, worked part-time during the school year, took many years longer to get a degree and some never did. The tragedy of life is you get out of it what you put into it.
“Retirement savings accounts have shown the same troubling divergence. Since 1999, the proportion of seniors who have RSPs has grown 30 per cent, while it has fallen five per cent among younger Canadians.”
Comment: Fat lot of good savings accounts are for ANY age group when our spineless governments, their treasuries and incompetent central banks keep interest rates at ZERO. It means seniors earned interest on their savings once upon a time long ago, but today everybody suffers.
“German think tank Bertelsmann Foundation has called Canada among the “least intergenerationally just” countries in the world, with a troubling large gap between the poverty rates of seniors and children and a strong “elderly bias” among government programs and tax systems.”
Comment: This is the sort of socialist envy one could expect from the cradle-to-grave, welfare state of Germany. Instead of punishing seniors and threatening to steal their hard-earned wealth, we should investigate how they achieved success and learn to emulate them instead of whining.
“From seniors-only tax breaks to free transit passes, Canadian governments now spend a collective $45,000 a year per senior in Canada compared to $12,000 for those younger than 45.”
Comment: That’s because seniors are retired and drawing CPP for which they contributed during their working careers. Seniors also have more medical issues. Or, is Macleans perhaps suggesting euthanasia?
“Many point to changes in the economy that are working to effectively shut out younger Canadians from the economic windfalls of their parents and grandparents.”
Comment: That’s true but that’s the fault of governments’ idiotic fiscal policies and allowing the creation of incompetent central banks and their punishing zero interest rate policy. That’s not the fault of seniors many of whom are delaying retirement to make ends meet during difficult times thus locking youngster out of the job market. Blame spineless and incompetent governments for unnecessarily extending this recession to line the pockets of their bankster buddies.
“Increasingly, the retirement dreams of younger Canadians are resting on the foundation of an economy that is shifting toward low-wage service jobs—many of them for services catering to their affluent grandparents.”
Comment: Again, how is this the fault of seniors?
“More than 40 per cent of existing private sector defined pension plans, which have guaranteed a secure retirement for thousands of today’s retirees, are now largely closed off to new employees.”
Comment: That’s true, but again it’s not the fault of seniors. Blame globalization and short-sighted, metric-driven corporate greed for destroying the very customers they rely upon for revenue. The word insane comes to mind.
“The idea of having to delay retirement is still likely to come as a surprise to young Canadians, a third of whom told researchers from the Bank of Montreal that they plan to retire before the age of 60.”
Comment: Is that a ‘plan’ or ‘hope’? It shows how many young Canadians are unburdened by reality and infected with an entitlement mentality that is not only going to disappoint, but work against them.
“Incredibly, the age gap is growing even when it comes to housing. Despite low interest rates that have allowed legions of young Canadians to qualify for large mortgages, it’s seniors who have experienced one of the biggest increases in home ownership of any age group. In 1981, just 66 per cent of those over the age of 70 owned their homes. Today it’s 72 per cent.”
Comment: a) Seniors are living longer thus skewing the numbers.
b) Seniors are more frugal and less indebted thus more able to afford it.
Note to Canadian seniors: sell the homestead – especially if it’s large because: a) Canada’s housing bubble will burst.
b) younger generations of whom there are fewer can’t afford pricey homes so who are you going to sell to when the Boomers start selling en masse? Learn from history. I don’t want to hear senior’s whining either.
“Meanwhile, over the same period, the home ownership rate has actually gone down slightly among Canadians in their 30s and 40s.”
Comment: The fact that home ownership among the young has decreased only slightly is cause for concern. They have fewer full-time jobs and more part-time jobs which means they’re deeper in debt and setting themselves up for a lot or heartache in the next downturn which may be as little as a year away.
Macleans quotes a parent. “Every generation of young people faces challenges starting out in the world, he says, “but I think the hurdles I faced were much more surmountable and much more dependent on one’s individual ability than the current generation.”
Comment: read between the lines and you’ll see that helicopter parents are at least partly responsible for their youngsters’ entitlement mentality and their inability to deal with responsibility.
“So many of the things [young people] face are beyond their ability to change.”
Comment: Oh, poor babies! He said it himself before sinking into despair, “Every generation of young people faces challenges…” In the 1970’s both interest rates and inflation were double digits. Yes, there were a lot of jobs but there was also an overabundance of Boomers competing for those jobs. Today I see twenty-something debt-slaves driving brand new cars. I bought and drove used cars for forty years before I bought a new one. I paid cash because I could afford it.
We have met the enemy and he is us. It never ceases to amaze me how creative we can be in shirking our responsibilities and whining. Remember the “Serenity Prayer”.
“Last year, University of Toronto geography professor Alan Walks … found that cities with a high proportion of seniors also had higher levels of household debt … [but] it wasn’t the seniors who were deep in debt, but their younger neighbours, some of whom had debts worth more than 300 per cent of their incomes.”
Comment: Once again, nobody forces you to become a debt-slave. Once again, we have met the enemy and he is us.
“It’s easy to blame seniors for stacking the deck in favour of their own generation. But in many ways, says Kershaw, it’s actually …younger Canadians who are to blame for the lack of public support for their issues. Turnout among younger voters is notoriously low, so politicians naturally target their campaigns to the seniors who actually show up on election day.”
Comment: At last, some truth emerges. Once again, we have met the enemy …
“The battle over how cash-strapped governments should divvy up their limited resources between young and old is only likely to heat up as the biggest wave of Baby Boomers enters retirement over the next decade.”
Comment: Yes, the situation is going to get even worse.
You can also bet that our owners with their complicit hand-maidens, the ass media, will continue stirring the pot of socialist envy and resentment. They’ll continue fomenting class warfare, or in this case generational warfare. It’s an effective ‘divide and conquer’ strategy that deflects blame from their insatiable greed and looting.
Don’t fall for it. Let’s stop being our own worst enemies.
For some perspectives from other people, below are some interesting readers’ comments on the Macleans on-line article.
“Most seniors are not as wealthy as depicted in this story.”
“Lower interest rates have allowed the young to buy large homes and new cars that we could never afford when we were out of university five or ten years.”
“Great! Now as I approach retirement, after years of work, raising my family, and pinching pennies to save for retirement, an article like this. How do you justify going after seniors, who have limited ability to make adjustments once they are out of the work force.”
“And I do think that the article is terribly biased in blaming the elderly for woes facing the younger generation when a lot of the problem related to high housing costs and difficulties in getting jobs is our failed immigration system.”
“Go tour a retirement home…or a nursing home…anywhere in the country. Then tell me the elderly are all ‘rich’ and apparently ‘spoiled’.
“Whiny Millennials, who don’t want to put in the effort the seniors did….just take it.”
“Different generations face different struggles.”
“My social circle is not huge but I can think of quite a number of seniors who are barely scraping by. They live on small pensions and and they hardly live the lives of the seniors that you portray in your article. I think that it is irresponsible to fan the flames of envy that the younger generation may feel towards retired people. Yes, some retired people may be well off, but certainly not all.”
What we need to do is better understand how our western history, culture, religion and beliefs sabotage us as I outlined in great detail in Our Insane Judeo-Christian Slave Morality which makes us ripe for manipulation and pillage. As well, Paul Rosenberg of Casey Research says, We’re Better Than We Think we Are.
Indeed, we are once we stop being our own worst enemies and overcome our sheepdom. In the immortal words of Ann Landers, “No one can take advantage of you without your permission.”
Canada’s premier weekly news magazine was once fairly neutral. I’ve long ago let subscriptions to Time, Newsweek and the Economist lapse because they’ve turned into propaganda rags. When Macleans drinks the socialist Kool-Ade, you know we’ve turned a dark corner. It’s no wonder printed news is in trouble and more and more people get their news from alternate sources.
September 14, 2014
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Not to worry; most “wealth” today is simply someone else’s IOU, and the function of the central banks has been to midwife since the 1970’s the birth of an ocean of IOU’s, far too many to be paid out as they come due.
Why is a share of IBM worth $162.79 today? Because the consensus among those inclined to own it is that price. Tomorrow the consensus could be higher or lower for just two people, a single buyer and a single seller, and the value of a billion shares outstanding is changed as well. Where did the value come from or disappear to, if the price goes up a dollar or down a dollar? The ether, my man, the ether. It’s a product of mass psychology and nothing more, and stocks (real estate, bonds, artwork, collectibles, etc.) are supported in their prices by a perception (and nothing more) of the value of between 65 and 100 trillion dollars in IOUs sitting on people’s asset side of the balance sheet.
The human social experience is a fractal of ups and downs, (relative) liberty and (political) slavery, relative poverty and relative wealth, relative peace and relative strife. It also goes by itself, and responds to the machinations of no man or group thereof. No tree grows to the sky.
One quibble: I may be wrong, but as I see it, collectivism of all shades has one motive force, and that is politics. Socialism’s subsets (International socialism, AKA Marxism, national socialism, AKA Nazism, and democratic socialism, AKA Fabian socialism) are virtually identical in animation, just differing in intended rate of change. Rightist collectivism, AKA corporatism or fascism (Mussolini used corporatism to best describe Italy’s system he headed) seems to differ from the subsets of socialism only in being open about oligarchy. All such political systems are simply versions of slavery, the kind discussed by Etienne de la Boetie in his “Discourses.”
Back to economics; all spending is consumption, and all consumption is in real time. It is not possible to consume today that which has yet to be produced, so debt-based spending is not about what happens in the future, it’s about what happens right now.
Right now (and for over 40 years) an exponential rise in debt issuance allowed for improvident over-consumption of the “now” (capital consumption) disguised by the illusion of holding an IOU in place of what was consumed.
This period of declining interest rates signaled an underlying rise in social mood, which catalyzed rising asset prices (bull markets) and stoked a massive artificial economy causing many people to make ill-informed decisions (like committing years of their lives to attain positions in industries over-amplified by debt-funded over-spending by political systems…e.g., medical services) that will eventually be revealed to be dead ends.
There is no way to know how high this can go, but it is finite. For 20 years I’ve expected The Top, yet here we are. This is just another reminder that when it comes to complex systems, no predictive model has proven particularly useful. Trend-following has been the only game that paid off, as unsatisfying as that seems.
Much of what see people wring their hands about today will be replaced by an entirely different set of problems in coming years.
Sorry, last comment of the day… saw this on Zerohedge and figured it made sense to share it in regards to your article:
All of this kinda makes me think of that Looper movie with Bruce Willis and Joseph Gordon-Levitt. Fun movie 🙂
“Alright, listen. I know this is a hard situation for you, but we both know how this has to go down. I can’t let you walk away from this time alive. This is my life now, I earned it, you’ve had yours already. So why don’t you do what old men do and die?”
-Joe to Old Joe
Great comments, GBV. Welcome back. It’ll take some time to cogitate on your thoughts for a proper response. Stay tuned.
Yeah, I glanced at the title of the Zero Hedge article about limiting lifespan to age 75, but I haven’t had time to read it yet. It reminded me of the thrust of the Macleans article. It also indicates the next step in the coming generational war that’s being fostered by our owners to divert attention from their shenanigans in the hopes we’ll all devour each other instead of them. It’s a testament to their hubris that they think they’ll escape unscathed. They too will devour each other.
Japan and their demographic problem will be surpassed by China and their one-child demographic tsunami. Japan’s depression is 20 years old and a mirror for what awaits the rest of the world.
Japan does seem like a great case study on how a culture dies.
My only concern would be that Japan benefited from being one of the biggest export economies in the world while the rest of the world was still growing (i.e. the 1990’s / 2000’s, while the world was expanding the use of the financialization lunacy cooked up in the 1980’s). I don’t think the rest of the world will have that same ‘safety net’ Japan had that allowed them to drag their crash out over 20 years… our crash will be system-wide (i.e. global), and thus likely a lot more quick.
I’ve heard others like Kunstler mention, however, that the death of modern Japanese culture may have a silver lining in that it might give rise to one of the first developed nations that returns to a more sustainable / less energy-intense system (i.e. what the Japanese had in place a few hundred years ago). That all sounds fine and good, save for all the nuke plants and fuel waste that needs to be constantly cooled/monitored…
What a coincidence…
PPS – further to older generations being complicit in ponzi scheme systems so they can receive their pensions, health care, etc., while younger generations suffer, consider what’s happening in Japan:
Not to say the US Fed is much better. But anyone who doesn’t see the problem related to this kind of market manipulation (or worse, defends it) to maintain stock markets (and thus the viability of their pension plan holdings) should recognize how complicit they are in the ponzi scheme.
PS – maybe I should start adding a word count (almost 4,000!) and “reading time” to my comments… haha… 🙂
I like you, and I like what you have to say. But today I have to take out the knives (and not just because I read about your quinoa spinach egg breakfast casserole right before lunch time)…
As a younger/middle-aged man, I can’t count the number of Boomer or older individuals I come across who feel entitled to what they’ve “earned” and that the younger generations are lazy, want everything now, and don’t “know their place”.
That’s not to say I don’t to some degree understand those older generations’ point of view – they feel they’ve worked all their lives and they deserve something for it – but it completely ignores the fact that anyone who grew up from the 1950’s until the early/mid 1990’s had much better opportunities than anyone my age or younger has today. This is because the 1950’s to the 1970’s was the energy-growth heyday of our (North) American imperialism, followed by the debt-growth heyday of global financialization in the 1980’s to 1990’s.
The Western economies grew *exponentially* during this period of time (first thanks to energy surpluses, then thanks to IOUs in the form of derivatives and other financial promises that will likely crush all of us in the near future when those promises are revealed to be unpayable), and to be alive then was to witness the greatest growth in terms of standard of living the world has ever seen (and likely will ever see again in terms of the human species). All the social programs such as wellfare, medicare, pension plans, etc. that we know today are a result of people from that period of time – and all of those programs were based on the concept of perpetual growth (i.e. future generations paying for the current generation who holds power).
As a child and a young man, I was fortunate to enjoy the twilight of this incredible growth… and from experience, I can say I had a wonderful childhood and never really experienced any of the “want” that my father or his father did (e.g. buying expired food or food without labels to get by, driving around to pick garbage from the neighbours on garbage day, using garbage bags to cover up broken car windows until enough could be saved to replace them). Yet I recognize the fact that this wonderful era of growth has come to an end, and for the next 50 years (assuming I live to be in my 80’s) I will have to experience the wonders of growth you enjoyed…. but in reverse.
Everything we have today will be slowly but surely taken away from me, in part due to my own lack of success/ambition/ability, but far more due to societal/economic forces I cannot begin to control. And while I doubt most young-to-middle-aged people comprehend this enough to speak to it so specifically as I have, they no doubt have the inkling suspicion that the future they were promised will not come to pass. They are questioning why they should continue to support a system (and, in effect, an older and now more dependent generation) which will not provide for them in the future, especially when the system (again, in effect, the older generation) has distributed wealth so unevenly (whether justifiable or not). Left unchecked, an anger will build up in the younger generations until they reach a point that they will want to burn the whole system (and its wealth) down just to spite those who benefit so greatly from it. History suggests as much.
I don’t suggest the younger generation isn’t lazy, that they don’t have unrealistic expectations, or that they haven’t ruined themselves through the use of debt (to have what they want now without paying for it); but I think there are just as many faults to be found in the thinking of older generations and what they believe they are entitled to. Some of the comments in the Macleans article are no-doubt inflammatory and without merit, but the overall issue they are raising (i.e. that the younger generation will not have the opportunity to have what today’s older generations have) is one of importance and one that young people are cluing into as they begin to inherit control over the system from their elders.
Just some of your comments I wanted to touch on:
“…seniors in the 1970’s faced rampant inflation…”
– I suspect those seniors who had to live through the Oil Shocks of the 1970’s were not as indebted as people in general are today (yes, partially because people were better about living within their means back then, but don’t discount the fact that years of inflation with stagnating wages has likely forced many from younger generations to take on debt simply to have a similar standard of living as their parent’s generation); many of those seniors likely owned their homes outright as well as many of their assets, all of which would have experienced a great deal of price appreciation due to inflation.
– Side note: I recognize that inflation/deflation can be hard for anyone, depending on how their resources are allocated. But I have to admit, I’m not very sympathetic to anyone who cannot allocate their resources in a way that offsets the ravages of inflation/deflation, as to fail to do so either suggests the person is unaware (like the “Sheeple” we regularly complain about here on your blog) of economics or making bad bets with their wealth (and thus deserve what they get; that goes for any age, though I suppose not children or those who do not have the mental capacity to understand economic systems and inflation/deflation).
“…a grain of truth that explains why some seniors (not all) are well-off compared to younger generations … this makes Boomer debt-slaves really, really stupid for taking on so much debt.”
– I think that grain of truth is primarily due to “good timing”, not with public policy (near-useless, save for allowing politicians to claim responsibility for boom times while blaming the economy and/or the people during bust times) nor financial discipline (if older generations saw higher wages in relation to the cost of living, it doesn’t suggest they were disciplined in their spending – life was just financially easier for them than subsequent generations who witnessed stagnating wages and increased costs of living). I will agree that Boomers are stupid for taking on so much debt – they could have likely maintained their parent’s standard of living without much debt (if any at all in some cases), but they chose to have opulent homes and annual vacations, which is reflected in the obscene amount of (unpayble) debts they’ve racked up. But it’s important to point that out, because at some point in the future (assuming EROEI of energy continues to decline as we use up all the oil, and the return on financialization decreases as we take on too much debt as a system) SOMEONES generation will have to receive less, as the cost of living that those who lived through the 1950’s – 1990’s will be just too high to maintain.
“…The 1970’s had rampant inflation that destroyed fixed income seniors… The average Millennial has worked probably less than a quarter as long as today’s seniors who have had a much longer time to increase their net worth.”
– With regards to 1970’s inflation, it might have “destroyed” fixed income seniors in terms of cost of living increases, but if anything it would have inflated their net worth (i.e. all the assets they likely owned started to increase greatly in price). Since the quote is discussing net worth, I think that’s important as it suggests that seniors only had 4 times as much net worth as the 20-somethings; this after a period (1970’s) of great inflation followed by a period (1980’s) of increased financialization which only drove asset prices up even further. That means that even after the effects of the 1970’s & 1980’s, the average senior only had 4 times as much as the average 20-something… fast-forward to today, and you see that the average senior has 9 times what young people have. Either seniors wealth is growing faster, or young people’s wealth is growing slower.
– Also, with regards to Millennials having worked less, I do agree, but I don’t think Macleans was trying to suggest that Millennials should have as much as older generations do, just that the difference in net worth has changed drastically (i.e. more than doubled) in a span of 20 years.
“…Comparing the percentage of population and proportion of assets completely overlooks the length of time that seniors have had to increase their net worth compared to younger generations…”
– Agree. Would have been more helpful to tell us what percentage of wealth seniors had back in the 1950’s, 60;s, 70’s, 80’s, etc. If that percentage has been growing, then I do think there is an issue there as the time seniors have had to increase their net worth compared to younger generations has likely remained constant across the decades (though maybe not too constant, given that most young people need to pursue post-secondary education to obtain gainful employment these days, and that seniors are living longer – not sure what impacts those two events would have on inter-generational net worth, but could be interesting to look into).
“…I pay more into CPP than into my own ‘divine’ benefit pension plan yet my CPP payments will be less than half my register pension plan payments will be. That’s fair? You’re damn right seniors should get CPP payments; they paid into it.”
– I would propose that all retirement plans are ponzi schemes that are based on a larger number of individuals paying into it to support the members of the upper echelons. Frankly, nobody should pay into any retirement plan anywhere in Canada – worst case scenario, the government should force you to put aside a small amount of your earnings in a savings account for retirement so that the wealth remains within your own control (not some promise that won’t be kept). But even that is probably too much for my Libertarian, Don’t-Tread-on-Me, get-your-hands-out-of-my-pocket stomach to bear!
– All that being said, if seniors want their CPP payments, then the government should let the younger generations off the hook and seniors can get paid out with whatever else remains in the plan. I promise you, it’ll be a lot less than you’re planning to receive now if the younger generation isn’t paying into it. If that makes you upset, I suggest you discuss it with your parents and their peers, as they’re the ones who benefited from the payments you put in for so many years.
“…It takes years of hard work, saving, delayed gratification and smart wealth management to become a millionaire”
– Lottery tickets! Inheritance! Drug smuggling! House flipping (almost as bad as drug smuggling in my opinion… ugh)! Alibaba IPO! Open your mind to the possibilities… there are so many get-rich-quick schemes out there today 😉
“…They were probably still in school or only beginning to work so how could their net worth be expected to increase as much as today’s seniors who were more than 50 years old and had much longer to build a nest egg from which to increase their net worth.”
– You’re discounting the inter-generational rate of change over time, though to be fair, Macleans didn’t provide that information. What I would look at is how much the average net worth of an individual your age grew from the time you were 20 to the time you were 35 (i.e. 15 years, as per the example given by Macleans). If it grew more than nil, that means (on average) your generation existed in a more plentiful time when either a) everyone’s wealth grew much faster or b) the distribution of wealth growth was distributed between seniors and the young in a manner which saw the young getting more then than they do today.
– Side note: my net worth is abysmal compared to my peers, despite the fact I probably have one of the best paying jobs of all but two or three of them. This is due to the fact I’m not married, refuse to take on debt to buy a home, and do not own a shiny new car (through debt financing, no less). Though I will admit, I squander a lot of my wealth on travel and tin foil hats (i.e. survivalist stuff), its funny to me that to have a high net worth in today’s age as a young person, you have to go into insane amounts of debt to do it.
“…Nobody is held at gun-point and forced to become a debt-slave.”
-Fair enough. I hate debt, and I’m very hard on people who take on debt (especially unnecessary debt for unnecessary consumption – houses, cars, arts degrees that cannot be applied anywhere, etc.). But I do recognize that there is a) increased competition for good paying jobs in today’s market (which require post-secondary education to even be considered for as an applicant), b) a societal push to attend post-secondary institutions if you are a mediocre student or better, and c) less good-paying physical jobs that individuals can simply walk into after secondary school (and the few that do exist are generally located in geographic extremes far away from one’s family/friends; Fort McMurray comes to mind).
– Furthermore, as the cost of living keeps on increasing (thanks to insane interest rate policies courtesy of our central banks), the government really is “holding a gun to your head” and forcing you to take on debt; when people can’t even make enough money to put food on the table (i.e. stagnating wages while prices rise), debt sometimes becomes the only option. I actually feel sympathy for people in those situations, as that’s our society chewing them out simply for being poor – not because they made bad choices to borrow for something frivolous.
“…Granted not everyone can do this, but the point is there are creative solutions to most problems.”
– Nicole Foss over at the Automatic Earth got me thinking about problems vs *predicaments*. Problems can be solved, and yes, there are creative solutions to most problems. But predicaments are situations where there is no right answer, and you simply must find the lesser of a host of bad options and live with it. I think today’s youth are facing more predicaments than they are problems.
“… Fat lot of good savings accounts are for ANY age group when our spineless governments, their treasuries and incompetent central banks keep interest rates at ZERO.”
– Or when those tyrannical governments pilferage said savings accounts to fund their growing deficits/debts! Something I’m sure we’ll see here a short while after they push it through in the European Union and/or USA…
“…Instead of punishing seniors and threatening to steal their hard-earned wealth, we should investigate how they achieved success and learn to emulate them instead of whining.”
– I’ll neither agree nor disagree with the German outlook, but I will point out that you have a bias that senior’s wealth was “hard-earned”. Perhaps a few seniors wealth was hard-earned. Perhaps your wealth was hard-earned. But given the idea I’ve provided before that 1950 – 1990 may have been the *easiest* time for any average person alive (ever) to amass wealth, perhaps you should question how “hard-earned” today’s senior’s wealth is?
– Side note: in case I’m starting to sound like an entitled young asshole, please note that I don’t think I’m entitled to have what the senior generations of the 1950’s to 1990’s had/have; I recognize the fact that the system will never provide me with the opportunities they had (or if it does, I’ve already enjoyed those opportunities). What I am asking is for them to also realize that a great deal of what they have was due to timing / good luck, and to recognize that future generations will not have the energy/financialization growth opportunities that they had – in fact, future generations will likely have to PAY MORE for any delayed costs of the expansion of energy consumption (i.e. pollution) and global financialization (i.e. collapsing ponzi schemes).
“…Seniors also have more medical issues. Or, is Macleans perhaps suggesting euthanasia?”
– So seniors are entitled to additional health coverage because they are old? And the system should be giving them that care… why? Rather than have a socialized medical system, why doesn’t the government stop taking all of our money… but then the elderly can pay for their own health problems. Again, I think they’d quickly realize they’re getting a much better deal the way it is now.
– Personally, I’d just like an answer as to why we have seniors (and children’s) discounts for things like public transit or the movies – if its a consumable that can be used up (e.g. a seat on a bus, a seat in a movie theatre), what difference does your age make? It really is ageism.
“…That’s true but that’s the fault of governments’ idiotic fiscal policies and allowing the creation of incompetent central banks and their punishing zero interest rate policy. That’s not the fault of seniors many of whom are delaying retirement to make ends meet during difficult times thus locking youngster out of the job market.”
– While I’m not about to defend the government, this doesn’t rest solely on their shoulders. Who benefited from decades of socialized health care? Who benefited from ponzi-scheme pensions plans that paid out (until now, when there are less youth who have lower wages and higher costs comparatively to older generations)? Who benefited from expanded public infrastructure and public transit systems at subsidized rates? Who benefited from the expansion of government services from garbage collection to street cleaning to public sewers/sanitation? That would be seniors. Yes, we young folk benefit from that too, but seniors have enjoyed it for MUCH longer than we have. Those government deficits have been ran up by seniors (who paid their taxes and paid into CPP, but whattya know – they were never paying enough that whole time! Whoops! But don’t tell any seniors their whole life was an energy/debt SUBSIDIZED EXISTENCE, as that might make them feel like you’re questioning if they actually earned what they consumed all these years…) while they enjoyed the societal benefits of debt, and now the young folk have to find a way to pay off those debts while a) the infrastructure crumbles (as it does not last forever) and b) compete with seniors who didn’t save enough for retirement and thus feel justified in locking youngsters out of the job market… those same youngsters they’re relying on to fund their pensions, health care systems, public infrastructure, etc. Sorry Gerold, but on this one I think you’re way out to lunch – the situation we’re in is EVERYONE’S fault, including yours and mine (as we’re both somewhat complacent and have benefited from some degree from ever-growing public debts, unless you were raised by wolves in Northern Ontario and live completely off the land!).
“…Shifting toward low-wage service jobs—many of them for services catering to their affluent grandparents… Again, how is this the fault of seniors?”
– In seniors/Boomers refusal to recognize the systemic wealth distribution problems we have, because of their “entitlement” to what they think they have earned. Regardless if they have earned it or not, if they do not intervene in the system soon (i.e. allow their homes to collapse in value so younger generations can buy at affordable prices, recognize that the youth cannot afford the costs to support both themselves and the bloated/indebted/ponzi systems of national health care and CPP, and recognize that our infrastructure is in need of serious investment now if it is to last which only seniors/Boomers can afford), then the system will collapse and trust will be lost with it. The young will eat the old and take what they have, rather than the young looking to the old for guidance and opportunity in exchange for respect and care in their twilight years.
“…More than 40 per cent of existing private sector defined pension plans, which have guaranteed a secure retirement for thousands of today’s retirees, are now largely closed off to new employees… That’s true, but again it’s not the fault of seniors.”
– Well that sounds like entitlement… sort of like saying “we’ll get ours, but too bad, you don’t get yours”. Seniors should recognize that the system was always based on ponzi dynamics and that they were fleeced by older generations whom they supported (when it was still economically/socially possible). As a young person, I can tell you what I want to see from the older generation is to share in the sacrifice that is being asked of us – if seniors recognize pensions are ponzi schemes that the young are paying into and will never receive nearly the benefits said seniors will, rather than benefit from that inequity they should call it out for the ponzi scheme it is now, abolish it, and take their losses with us. Today’s youth will get nothing (we already know that), and today’s seniors will get far less than they thought they’d get, but at least everyone will have called a spade a spade and there will be no fighting over who gets more or less – we can get back to people getting what they’ve *earned*. Otherwise, I’m forced to pay into a system I know I’ll get nothing out of, resenting the seniors who are benefiting from my “hard work” all the while.
Got to cap it here (as if this wasn’t long enough as it is!) as I need to get back to work, and most of the rest of my comments would just be plays on what I’ve said above. But basically in summary:
– [PAST] youth of today face did not benefit as much as older generations did from the energy/financialization (i.e. debt) expansion of 1950 – 1990;
– [PRESENT] youth of today face greater current costs than the older generations did due to stagnating wages, increased costs of living and an increased demand for education to have access to decent-paying jobs;
– [FUTURE] youth of today face greater future costs than the older generations did from issues related to energy and financialization that have been delayed (i.e. pollution and the collapse of ponzi dynamics driven social programs, as well as the lack of infrastructure funding);
– [ACCOUNTABILITY] youth of today are not guiltless – there are likely as many lazy youths with entitlement issues as there are greedy seniors with entitlement issues – but everyone should recognize they have a part to play in this grand act and that SOME degree of their wealth/well-being was gotten from a society that exists only due to indebtedness and the benefits of energy endowment (i.e. oil); and
– [SOLUTIONS] older generations need to recognize they have benefited from a social system which is now no longer sustainable, and to continue to have the moral authority over youths need to also share in the losses/costs they expect the youth to bear – this will increase trust/respect from the youth to the older generations and bring us back to the place we should be (where the youth provide the work/care/respect to the older generations, while the older generations provide guidance & wealth to enrich the lives of the youth and give them firm footing to progress into fiscally/morally responsible seniors themselves).
Hopefully this Uber-Post, as critical of your article as it is, makes up for my lack of comments on your blog recently. Hopefully I’ll be able to comment with more regularity (and less verbosity) in the future. In the mean time, I’m going to have to try my hand at quinoa spinach egg breakfast casserole – looks tasty!
Excellent diagnosis, Dr. BVD, but your solution is questionable and your prescription is wanting. Your prognosis of our economic condition is correct, but you fail to make the case that our current economic malaise is the fault of seniors.
First, let’s be clear that the Macleans article sees ‘seniors’ as the parents of the Boomers i.e. seniors who are in their 70’s and 80’s and older. They’re the “Silent Generation” who lived through the Great Depression as children and fought in World War Two.
These experiences purged them of any tendency to feel that the world owed them something or that someone was going to look after them. In short, they do not have an entitlement mentality although they’ll fiercely defend what they earned. Why not? They earned it.
I’m a Boomer and not yet one of those seniors, but I’ll defend to the death their right to do with what’s theirs as they see fit. That’s their decision; no one else’s no matter how much someone else wants what they have.
Those seniors benefitted from the most from the exponential economic growth fuelled by cheap energy and available credit. As you say, both those factors are now history. And, EVERYBODY will suffer as a result, not just the younger generations. As well, it is a testament to pervasive media propaganda that fingers are being pointed at the Boomers as well.
Like I said in the article; when you point fingers, you have three fingers pointing back at yourself. The younger generation have met the enemy and it is themselves, but they haven’t figured it out or are in deep denial. This is part of the entitlement mentality I describe in more detail below. Their gullibility led them to believe many lies, the consequences of which are going to haunt everybody.
For example, they believe that more education guarantees higher income so it’s ok to go deep into debt with student loans. I don’t know if this is stupidity, insanity, gullibility or all three. Way back, during my university’s orientation day, the Student Council President told us that a university education was worth every penny we paid whether we earned an extra nickel or not. The unspoken lesson is there is NO guarantee a university education will increase earnings.
After graduating, I later dropped out of an MBA program because I thought it was Mickey Mouse. My career began in a lowly business clerk’s position that required only a high school diploma such was the competition among my large Boomer cohort. I rose through the ranks because I demonstrated ability, not because of my university degree.
We later hired five MBA’s only one of whom lasted more than three years. They were totally useless. They could talk about case studies, but couldn’t solve problems. So much for post graduate degrees!
Another example is the younger entitlement-minded generations believe they also deserve the good life because their parents had it good. You said, “the future they were promised will not come to pass.” You’re right; it’s not in the cards. We’re in an economic depression and all generations are going to suffer, not just the young.
By the way, who promised them a rosy future? Nobody promised me anything unless I earned it. I suspect my a**hole Boomer generation of helicopter parents helped create that misperception. Fie on the Boomers and fie on the youngster’s gullibility.
You also said, “don’t discount the fact that years of inflation with stagnating wages has likely forced many from younger generations to take on debt simply to have a similar standard of living as their parent’s generation.” Excuse me, but how stupid is it to borrow to pay for a lifestyle they can’t afford? That’s another example of stupid ‘entitlement mentality’!
Compare that to seniors who suffered through the Great Depression and the war years and learned to save and avoid debt. So, yes, the seniors DESERVE what they have because they earned it. Deserving what you earn is NOT an entitlement mentality, nor is wanting to prevent its theft. Younger generations’ expecting something for nothing IS an entitlement mentality. Can you see the difference? It’s called socialist envy.
Entitlement mentality has several characteristics:
– the feeling the world owes them a living
– expecting a ribbon or trophy just for showing up
– lack of appreciation for the sacrifices and efforts of others
– denial of personal responsibility
– inability to accept that actions have consequences i.e. no free lunch
– expectation of government intervention to solve personal problems
– expecting to receive rather than achieve
Let’s disabuse this mentality. No one is entitled to anything from anyone. Period! It matters not one whit what anyone thinks they deserve. That’s for kindergarten. This is life and life isn’t always fair.
I also disagree that you repeatedly state that all retirement plans are Ponzi schemes. Some, like the U.S. social security system certainly are as it’s unfunded and relies on current (declining) tax revenues to pay for (increasing) pension payments which will balloon with retiring Boomers. It’s broke.
You also mention the Canada Pension Plan (CPP) contributes to the deficit. Where did you get that from? CPP is funded with real investments and it’s in excellent shape without relying on the taxpayers.
You say all pension plans are Ponzi schemes. No they aren’t. CPP isn’t. Corporate defined benefit plans are also based on real investments although businesses are required to ‘top up’ shortfalls. They don’t like that, but they agreed to it and it formed part of the decision by workers to accept those jobs on those terms.
Defined contribution plans are also not Ponzi although their poor performance due to artificially low interest rates and past market performance keeps many Boomers working longer than they want. Again, none of this is the fault of seniors.
You ask, “Who benefited from the expansion of government services from garbage collection to street cleaning to public sewers/sanitation? That would be seniors. Yes, we young folk benefit from that too, but seniors have enjoyed it for MUCH longer than we have.” Of course they have; by definition they’ve LIVED LONGER! Since when is that a crime?
Be careful, because you’re doing the same thing the Macleans writer did. You accurately point out the discrepancy between the good economic conditions that seniors enjoyed versus the poor economic conditions that younger generations face and then, with a tremendous leap of logic, you blame the seniors for this discrepancy. That’s a ‘non sequitur’, Latin for “it does not follow”. It means your conclusion does not follow from your premise. That’s like saying the sky is blue therefore the moon is made of green cheese. Yes, the sky is blue, but that has nothing to do with the constituency of the moon.
Using the same leap of logic you imply that since seniors are supposedly well-off, they should be forced to share the younger generation’s pain. Say what? That’s more socialist envy. Besides, if you robbed every senior of every penny they had, it would fund our spendthrift governments for maybe a day and then these same governments would continue going deeper in debt.
How many times must I repeat that we are past the point of no return? There isn’t enough money in the whole world to pay the interest on accumulated global debt, let alone touch the principle. We are long past the point of no return.
There are numerous causes of our economic problems which I’ve listed over the years the least of which are the end of cheap energy and easy credit. Central banks, fiat currencies and irresponsible, spendthrift governments also take their share of blame.
Also to blame are the greedy, sociopathic, ultra-wealthy elites and their bankster bag-men and bought and paid-for politicians who refused to allow healthy market forces of the ‘creative destruction’ of insolvent companies so their remains could be absorbed by stronger companies. Instead we now have zombie institutions lacking the capital investments to grow healthy economies that would benefit everyone. We’ve lost price discovery and we’re left with fraudulent stock markets buoyed up with corporate buy-backs instead of investments that we need for healthy growth.
So tell me, how can this be blamed on the mass of seniors? Short answer” it can’t. But, don’t worry, seniors will share the pain. We all will. There’s nothing we can do to ‘unshare’ it. We’re all screwed! The only difference being the speed with which it hits.
Those who with less net worth will feel it sooner than those with higher net worth, but in the end we’re all going down in the same ship. The only difference is which end goes down first. The other end of the ship will follow in short order.
We’re on the sinking Titanic with insufficient lifeboats and the few we had were stolen by the ultra-wealthy elites.
Seniors in their expensive lifejackets are bobbing in the waves. They have at best a few minutes before they succumb to the icy waters.
Boomers are on the tilting Titanic’s top decks holding tight to the railings and the younger generations are locked below decks screaming for the seniors to give up their lifejackets. Fat lot of good that’ll do them! The only thing that’ll save anyone are lifeboats and they’re all gone.
I’m asking the Titanic’s band to play louder to cover the screams of the passengers. I find their screaming annoying because for seven long years I’ve told people we’re in an extended depression, to get out of and avoid debt, sell the house if they have one and rent; buy some gold or silver (on sale again), stockpile food and necessities, and prepare for hard times. Very few listened.
However, that’s not my problem; that’s THEIR problem. I might decide to share or not and I’ll decide who to share with, but that’s my decision to make, no one else’s. Any entitlement-minded socialist who thinks they deserve what’s mine had better be well armed because the only thing they’re entitled to is double-O buckshot if they try to steal what’s not theirs.
And, anyone who thinks mine is an entitlement mentality had better re-read the entitlement mentality characteristics I listed above and see if they fit. They don’t.
As I said before, those who say we never learn from history are really annoying to those of us who do because we have to listen to their whining about the mistakes they make as a result of not learning from history.
Stay tuned. It’s going to get a lot worse.
“…but you fail to make the case that our current economic malaise is the fault of seniors”
I do believe everyone is to blame to some degree, as we all contribute to the society we live in and the problems we face. Why I point the finger and lay so much blame at the feet of Seniors (i.e. Silent Generation, those that are still alive/functional) and Boomers is they’ve been the architects of many of the problems we now face, as they’ve been on the planet much longer than my generation (i.e. end of Gen-X / start of the Millennials) or younger generations have been.
“… These experiences purged them of any tendency to feel that the world owed them something or that someone was going to look after them. In short, they do not have an entitlement mentality although they’ll fiercely defend what they earned.”
1st – perhaps there was a time that the Silent Generation pulled up their sleeves and went to work (likely after WW2), but 50+ years of energy boom and largess would (in my opinion) have the ability to undo at least some of the “hard work” ethic and/or “I have to do it for myself” mentality learned in their youth.
2nd – consider that the Silent Generation was, for the most part, ignored as children. Bigger things (war/death/etc.) were going on. While that may have contributed to a “hard work” and/or “I have to do it for myself” mentality, consider that it might have also contributed to a “nobody’s watching; I can get away with whatever I want” mentality as well. Of course, this potential outcome is rarely considered/suggested, as I don’t see many Seniors / Silent Generation authors who feel the need to be critical of themselves (only, seemingly, the younger generations and their lack of “hard work” and/or “I have to do it for myself” mentality).
3rd – consider that the Seniors never really earned anything. Look how much debt has been racked up since the 1960’s, the amount of environmental destruction that has occurred, and the growing fragility of our entire system. I would suggest that a great deal of the Seniors / Boomers “wealth” is actually purchased on credit (that my generation and younger will find themselves having to pay off long after the Seniors / Boomers decide to take a long dirt nap).
“…but I’ll defend to the death their right to do with what’s theirs as they see fit.”
Generally I would agree with you, as property rights are fairly enshrined in Libertarian thinking and I tend to lean that way. But do consider the concept of “odious debt” – i.e. debt incurred by a regime that does not serve the best interests of the nation. In the case of the “Grey Regime” (you old folks!), I would argue there are many debts (again, financial/environmental/societal) being taken out in the younger generation’s name that they do not necessarily benefit from and thus have no intention of paying back.
As I mentioned in a previous post, any pension you or anyone else has “earned” is not actually there until the younger generation of workers pays it to you. Anything you paid into your pension plans was already paid out to the (now gone) G.I. Generation and is now being paid to the Silent Generation (note – if everything was liquidated now, I’m sure there’d be SOMETHING left there for you, but not what your pension currently promises you every quarterly report they mail out to you).
The minute everyone realizes which generation will not benefit from the ponzi dynamics of pensions, the whole jig is up – whatever you thought you earned will be irrelevant, as pension plans will start to become insolvent as workers protest payment into said ponzi schemes.
“…Those seniors benefitted from the most from the exponential economic growth fuelled by cheap energy and available credit.As you say, both those factors are now history.”
Perhaps the younger generations are looking to older generations for an explanation as to why all that economic/energy growth was squandered and why so many of today’s problems were addressed so haphazardly in favour of said economic/energy boons being invested in consumer lifestyle, larger homes, fancier cars, etc.
When someone who benefited from such gains says “oh, well, that was the past” it sounds to me like they are taking no accountability for the decisions they made in the past with regards to the problems (and lack of solutions) we see today. That’s not to suggest some good work (and thus good choices) weren’t made with those economic/energy boons; but I think you would be hard pressed to argue a great deal of that wealth wasn’t invested in leisure and other wasteful pursuits.
“…The younger generation have met the enemy and it is themselves, but they haven’t figured it out or are in deep denial. This is part of the entitlement mentality I describe in more detail below. Their gullibility led them to believe many lies, the consequences of which are going to haunt everybody.”
I would argue that description also applies to the Boomers (the Silent Generation / Seniors might get out in the nick of time, depending on when the crash finally comes). They are just as gullible if they think they’re going to get what they’ve “earned”.
if anything, I applaud the younger generation’s lack of motivation to support the system – it’s corrupt, failing, and absolutely needs to die before we can build something new that actually functions in a manner than benefits everyone in a more egalitarian manner.
It’s just a shame that more young people don’t get back to the land, learn skills that will be actually valuable (e.g. farming, hunting, personal medicine, etc.) once the system no longer can provide for everyone. Instead they leech off their parents and expect to be provided for; I think it’s fair to criticize anyone who displays that attitude (whether it be young people leeching off their parents, or older people leeching off a ponzi scheme designed to enslave the youth so they can enjoy what they think they’ve “earned”).
“…they believe that more education guarantees higher income so it’s ok to go deep into debt with student loans.”
To be fair, I believed this. I think you forget what it’s like to be 18 and going off to school (now 17, as they’re sending them even younger). You don’t really know how the world works, and if the youth of today are anything like I was, they don’t know what to do but are pressured into University by their families (mainly parents). I don’t really think they believe ANYTHING at that point – they’re just doing what they are told. In my case, I was lucky and university was a gamble that paid off – but I didn’t take some artsy-fartsy program, I studied Commerce (which is artsy-fartsy garbage in its own right, but lucky for me there was a demand for office types when I was graduating).
I also remember all the claims the schools make about how many of their graduates get jobs and make great money, though the details are always so vague (if you can get your hands on them at all). I’m not suggesting people who are gullible (i.e. “if I go to University, I’ll be a millionaire – guaranteed!”) shouldn’t be punished for their idiocy, but what of the universities who flog the young with false advertising and promises of future employment – the same universities who are ran/operated by the Seniors/Boomers of today, who also blatantly push their young towards University as if its the only option?
Don’t get me wrong – I hear your argument, and the youth of today need to open their eyes at a much younger age if they want to understand the mess they’re getting themselves into. But as a middle-aged man (between youth and senior-dom) I look towards the Seniors/Boomers as the culprits here – they’re in the position to guide the youth of today, and they betray that trust by thrusting the young towards the money-making machines we suggest are institutions of higher learning.
“…My career began in a lowly business clerk’s position that required only a high school diploma such was the competition among my large Boomer cohort. I rose through the ranks because I demonstrated ability, not because of my university degree.”
I don’t see why you think that what you went through in your youth is drastically different than today. The only difference I see is you had the OPPORTUNITY to drop out, not incur incredible University costs, and still find gainful employment (even if it was at the bottom of the totem pole).
Most youth today do not have that option – they have to attend universities even to GET something as lowly as a “clerk” job, and they have to rack up thousands in debt to do so (and why is that? Increased costs at the universities by Seniors/Boomers who demanded more – more wages, more vacation, more pension, more health care, more more more…).
I think were I criticize the youth is that they fail to recognize that not everyone can go to university, and not everyone can have a cushy office job. If they recognize this and continue to attend overpriced universities just to get a crappy degree to get a lowly “clerk” job, then they deserve what they get. But looking to the Seniors/Boomers, I expect them to get over themselves and give some credit where it is due – it is MUCH harder (if not impossible) for youth to have the same experience you (and your generation) had with regards of dropping out of higher education and still expect to find gainful employment.
“…By the way, who promised them a rosy future? Nobody promised me anything unless I earned it. I suspect my a**hole Boomer generation of helicopter parents helped create that misperception.”
I definitely agree with you there. Its a narrative I heard constantly growing up – “university is a one-way ticket to the good life, son”. Surprisingly, my folks sort of turned out to be correct, but only because I was probably one of the last generations to enjoy the benefits of what an undergraduate degree can provide (most undergraduates I meet now seem to consider going straight into a post secondary degree given the difficulty they encounter finding gainful employment), and perhaps because I’m slightly above average in comparison to my peers (though that might just be arrogance – its hard to say, but of my dozen friends I’ve kept in touch with since University, none of them seem to share the concerns I have about the global economy, energy, virulent diseases, systems analysis and understanding how things work / feedback, social psychology, history of human empires, and just the “big picture” of how our society functions – mostly it’s just weekend drinking and talking about whatever show they saw on TV the other night).
But I recognize the future is not rosy, and I do my best to get that message out there. Most people meet that message with hostility – who am I to tell them everything their parents and the leaders of their society (Seniors/Boomers, by the way…) told them is false?
“…Excuse me, but how stupid is it to borrow to pay for a lifestyle they can’t afford?”
If it something like iPods or new cars, I completely agree. But when people are forced to borrow for the basic necessities like food, water, energy, etc., (and some are – thank goodness I don’t live in some of the 3rd world pockets of the USA!) then the Seniors/Boomers should be taking notice because that’s a complete failure of the society they’ve shaped and are currently at the helm of.
I also would, again, suggest that Seniors/Boomers take notice of the fact perhaps they too had to borrow to have a lifestyle they couldn’t afford – it’s called a mortgage, and virtually every Senior/Boomer took one on at some point in their lives to purchase a house they couldn’t afford / didn’t deserve, yet enjoyed all the run-ups of asset appreciation during the inflationary 1950’s – 2000’s.
Today’s youth have not (and will not) have that same opportunity, and they know it – thus they channel whatever meager funds they do have into iPods, new cars and other status symbols to make up for the fact they probably will never own a house (unless they inherit it from their parents). They shouldn’t be scored for this – why would they blow their brains out working to buy an incredibly overpriced asset that is almost guaranteed to depreciate in value, other than to continue contributing to the system (and thus propping up housing prices) set up by the Seniors/Boomers? Continuing to support that predatory system is what I would consider stupid.
“…Compare that to seniors who suffered through the Great Depression and the war years and learned to save and avoid debt.”
Disagree. You learned to save and avoid debt (as an individual), but the Silent Generation were the architects of ever-increasing debt within the system set up by the GI Generation. Personally, I think debt creates its own demand – if banks/lenders make debt available, people will take it. Its only after incredible system crashes like the Dark Ages when people finally learn their lessons about debt.
“…the seniors DESERVE what they have because they earned it. Deserving what you earn is NOT an entitlement mentality, nor is wanting to prevent its theft.”
No, but assuming you earned anything does seem arrogant and reeks of entitlement. Question – how can one really know what they’ve “earned” when we live in a world were prices are so disengaged from reality? Do you really think you’re “worth” the $60,000 per year (or whatever you were paid) in your heydays of employment? A Chinese worker likely makes one tenth of that per year – do you really think you’re “worth” the labour of ten Chinese individuals?
The point I’m trying to make is that it’s all bullshit promises. We don’t know what we’re worth, we don’t know what we deserve, and we sound ridiculous when we suggest we do. The only thing we really do know is what we were PROMISED – and that’s exactly what you (and so many others) likely feel what they are entitled to. You were promised X if you worked and supported the system your whole life, and if you don’t get it you will feel robbed – even though the truth is probably closer to the fact that the system has been bankrupted for some time, and it’s your own gullibility that has pushed you to continue to support it and expect to get anything out of it (which will come at a cost to the younger generations, which you conveniently label as lazy and entitled themselves – whether you recognize it or not, you’re pushing them to be harder workers because you must know to some degree that the value of everything you think you have earned is in some way tied to the productivity of future generations).
“…Younger generations’ expecting something for nothing IS an entitlement mentality.”
I actually like to know what it is you think young people think they are going to get? Again, I’m middle aged, but some of the younger people I’m starting to talk to are aware of the fact they won’t be getting anything from any pensions and wonder if the social systems such as universal health care will even be in place by the time they get to my age.
I’m in the middle, and I see entitlement mainly coming from Seniors/Boomers. I think the onus is on you to show what it is the youth think they are so entitled to. I think you attempted to, but I don’t know that I see the youth falling into the bullets you provided…
“…Entitlement mentality has several characteristics:”
– I think (some) young people are starting to recognize that the world isn’t going to give them a living, and thus they’re venturing out on their own to find some sort of living of their own (it certainly doesn’t conform to what most people see as making a living, as those opportunities to fall ass-backwards into a job straight out of high school do not exist)
– I think the youth of every generation wanted a trophy just for showing up at some point in their lives; its natural to want to be recognized for doing good work, and honestly I think sometimes the youth get shortchanged by those older individuals who are bitter/jaded they did not get the recognition they deserved when they were youths themselves
– Lack of appreciation in today’s youth may be because they don’t see you making any sort of sacrifices or effort for them; they see you (or at least your generation) pushing them into very costly education with no guarantees of gainful employment, knowing full well they’re going to inherit all the economic/environmental/sociological problems the older generations created and/or failed to solve with the Earth’s resources that WON’T be around once the younger generation reaches senior-dom
– Not supporting a corrupt/ponzi system because they know it exists to exploit them, and instead going off to find their own way actually suggests a great deal of personal responsibility on the part of youth (though, admittedly, many youth might not be doing just that and if they are their approach may not suggest it to you)
– I think anyone who’s over the age of 30 today is expecting some sort of “free lunch” in the form of pensions, health care, and other socialized benefits despite the fact we have not earned it; again, it rests on the idea that we actually think we know what we’ve “earned” in a world of crazy valuations
– lots of young people (in the US) are getting on board the Libertarian bandwagon, and even those that aren’t espousing Libertarian values still seem to be protesting against the controlling machinations of government; if anything, I think it’s the Seniors/Boomers that look to government intervention more so than the youth\
– I think if you (and me, and all of us over the age of 30) aren’t careful, then the youth of today will have a big achievement in denying us anything we think we’re going to receive…
“Pensions are ponzis”
I’ll have to come back on this on another day, as I think I can do a whole post on it. While I’m talking more about Defined Benefit, Defined Contribution isn’t exempt either. And CPP has its issues, despite what the cheerleaders suggest.
Also, it’s not just about the assets in the fund – its the idea that those assets will continue to hold their value if more and more people don’t support the underlying infrastructure (i.e. stock markets will crash if the youth of today all drop dead or up and disappear and do not take over the productive jobs of the real economy that need to be done).
“…You accurately point out the discrepancy between the good economic conditions that seniors enjoyed versus the poor economic conditions that younger generations face and then, with a tremendous leap of logic, you blame the seniors for this discrepancy.”
Then you misunderstand what I am saying. I am not blaming Seniors/Boomers for a poor economy (at least not completely; there are demographic & physical limits to energy that are out of their control contributing to our decline), but I am blaming them for eating all the Seed Corn of the young. Rather than save all the boons of growing resource extraction and economic growth, the Seniors/Boomers have devoured it all and in fact ran up incredible debts – while we both agree the young are stupid to take on huge debts for university that will likely never repay themselves, these debts are a drop in the bucket compared to what Seniors/Boomers have enjoyed over their long and hedonistic lives. In fact, I’d say it is a bit hypocritical to judge the youth for doing something they watched their parents/grandparents do for the majority of their lives (or at least the last 30 years).
Have to cap it there – duty calls.
But will touch on the rest in a second part.
Regarding CPP as a ponzi scheme:
Its Ponzi in the sense that anything I (or anyone else) pays into the system is not segregated into an account in my name. It’s a pooled risk system (one that has only been successful by shouldering riskier and riskier assets), and when we experience a huge market correction the value of the assets in the fund will not meet the expectations of what the actuaries are forecasting today. That means people who are still working will have to contribute more to ensure those who are collecting continue to maintain what their payouts are currently fixed at (otherwise, the fund would quickly deplete and there would be nothing left – but that’s sort of my point, in that CPP is not sustainable and will only be maintained by forcing the younger generations to pay larger amounts into it).
Unless the fund are yours in your own retirement plan (i.e. an RRSP), I suggest it is a ponzi scheme in so much that a certain segment of fund members (i.e. those closer to retirement) can only be paid out what they’ve been promised if another (typically larger) segment of fund members continue to pay into the fund. Those members have no guarantee of getting anything, as most of what they pay into the fund today is likely being used to cover the liabilities of the fund (i.e. the payouts to the retirees).
As far as it being the “fault” of seniors, no, they’re not solely to blame – but they are complicit in a system which directly benefits them at the cost of younger generations. Eventually someone (either today’s seniors, my generation, or younger generations in the future) will have to take a loss because these systems will reveal themselves to be unsustainable. Anyone who recognizes should also recognize that it’s a pretty crappy line to say “well, as long as I get mine now… if it fails later, it’s their bad luck”. If an old person suggested that to me, as younger person I’d suggest they take a long walk off a short pier. They should be willing to share in the losses and forego some of their “promised” wealth now, as they recognize the system itself is flawed and someone is going to get f*cked by all these unpayable promises eventually.
“…Using the same leap of logic you imply that since seniors are supposedly well-off, they should be forced to share the younger generation’s pain.”
Not just because they are well off, and not just because they are part of society (in fact, they are the leaders/administrators of said society) and thus should bear some responsibility for it. But because a large part of their “wealth” that makes them “well-off” is borne on the backs of those younger generations who feel the pain directly from it – any debts incurred before the 1990’s were gains in your generation’s “wealth” but liabilities put onto my plate as a grade school student. And energy your generation dug up (or purchased from afar, again likely through debts incurred for younger generations to pay off) prior to the 1990’s is also at the expense of younger generations – all the low hanging fruit has been eaten, yet all the problems as a result of that action has been left at the feet of my (and younger) generations.
At least the GI Generation, coming back from the war, used the money & energy they had at their disposal to create great works of infrastructure and egalitarian institutions that were meant to be for the betterment of all – that is a reasonable use of money & energy as both the current and future generations benefit from it. But since the GI Generation moved on, it’s been the Silent Generation and the Boomers who have allowed those great works of infrastructure to fall into disrepair (at least in the US; Canada has fared slightly better in this sense) and allowed their institutions to be corrupted through more and more debt.
Bottom line – if you’ve ever criticized your parents or your grandparents for doing something they directly benefited from but caused grief for you (and to make matters worse, they were unaware or nonchalant about the problems they caused for you), then you might be able to understand how the younger generations feel towards today’s Seniors.
It’s ignorant to suggest that today’s older generations didn’t play some part in contributing to the “younger generation’s pain”. That doesn’t mean as part of the the “younger generation” I expect Seniors to give up everything they have to fix these problems for me, but recognizing they contributed/created these problems and have some role to play in them is something I think is a fair expectation (but given the “entitlement” attitude I see from Seniors, I doubt my expectations will be realized).
“….Besides, if you robbed every senior of every penny they had, it would fund our spendthrift governments for maybe a day and then these same governments would continue going deeper in debt.”
Nowhere have I suggested that government is the answer; in fact, the answer is likely far less government, as they’re a large contributor to the waste/inefficiencies/malinvestment of our current system.
“…How many times must I repeat that we are past the point of no return? There isn’t enough money in the whole world to pay the interest on accumulated global debt, let alone touch the principle. We are long past the point of no return.”
Indeed. And who made the decisions to run up these incredible debts? Who enjoyed 60+ years of prosperity while the rot of energy-reliance and debt-fueled growth leeched into the system?
You mentioned earlier in your comments “…Those seniors benefitted from the most from the exponential economic growth fuelled by cheap energy and available credit. As you say, both those factors are now history.” I touched on it before but I’d like to revisit it now, as I think there’s an argument to be made that most of the grown after the 1970’s was “fake” growth in so much that it was funded through debts/promises to pay in the future that will never be honoured. The Oil Shock of the 1970’s was the wake up call to your generation that the lifestyle that generation was leading was unsustainable, but rather than make wholesale changes to the system the Silent & Boomer generations decided to rack up the debts in the 1980’s to allow that lifestyle / standard of living to continue.
My whole life / existence has been one of living in a time of “overshoot” (i.e. living well beyond one’s means). Its taken me nearly 30 years to realize that and to try to “deprogram” myself to learn how to live in a more sustainable manner (and I still have miles and miles to go). Again, not trying to make excuses for the younger generations (they have to wake up to reality as I did), but I think it’s BS to throw any of the blame at their feet when their whole lives have been one giant lie of unsustainable prosperity – one that was constructed and perpetuated by the Silent & Boomer generations.
The Silents and Boomers need to be held to account, and I think eventually the younger generations will do so (particularly the more the older generations try to distance themselves from all the problems they’ve caused and throw it onto the backs of the young). Old people’s sight tends to fail, and their trigger fingers for their 00 Buckshot loaded shotguns tend to get weak with age…;)
“…So tell me, how can this be blamed on the mass of seniors?”
Everything you mentioned (Central Banks, fiat currencies, government, wealthy elites, banksters, zombie institutions) is the fault of Seniors – I can’t understand how you fail to see that all of those issues are human issues brought about by the failure of a generation of individuals (a failure of morals and of honesty, quite frankly). Perhaps you as a person didn’t fail, but so many of your peers (who run the Central Banks, print the fiat currencies, receive the benefits from the government, have become wealthy elites, benefit from bankster profits, and work in zombified institutions) certainly have. If anything, only the youth can be free from blame as *THEY HAVEN’T HAD THE OPPORTUNITY YET TO FAIL AS YOUR GENERATION HAS*.
Anyone over the age of – I don’t know… let’s say 25? – has in some part contributed to the sick, dying and immoral system we live in (myself included). The older you are, the more you’ve contributed to this massive failure of a society and the more you’ve likely benefited from it (in general). I really don’t know how you can make any other argument, unless you can somehow show me that today’s Seniors had NO influence over the way today’s society has formed itself.
And to go back to my earlier comment about the Silent Generation, it kind of makes a lot of sense to me… a generation of kids who were ignored/neglected while their parents went to war would certainly have learned they can get away with a LOT and not have to take accountability for much simply by being quiet. Nobody ever called them out on it till now.
“…Those who with less net worth will feel it sooner than those with higher net worth, but in the end we’re all going down in the same ship. The only difference is which end goes down first. The other end of the ship will follow in short order.”
Yes yes. It’s unavoidable, I know. But that doesn’t absolve Seniors for being the ones who were the Captains of the Titanic; the ones who steered us into the iceberg.
While its pointless for the younger generations to focus on that fact (as it will just lead to anger/rage), it is disguising to watch the older generations to try to avoid responsibility for their actions. In fact, it’s likely that attitude from the older generations that will push the younger generations to be so angry and point their fingers at the older generations that much more.
Taking accountability for one’s failures / contributions to a failure would at least be respected by the younger generations, but I doubt we will see that kind of admission from a generation of Seniors who benefited so greatly from destroying the planet for future generations and blaming external factors for their failures with little or no remorse.
“…However, that’s not my problem; that’s THEIR problem. I might decide to share or not and I’ll decide who to share with, but that’s my decision to make, no one else’s.”
While I agree, that’s a very naive comment. You’re right – it is your decision to make, but it is your problem in that the have nots will quickly find the haves. And whatever decision you make will have repercussions – sharing will build up your social capital within a group (which is another form of wealth) but may leave you with not enough to survive the coming winter; to not share will single you out and push people to question how you obtained your wealth and if you are justified in having it in the first place.
I can imagine many young people understanding the concept of Odious Debt and seeing any wealthy older person as someone who earned their “wealth” off the backs of the young; they may want to take that wealth back. We can all talk big about 00 buckshot and protecting what we have, but I think the real truth is none of us every want to be in a scenario of life-and-death confrontation.
Personally, I am following yours (and others) advice to stay out of debt and save what I can – but I know anything I do save will likely go towards a community, as bunkering down with all the food, gold and guns in the world won’t do me a lot of good, and it certainly wouldn’t be a life worth living.
“…And, anyone who thinks mine is an entitlement mentality had better re-read the entitlement mentality characteristics I listed above and see if they fit. They don’t.”
– you feel that the world owes you a living in the form of a pension; whether you think that “wealth” was earned or not is irrelevant – you intend to receive that money and live off of it (if I’m wrong, please enlighten me how you expect to live alone in your 70’s/80’s and still be functional without any pension coming in).
– I’m not sure what a “ribbon” or “trophy” translates into (a pension? respect? recognition?), but you kind of did just “show up” Gerold… your life probably is thousands of times better than those who “showed up” in the impoverished 3rd world or the lives of young men who went off to fight World Wars (and I’ll be the first to admit my early life has been even cushier than yours was, but I’m also aware that my future life might be closer to that of an impoverished 3rd worlder or a man from the GI Generation who had to go off and fight a war).
– Unless my arguments have changed your thoughts on the matter, you seem to lack appreciation of the sacrifices young people have had to make (regardless of what you think, most of them probably don’t want to be “career students” or coffee house baristas living in their parent’s basement rather than working at a good paying job and owning their own homes and having their own families) and will have to make in the future.
– Again, unless my arguments have changed your way of thinking, I think you deny personal responsibility for your (or at least your generation’s?) complicity in today’s failed society. You’re a critic to be sure, and you may not be as willingly complicit as most of the “Sheeple” out there, but you still benefit from the exploitation of the 3rd world and the rape of the Earth through resource extraction like everyone else in our imperial Western society. I recognize that while I rally against the system and scream until I’m blue in the face about how crappy a society we are, I am still a part of this society and I benefit from all the bad things we do on a daily basis.
– Actions certainly do have consequences; “good economic conditions” don’t just come out of the blue, they come from pillaging the Earth’s energy resources and running up debts that your generation expects the younger generations to shoulder. The Silent and Boomer generations have only had their “free lunch” by putting the tab on the backs of the younger generations – I hope that is apparent to you by now.
– I can’t fault you on expecting the government to do anything (you’re about as anti-government as they come!), so I guess I come up short on this one; but I do suggest you take more of a look at the structure of CPP and see how it is generally “Ponzi” in design, or at the very least unsustainable in a way that a large group of contributors will get screwed over by a smaller set of contributors (who will make off with whatever wealth is left in the fund)
– Expectation of a pension certainly sounds like an expectation to receive; a real achievement would be identifying how the older generations can work with the younger generations to mitigate the current problems we face as much as possible (we cannot escape our fate, but there’s certainly a lot we can do to mitigate the circumstances and make it bearable! And trust me, I’m not usually a positive-thinking / rainbows-up-my-@ss talking kind of guy!).
Sorry, these are probably observations that will put you on the defensive as I know nobody likes to be called (or consider themselves to be) entitled. Hopefully you’ll know I say it with good intentions, even if they come across as insulting (and of course, I don’t really *know you*, so I could just be misunderstanding some of the things you’ve said or reading too much into some of your statements… so please forgive me if they are a bit harsh). But I will say this – it’s hard to be a critic, but its DAMN HARD to be a critic of oneself. it kind of sounds counter-intuitive, but I think a person has to have a very good understanding of themselves and some sense of self-esteem/self-worth to be able to look in the mirror and say “man, you’re a piece of crap! And here’s why…”. But I also think it’s the only way someone can learn something new about themselves and grow as an individual.
Anyways, if you feel up to it, I’d love to read your critique of the “middle generations” – i.e. the people around my age who aren’t quite Millennials (the teens & 20 somethings?) and not quite Gen-X’ers (40 somethings?). Or heck, even the Gen-X’ers, as they’re sort of the in between generation who is now starting to inherit some of the reigns of power of institutions/government (though most of that power is still clearly in the hands of Boomers and a few remaining Silents). Gen-X’ers might have been kids in the 70’s and thus saw a bit of the reality of our situation (i.e. we consume far too much energy and live unsustainable lives), but likely became teens in the 80’s and quickly saw (and enjoyed) the proliferation of debt-fueled growth.
As my working peers, I see the older Gen-X’ers (mid to late 40’s) as the ones who still seem to think they’ll get something out of their pension plans and social security systems like universal health care, OAS and CPP. They’re also individuals who I see being passed over for management positions as Boomers are forced to work longer and avoid retirement, which must irk them to some degree. It’s sad, as I see them being the ones who will be most disappointed by collapse… at least Millennials are starting to clue into the fact that there’ll be nothing left for them once their time comes, but I feel like the Gen-X’ers still have hope something will be done to fix everything so they get theirs like the Silents and older Boomers are (young Boomers might also get screwed over, but they’ve arguably enjoyed a lot of the benefits the Silent and Boomer generations experienced).
Yes, if the BIG crash comes when Martin Armstrong predicts (2032), it seems like someone who was born in the 1940’s / early 1950’s and lives for 80 years only to die at the end of the 2020’s would have been a person who was “dealt the best hand in life” – i.e. saw the greatest gains in human history in terms of energy/financialization/social support systems, without having to live through the cataclysmic collapse of 2032 onward…