The impact of baby boomers


I haven't seen this posted or discussed hardly anywhere and I'd be very
interested in the groups take on my perception.
Part of what has been driving our expanding economy over the last 60 years
has been the growth of the baby boomers. As they've grown they've needed
cars, homes, TVs, clothes and all the stuff we all need and use daily.
This increase in consumption led to an increase in production. Hence, we've
had a lot of stuff produced which led to an increase in jobs.
But now, as the boomers are retiring and the following generations are NOT
continuing to expand - the boomers had fewer kids than their parent's and
the boomer's kids are having fewer grandchildren - it seems to me that our
economy will have no option other than to contract.
Besides the point that there are fewer consumers following the boomers, the
boomers themselves are using and buying less in retirement, and as they pass
on they will leave a plethora or homes, buildings and other hard assets like
cars, furniture, property and such to their heirs. Which may reduce the
consumption of the inheriting generation.
I am curious if anyone else has noticed or considered this? Will the
passing of the boomers cause our economy to contract, and if so how long
until we see it get back to where it was?
I know that none of know the answer to these questions. I'm just curious if
anyone else has contemplated this.
Gene E. Utterback, EA, RFC, ABA
Reply to
Gene E. Utterback, EA, RFC, AB
I just heard someone talking about this the other day. That makes sense. Unless we keep our immigration unchecked. Too bad the boomers didn't control their wasteful spending and instead paid to get our infrastructure in order. What happened is the equivalent of people getting old without paying down the mortgage, then wondering why they have no place to live in their old age.
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Reply to
Wallace
Devils advocate POV:
For the economy to contract population would need to decrease. If population stays constant, then the past expansion is at capacity for the current level of production needed.
Boomers bought houses as a sign of wealth... those houses are not being vacated and turned into empty lots Electronics are a never ending technology which can never reach full capacity. I know those ipods, DVRs and cell phones were the reason for the expansion in the 1950's (right? LOL). Sure everyone in the 50's had a television and that was considered "rich", now we have 4-10 TVs in every house, so I could see more of that level of expansion (everyone ready to own 10 cell phones by next decade?).
In addition the hidden taxes 40-60 years ago were lower (the current SS tax is 3-4X higher than it was when the program was first introduced and I don't think medicare tax existed in the 1950's either.
So a person could probably draw some comparisons to the increase of entitlement programs and the downfall of the economy just like the contraction of the population for consumption. Interesting thought...
Reply to
jIM
messagenews:hil131$do3$ snipped-for-privacy@news.eternal-september.org...
brief material to provide context for your remarks, the previous post is deleted.  Thank you.
I guess I am one of those baby boomers you are talking about and I have a whole different view from yours.
I really think the problem about not spending enough on infrastructure comes from funding for our foreign wars, starting with Vietnam. What a horrible waste of human and financial resources and ditto for both Gulf wars. When we retreated from Vietnam we left billions and billions of dollars (in 1970 dollars) of hardware in our panic retreat not too mention the decimation of their environment with Agent Orange, a serious problem that we may be asked to fix. Fourty years later and we are still paying for that war. Also our veterans who fought in VN and were exposed to Agent Orange are asking to be treated for ailments that were connected to exposure to Agent Orange. And that is just one example of the medical costs of war. Wars, not baby boomers, is something that continues to drain funding from infrastructure.
I thought it was ironic that Robert McNamara, the architect of the Vietnam War, said a couple of years ago in his film "The Fog of War"..."Oops, I made a mistake!" Back in the 60s many of us were trying to tell him that, but no one would listen.
So blame the lack of infrastructure support on our politicians who seem to find the devil and evil lurking behind every tree.
The infrastructure problem is so bad in this country that in the four states I have lived in, the drinking water could not pass minimum federal standards for safety, necessitating the use of bottled drinking water. I continue to use bottled water for drinking purpose because of a recent salmonella outbreak in the city water supply.
So lets start supporting infrastructure funding and get out of the world policing business! I do not baby boomers, like myself, are the problem here!
Larry
Reply to
Larry
:
I remember reading an article some years back stating that "when the boomers begin to retire in 2008 they would take their money out of stocks and cause the market to decline"
Right year, wrong reason.
No I can't remember the source
Reply to
Avrum Lapin
(1) The so-called echo-boomers, or GenY, now entering the economy are more numerous than the boomers. Its the uneven gap in between which might affect the economy.
(2) Post-boomers are 100% responsible for financing their retirements and told that in their 20s. The boomers are the transitional generation between corporate socialism (benefits) and this new paradigm. So they only partly have 401ks etc. and werent beerated to save and invest until 1990s. Theres expected to be continuing pressure to save and invest for retirements, homes, medical, kids education, etc among the newbies that will drive markets.
Reply to
rick++
Yes, there is always one more war that is absolutely essential for national security and survival. And at first, every war seems that it will be just as easy and as temporary as going into Grenada and Panama turned out to be. But, like the overly optimistic family who buys a big house with big mortgage payments, it usually turns out that unexpected things happen, and the long-term cost is a lot more than predicted.
Reply to
Don
and when all social programs were ramped up 4 workers supported 1 retiree but it is now moving to 1 worker supporting 4 retirees. demographic shifts spell big pain with current welfare system that discouraged baby boomers from saving.
Reply to
Yadda
Your economics is backwards. A desire to consume does not magically cause production to occur. One billion Indians consume less than 300 million Americans because they are less productive. The real problem is that ratio of workers to retirees is declining, so that Social Security and Medicare will be unsustainable. Raising income and payroll taxes ever higher on workers to finance entitlements will discourage work. Unfortunately, the party in power wants to expand entitlements and raise taxes, worsening the problem.
Reply to
Beliavsky
Sure, the rate of growth may slow some for some decades. Practically speaking, I am not sure this will have a profound effect on stock investors. First because the change will be very slow. Second because I think one needs to consider that economic growth is not driven just by population growth. Economic growth is significantly driven by humans' innate desire to improve the quality of their lives. We have more leisure time today on average than a century ago. We have more toys with which to indulge. I think it is impossible to go backwards or stagnate on either point. Third I think the possibilities for companies to market internationally continue to grow. Worldwide I do not think there is any kind of cessation of a baby boom per se. All serious stock investors should have an eye on the worldwide market. I would never bet solely on U.S. companies (if this is even possible on say the NYSE) with a well-diversified portfolio of U.S. based stocks.
Agreed with Larry re infrastructure. This is one area that has been neglected. Putting people to work repairing it could be a boon to the economy.
What I take from Yadda's point about more workers being required to support one retiree (via Social Security and Medicare) is that the tax system will have to change. Taxes are going up in the coming years, in my opinion. But on whom? Contrary to Beliavsky's blanket assertion, higher taxes will not necessarily discourage work en masse. Some large corporations are begging for socialized medicine--which will increase taxes--because health costs are near bankrupting them, after all. Plus I think there needs to be a nod towards countries that amazingly spend less per person on health care and have better health outcomes. We are doing some things wrong here in the U.S.
The U.S. is an evolving society. It may very well move towards a socialized democracy. But so far I do not see any countries, whom one might characterize as largely socialized insofar as government is concerned, imploding.
I expect the values of the U.S. population will change remarkably in the next 20 years. Personal responsibility will rise. The economy may not grow as fast, but maybe this is preferable to some of the bubbles we have had of late. Maybe a little less of a gap between blue collar worker and white collar worker is a good thing, lest, as I have written before, the blue collar workers come with guns, hammers and knives and tear down your gated community.
Reply to
Elle
What do you base this on? Certainly not what is going on in Washington or Sacramento today, or the past couple of decades. I see no change occurring, or on the horizon. Sadly.
Reply to
Wallace
How the Great Depression changed people and government. The NY Times has been observing some changes in values. Recently it had an article on young people being more careful with their money, for one.
Reply to
Elle
I have to believe that personal responsibility will rise. That is the foundation of productive activity of all kinds, which includes family, friends, work-groups, enterprises, republics, politics, charities, world concerns.
There are many people I know (knew) who did not run up huge medical bills in the last years of their lives. Instead, these people chose to simply die, sometimes suddenly, sometimes in the course of a few days, sometimes longer, but at home. Could it be that the current "health care" mania is just another variety of bubble, another form of mania that drives prices to unrealistic levels?
One great thing about the US is its unpredictability :-)
Reply to
dapperdobbs
This is the 2nd gen from the baby boomers, tho. My grown children, I'm afraid, have zero personal responsibility expecting everything to be handed to them. Which we did for them in large measure. My grandchildren see their parents struggling and hopefully will be more cautious. Each gen swings the other way.
Chip
Reply to
Chip
People were self reliant before and even during the depression. Then came the PERMANENT government programs, leading to less and less self reliance.
Reply to
Wallace
 Then came
I put far more blame for the present crisis on the private financial industry.
Reply to
Elle
Profound. It is clear to me money cannot buy wisdom like this. All sort of pun intended.
Yours is an excellent point re this health care bubble. The delusional attitude that "more is better" is surely behind all bubbles.
Reply to
Elle
That does not explain why you think people will henceforth become more responsible and self reliant.
Further, those of us that were responsible and self reliant did not avail ourselves of the crisis prone aspects of the private financial industry.
Reply to
Wallace
You asked me why I thought personal responsibility would rise. I said because of how the Great Depression changed people. You disagree it changed people so that they became more responsible. I do not think this is the consensus of historians.
I do not know what your point is. The crisis is affecting all, whether they were responsible or not.
Reply to
Elle
got any facts? that is news to me.
The point is people are less responsible than they used to be. The financial industry would not have made the mess they made had people been responsible.
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Reply to
Wallace

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