Thursday, February 23, 2012

Baby Boomers - The Most Selfish Generation


The Greatest Generation” is a term coined by journalist Tom Brokaw to describe the men and women who served or supported the United States during World War II. Their willingness to personally sacrifice for the greater societal good was highlighted in Brokaw’s 1998 book of that same name.

Unfortunately, the baby boom generation – my generation – may not be remembered so fondly. An appropriate description for those of us born between 1946 and 1964 might be “The Most Selfish Generation.” I say this because of the wreckless fiscal irresponsibility we have demonstrated over the past 31 years.

Take a look at the red graph below.


At the end of 1980, the U.S. public debt was less than 1 trillion dollars. That means from the creation of this nation through 1980, the entire net accumulated amount of money borrowed by the U.S. federal government was less that 1 trillion dollars.

In 1981, about the time that baby boomers became leaders in both the public and private sectors, public policies were implemented that have led to a current public debt that exceeds 15 trillion dollars. So in the past 31 years, while baby boomers have been running things, the U.S. public debt has increased by more than 14 trillion dollars. In other words, over the past three decades, the United States has consumed 14 trillion dollars of government services we have not paid for and that we will pass to future generations.

For those of you who were born after 1964, I have two words for you …. You’re welcome. …. 15 trillion dollars of debt (and still counting) … that’s our gift to future generations.

To be fair, money borrowed today does not have the same purchasing power as the dollars of the past. So let’s take a look at the purple illustration below.

When the public debt is adjusted for inflation, the diagram illustrates my case even better. In the first 200 years of U.S. history, the federal government paid its bills (for the most part). In some years we ran modest deficits (you can see the big bump to pay for World War II), but we usually paid our bills. This changed in 1981 when taxes were cut under the leadership of President Ronald Reagan, but there was NOT a corresponding decrease in government services. The ultimate irony is that in his 1981 inaugural address, President Reagan warned of the dangers of public debt, saying:

For decades, we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.

Yet, Reagan helped create a culture of hypocrisy in which we complain about public debt, but seem to continually demand further tax cuts while steadfastly refusing to sacrifice any of the government benefits we expect.

The military conflicts of the past decade in Iraq and Afghanistan are the first time in U.S. history that we have cut taxes in a time of war. When men and women of mostly younger generations are sacrificing their lives for our country, we – the baby boomers – refuse even to pay the financial costs of supporting them – choosing instead to pass the costs to our children, grandchildren, and future generations. And let’s not forget that while reducing federal government revenues through the Bush tax cuts of 2001 and 2003, we also greatly expanded the size and scope of the U.S. federal government through the implementation of Medicare Part D which subsidizes the costs of prescription medications.


The diagram above illustrates the U.S. public debt as a percentage of gross domestic product. It shows our debt in relation to our income. Richer countries and richer people can afford more debt than poorer ones. But even by this measure, the wrecklessness of baby boomer public policies is evident.

You may notice in this graph, as in the previous two illustrations, that there is a decrease in the U.S. public debt in the late 1990s. It is natural and normal for there to be ups and downs in economic activity over time. Economists call this the business cycle. And the surpluses of the late 1990s correspond to being in a properous part of the business cycle. But these budget surpluses were primarily the result of the short-term willingness of Congress to impose on itself pay-as-you-go (PAYGO) rules that require any new spending to be funded by increased revenues or offset by reductions in other expenditures. But as yet another example of baby-boomer selfishness, these rules were abandoned in 2001 (fiscal year 2002) to allow for the popular tax cuts and the subsequent increases in government expenditures.

A June 10, 2009 New York Times article, "America's Sea of Red Ink was Years in the Making," and an accompanying diagram explain and illustrate how U.S. budget surpluses became deficits. The major components and their relative magnitudes are illustrated by the downward arrows. The contributing factors were:

(1) The early 2000s recession caused reduced tax revenues and increased government assistance (- $291 billion a year)

(2) The Bush policies (tax cuts, Iraq war, Medicare prescription drugs) (- $673 billion)

(3) The late 2000s recession (Dec. 2007-2009) also reduced tax revenues and increased government assistance (- $479 billion)

(4) Wall Street Bailouts (begun under Bush & continued under Obama) (-$185 billion)

(5) Other programs supported by both the Bush & Obama administrations, such as the Iraq war and a patch for the alternative minimum tax (- $232 billion)

(6) Stimulus spending (- $145 billion), and

(7) Other Obama programs (- $56 billion).


A July 2011 diagram (above) from The New York Times series, "Charting the American Debt Crisis," shows (on the right) how much of the $14.3 trillion debt (at the time) was accumulated under each U.S. President and (on the left) who holds the debt.

This should NOT be a partisan issue. At a fiscal forum at Jacksonville University on January 26, 2012, former Republican Senator Mel Martinez joined JU alumnus David Walker, the former Comptroller General of the United States and the founder and CEO of the Comeback America Initiative; and Robert Bixby, the executive director of the Concord Coalition; to convey a similar message: federal revenues [as a percentage of gross domestic product (GDP)] are the lowest they have been and expenditures (as a percentage of GDP) are the highest since 1950. (See the diagram below.) Collectively, U.S. citizens need to pay more in taxes and receive fewer government benefits. But that is NOT a message that we want to hear.

And it is worth noting that most of those who are raising the alarm about this debt issue, are not proposing solutions that involve sacrifice by baby boomers. Indeed the refrain is that those of us at or near retirement will not receive any reduced benefits from Social Security or Medicare. The proposed reforms will reduce benefits for younger people.

Once again, I say to people born after 1964 … You’re welcome!

There is one notable exception among the voices for fiscal reform who offers a chance at redemption for baby boomers, if you want to call it that.

David Stockman, President Ronald Reagan’s budget director, advocates a one-time surcharge on the wealthy. He explains the idea in an interview he did for 60 Minutes in October 2010. Click the link above to find the interview or simply search for “David Stockman 60 Minutes.”

38 comments:

  1. This is an interesting write up. Lots of people getting the juice without the squeeze.

    Well done Dr. Buck.

    ReplyDelete
  2. I really wish people would pay more attention to the facts and less to the rhetoric. I feel like I am weighed down by policy after policy voted for and enacted by Boomers. I make a good living, but a weighed down by student loan debt after the Boomers devistated funding for higher education after they no longer needed it for themselves. I pay more and more in health care premiums because my boomer coworkers are getting older and sicker...the opposite was true for them when they were my age - younger working population due to the bulge from the boomers. My spouse and I both have to work because without that, we will never be able to retire as pensions are a thing of the past...which necessitates $25K in child care expenses every year. Our home cost us more than it should have due to boomer speculation in the housing market. I am already drowning in their mess and have only more to look forward to as I am certain they will vote to keep their Social Security and Medicare entact and cut the heck out of the benefits of anyone under 50. Yes...I know you all worked for those benefits, but so am I. I am sick to death of seeing retired 50 or 60 somethings who have been on the take all of their lives taking ever more. I hate to feel this angry, and I know there are lots of honest hard working boomers, but just imagine...REALLY imagine how it would feel to be 30 years younger. Think about you would feel about your future or your kids future. I am all for shared sacrifice, but that's not what the boomers want...they want everyone else to sacrifice so that they don't have to.

    ReplyDelete
  3. I have selfish baby boomer parents an in-laws. Yay for me.

    ReplyDelete
  4. After I marry and start a family, I have no idea WTF we're going to do with my mother.
    She has always viewed her only two kids like nothing but a burdan and blames us for her problems, when we never in our lives made her decisions for her in any way, shape, or form to any degree.
    Every last thing wrong in her life, and in ours, was from her choices, choices we had no influence on. And, she blames us.
    Frankly, baby boomers hate themselves, their kids, and other kids. It is written all over them. They despise humanity and want it to die with them.
    Well, my generation's not going to allow it. After the baby boomers are gone, we're going to be starting a mass project of fixing society and the environment, and while it will take numerous generations because how deeply you guys have fucked everything up, we will not fail. Even while we live with the complex that our baby boomer parents want us to fail!

    Frankly, my mom's eventually going to be handicapped and out of work for her suicidal diet, a diet she LOVES forcing onto kids to try to kill us, and she will not be able to live with the family I start, because she is not going to follow the rules MY family will have about no candy, no junk, no sweets, and no meat. Her contact with her grandkids will be VERY limited, because she gave my cousin's daughter jolly ranchers behind her mom's back, almost killing her via choking! And, she gives other cousins' kids doughnuts for every other "meal!" This woman gave me Type 1 Diabetes, and she is out to give others Type 1 & 2 Diabetes, too. She wants the whole family to die out in the next decade, to take us all with her to the grave.
    So, she won't be living with us in her old, handicapped years.
    And, since she tried to kick me out unjustly at various points since I was a toddler, out into the street, I will not have my husband pay for her to be in an old folks' home either. If she is going to be this out to get everyone following her in age, she is not going to be taken care of by us. We don't owe her anything, her half-assed attempt to provide for us as out of mere obligation, not love, and filled with efforts to destroy us.

    Many baby boomers should expect similar fates. If you are trying to kill your kids and grandkids, best not expect them to care for you in old age. You are not entitled to younger generations supporting you in your old age. That is something you have to earn by making the right choices, and baby boomers clearly haven't, on average, made those hoices.

    ReplyDelete
  5. Baby boomers have been throwing a party for the apocalypse since they were born.

    ReplyDelete
  6. Their selfishness goes way beyond putting future generations in debt. We have the drug war which has give America the distinction of having more people in prison than any country on earth. We are 5% of the world's population and hold 25% of the prisoners. We are in short a police state.

    Consider how they have our young men and women invading so many countries. Consider the cost in human life on both sides as well as the debt which many generations will have to pay for.

    Now, they are trashing our rights which have been won by the those who came before them. The sad thing is with technology the way it is recovering these rights will be nearly impossible.

    And of course there is the Left vs Right game or show. People eat it up even those younger than the boomers. They somehow think hat the two parties that got us here have some understanding as to how to get us out of this mess. History will look back on these times and wonder what they were thinking.

    ReplyDelete
  7. Quite frankly over the next 15 years we must take control reducing social security benefits for seniors aka baby boomers. This generation that refused to pay their fair share for social security and has cut higher education and they don't deserve the benefits. We should shift those funds to education for our children and research and environmentally safe technology.

    ReplyDelete
    Replies
    1. Thanks to rotten ronnie reagan, baby boomers paid for their and their parents' social security. Most of the administations, through so-called representatives of the people, from Reagan on,
      have paid for wars and benefits for
      their rich donors by stealing from the program.
      To the delusional buy high sell low hotshots who "think" they could do
      better w/ the money, look at what
      happened in 2008. And privatisation lets Wall Street skim it off the top.
      These teabaggers/libertarians/repiglicans (all the same) imagine themselves as potential capains of industry/millionaires. If it wete not for automatic social security deductions, they would be waking up on the wrong side of the dumpster.
      Am I selfish that my mt state pension is about equal to my social security? A Clerk II and later Clerk Typist II in 1975 started at $2.50/hr., & in 1990, $9.00. I paid about 4 per cent, and it was matched by the state. So in lieu of pennies that the taxpayers at the time didn't want to pay, the $9.32 was a better deal for everyone. Most of my check is due to money growing through time. Most of us spend most of the money locally within the state. I'm one of the actual job creators, & don't need any public assistance. Social Security only, maybe I would.

      Delete
  8. I would agree with the notion that baby boomers are the most selfish generation.

    ReplyDelete
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  10. My baby boomer parents.

    They made all their money buying cheap Cali property in the 70's and 80's. Dad has a pension plan. Didn't need a pricey education in 1970 to get a solid middle class job.

    Both on Disability/Medicare by 55. While they are getting so much and living solid my self insured health plan gouges me to make up for their plan then flat out denies care.

    Due to medical costs I've liquidated retirement , refi'd the house. All I heard from them is "vote Republican !" As long as they get their share , huh ?

    ReplyDelete
  11. What is the most upsetting in all these, that though the baby boomers has increased the debt tremendously, only a limited category of people enjoyed the benefit, but to deal with the consequences and to pay off will our children, who are already pressed on money due to various student loans, medical loans, mortgages and often seek for a quick money advance to keep afloat in a rough time. What is further?

    ReplyDelete
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  16. Richer countries and richer people can afford more debt than poorer ones. only from direct lenders But even by this measure, the recklessness of baby boomer public policies is evident.
    Baby Boomers The Most Selfish Generation is not justified title.

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  18. Many baby boomers felt that I was questioning their motives or implying they were merely inconsiderate. Are they or rather we, a particularly selfish generation? Another complaint came from those baby boomers who had it difficult than many youngsters do today. It is obviously right that some baby-boomers fared less well than others, even if their generation as a whole has done well. Others can get sky cash from us.

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