The Wall Street Journal recently ran an article on economic problems facing retiring baby boomers. First, many boomers didn’t save up a lot of money, and a big chunk of what they did save evaporated in the Great Crash, or was consumed by the suddenly unemployed and unemployable to stay afloat.
The second problem is that even the 40% or so of baby boomers who did save will find that interest rates are so low that their income will be much lower than expected. Standard advice for older people with money is to move into savings accounts, bonds and annuities to provide steady income during retirement. People who followed that strategy in the last 10 years of very low interest rates are really in trouble. One strategy for dealing with damage to retirements is to work longer, but that isn’t realistic for many of those nearing retirement in this miserable economy.
The result is less spending by older people.
As of 2008, the latest data available, people aged 65 to 74 were spending 12.3% less than they did ten years earlier, in inflation-adjusted terms. They cut spending on cars and trucks by 46%, household furnishings by 35% and dining out by 27%. At the same time, they spent 75% more on health care and 131% more on health insurance.
People of all ages now realize that they have to save more if they want to have a decent retirement. That leads to lower demand for consumer products, which makes pulling out the Great Recession even harder. Projections for consumer demand show a drop of about 1/3 over the previous 10 year average.
The article is even-handed. It even points out that interest rates are low to benefit banks, home buyers, and bond issuers, a point usually omitted in the business press when it attacks baby boomers for their profligacy.
So, I open the comments section, expecting a few comments, mostly saying how this affects them. Instead, the air around my computer lights up with anger, hostility, and inter-generational warfare, all suffused with weird explanations of the source of the problems we face.
I read all 328 comments. My overall impression is confusion. Almost all of the commenters are right-wingers, and their explanations of the current economic situation are a mish-mash of right-wing ideology and cherry-picked facts.
WSJ readers aren’t stupid. I doubt that they are poor, either. They don’t seem to realize that they are at risk of losing their own savings if something isn’t done to protect us all from the predatory capitalists. None of them seems to realize that the Great Crash of 2008 was the logical outcome of the policies they support: laissez-faire capitalism, massive deregulation, and regulators unwilling to enforce whatever is left of the law. Most of them use their real names, so they don’t seem worried about being called out for their nasty comments.
Topic for the day: why are these people so hostile, so angry, and so vitriolic?
Here are examples:
I was born years before the “baby boomers” and I can appreciate what they have in store for them. 80 percent of my life’s savings for retirement was stolen by the actions of Chris Dodd and Barney Frank…Obama’s “New World Order” will only make it worse for my children and my grand children. Good luck, guys.
Dodd took 80% of this person’s retirement?
Boomers are cutting back because we have to bail out the Government Motors and we also have to bankroll the gold-plated pension plans, salaries and benefits of the municipal unions, the teachers, and all the rest of the public sector parasites. Government has to get small, public sector has to suffer pain and unemployment. We are fighting two wars on money borrowed from China, people! It is revolting how the government is growing ever more bloated!
Why do boomers have to pay for General Motors?
This is not your parents, and grandparents’, America any more. This is the Western Republic of Zimbabwe and reparations are underway. Go ahead and build that big nest egg, that 401K or whatever you have. Obama’s going to get it.. Rangle’s going to get it and so is Maxine Waters. Besides, pretty soon this Mother’s coming down and money will be useless anyway. We’ll be on the barter system, walking around with assault weapons on our shoulders just to survive while we go stand in line for government cheese.
Someone should remind this person that Mad Max was a movie.
Yeah, you boomers sure did rack up a huge bill for the next generation to pay off. I hope you enjoyed your McMansion’s, SUVs and tax cuts, put on the US government credit card. You will go down in history as the greediest and most irresponsible ever in the history of mankind.
Does this mean taxes should have been higher so Baby Boomers couldn’t have bought houses and cars?
Ration health care and shave a year or two off of the life expectancies of the current and future retirees — and Social Security shortfall resolves itself.
More death panel nonsense.
The BIGGEST threat to the economy is an extremely inexperienced, naive, communism-inspired man who answered the Muslim call to prayer 5 times a day for 6 YEARS in his youth. Unfortunately, he occupies the position of President of the United States, at the moment……………
The economy is in danger from Obama? How?
The fact that the looters have to raid food stamps in order to pay off the government unions is indeed very Atlas Shrugged. Now that they have bled the capitalists sufficiently to force the economy into a terminal downward spiral they are starting to turn on each other. The best response of the honest people is to strike – to cut back, don’t build businesses, hire nobody, conserve your capital, and let these parasite Democrats demonstrate their evil destructiveness to all who care to look – as they have in Venezuela, Zimbabwae, the USSR, the eastern bloc.
From the Ayn Rand wing of the crazy party.
Social security would be much more profitable if it was privatized, like health care used to be before this administration started messing with it.
Is this person saying that health insurance companies were privatized by the health bill?
Perhaps if more of the Boomer’s money wasn’t tied up in the government’s failed Social Security program their equity asset values would be more robust and self-supporting. The stock market is functionally an auction market with buyers and sellers normally establishing a current price for any given asset. With a large percetage of gross income going to Washington and state houses instead of into private investment, perhaps this is why US markets are now growth-challenged. Investors will only buy liquid investment assets if they have the cash to do so.
Well, they aren’t all articulate.