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  1. #1
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    Default It Can Happen Here: Europe’s Screwed Generation and America’s

    From the Daily Beast:


    It Can Happen Here: Europe’s Screwed Generation and America’s

    As the boomers have held on to generous jobs and benefits, their children have given up on raising families, writes demographer Joel Kotkin.

    In Madrid you see them on the streets, jobless, aimless, often bearing college degrees but working as cabbies, baristas, street performers, or—more often—not at all. In Spain as in Greece, nearly half of the adults under 25 don’t work.

    Call them the screwed generation, the victims of expansive welfare states and the massive structural debt charged by their parents. In virtually every developed country, and increasingly in developing ones, they include not only the usual victims, the undereducated and recent immigrants, but also the college-educated.

    Nowhere is this clearer than in the European Union’s Club Med of Spain, Greece, Portugal, and Italy, the focal point of the emerging new economic crisis. There’s a growing sense of hopelessness in these places, where debt is turning politics into an ugly choice between austerity, which reduces present opportunities, or renewed emphasis on public spending, which all but guarantees major problems in the bond market, and spending promises that can’t be kept.

    “We don’t know what to do now,” Jaime, a Madrid waiter in his late 20s told me last week. “My wife lost her auditor’s job, and I can’t support the whole family. Maybe we have to move somewhere like Dubai or maybe Miami.”

    Many young Greeks, Italians, Portuguese, and Spaniards already have made their moves, with a half million leaving Spain alone last year. But it’s not just Club Med youths who are contemplating greener pastures. Ireland, which in recent decades actually attracted new migrants, is exporting a thousand people a week. In recession-wracked Britain, nearly half of the population say they would like to move elsewhere.


    Driving this exodus is a growing perception that this collapse is not cyclical but secular. Increasingly, young Europeans are deciding not to start families—the key to future growth—in reaction to the recession. The stories about divorced Spanish or Italian young fathers sleeping on the streets or in their cars are not exactly a strong advertising for parenthood.

    Even in once-rigidly Catholic Spain, marriage and fertility rates have been falling for decades, and family structure weakening. Spaniards are having fewer children now than they did during the brutal civil war of the late 1930s. Alejandro Macarrón Larumbe, a Madrid-based management consultant, in his 2011 book, El Suicidio Demográfico de España, points out that the actual number of Spanish newborns has declined to an 18th-century level.

    This demographic implosion makes sense given the legacy left behind by the boomers, who have held on to generous jobs and benefits but left little opportunity for their children, not to mention a high tax burden on what opportunities they do find. For a generation academics have sold higher education—the more the better—as the cure for unemployment and the great guarantor of success. Yet rising education rates in places like Spain have not created jobs for the rising generation, but only expanded unemployment and falling wages among the ranks of the educated.

    Even America, traditionally a beneficiary of European woes, seems to have turned on its young. College debt is crushing many young people with degrees—particularly those outside the sciences and engineering—that are not easily marketable. The spiking number of people in their 30s working as unpaid interns reflects this erosion of opportunity. This has happened even as the price tag for college has shot up; 94 percent of students who earn a bachelor’s degree now owe money for their educations, compared to 45 percent two decades ago. Here’s a tribute to futility: today a majority of unemployed Americans age 25 and older attended college, something never before seen.

    Governmental priorities here continue to favor boomers and seniors over the young. For a generation, transfer payments have favored the elderly, a trend likely to accelerate as the boomers continue retiring and demand their due. According to Brookings, America spends 2.4 times as much on the elderly as on children.

    Forced to take lower wages if they can find work at all and facing still-expensive housing in those markets where many of the jobs are, roughly one in five American adults 25 to 34 now live with their parents—almost double the percentage from 30 years ago. Increasingly both Wall Street and green “progressives” urge young people to abandon homeownership for a poorer, more crowded life in expensive, high-density apartment blocks.

    Across the developed world, wages are being cut for young Americans, Europeans, and Japanese as politicians prefer to offer less to the young than to take anything away from those already ensconced in employment, particularly if organized into unions. In the U.S., everything from government jobs to employment in auto factories and even supermarkets is now on a two-tier track, with older workers’ guaranteed pensions and higher salaries not shared by newer hires.

    Pensions represent a bigger generational issue than salaries do. The European welfare state makes America’s seem Scrooge-ish. Their lifetime guarantees are so extensive, and unsustainable, that even the über-frugal Germans are calling for a special tax on younger workers to fund their parents’ pensions.

    This generational transfer will likely be accelerated by an aging electorate. In Spain, notes Larumbe, voters over 60 now make up more than 30 percent of the electorate, up from 22 percent in 1977; in 2050 they will constitute close to a majority. The same patterns can be seen in other European countries and, although less dramatically, in the U.S. as well.

    As a result, boomer- and senior-dominated parties, both right and left, generally end up screwing young people. This occurs even as they proclaim their fulsome concern for “future generations.”

    Politicians on the right, in Europe and elsewhere, scapegoat immigrants in part to hold on to their share of older votes. Left-wing analysts rightly point out that the boomer- and senior-dominated Tea Party here is not likely to cut their own entitlements, preferring instead to push cutbacks in education and other disbursements that aid the young while fighting spending on job creation and productive forms of infrastructure investment.

    Politicians on the left, meanwhile, tend to favor redistribution and “sustainability” over the new wealth creation critical for youthful advancement. Many boomers seem to suspect economic growth itself, as when John Holdren, now President Obama’s senior science adviser, back in the 1970s called for the “de-development” of high-income countries. A cynic might conclude that since the progressive boomers already got theirs, it’s fine for the young to live in an era of limits.

    With the kind of tax and regulatory regime advocated by today’s regressive progressives—already largely adopted in my home state of California—greens and their allies many not have to worry about too much new growth. Only those connected with the government, or able to ride asset inflation, will do well in the new “progressive” order.

    In Europe, east Asia, and America alike, the left and the right have both proven unprepared or unwilling to address the fundamental growth crisis facing the next generation. Neither austerity nor a “progressive” focus on greater government spending and “sustainability” can create the jobs and new opportunities so sorely lacking on the streets of Athens and Madrid and increasingly in American cities as well.

    The developed world’s youth shouldn’t expect much help from an older generation that has preserved its generous arrangements at the cost of increasingly stark prospects for its own progeny. Instead the emerging generation needs to push its own new agenda for economic growth and expanded opportunity.

  2. #2
    Senior Member Tiltyred's Avatar
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    What are the Boomers supposed to do, lay down and die? I wish they wouldn't make this out to be a problem between generations, as in, the old folks are hogging it all so we can't have any. It's more like there are fewer jobs because of technology. Young people and old people aren't competing for the same jobs anyway. Am I wrong?

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    Senior Member Munchies's Avatar
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    2nd post wooooooooooooooooooooooooooooooooooooooooooooooooo ooooooooooooooo
    1+1=3 OMFG

  4. #4
    pathwise dependent FDG's Avatar
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    Quote Originally Posted by Tiltyred View Post
    What are the Boomers supposed to do, lay down and die? I wish they wouldn't make this out to be a problem between generations, as in, the old folks are hogging it all so we can't have any. It's more like there are fewer jobs because of technology. Young people and old people aren't competing for the same jobs anyway. Am I wrong?
    Yeah, you're wrong - don't take it badly I mean, I think there is an element of competition. A typical example: suppose a strongly protected labor market, and suppose that the economy keeps on expanding up to year X, while stagnating from year X upwards. Up to year X, workers coming into working-age will be hired. Then, suppose that a recession hits at year X+1 and pension benefits are contemporarily cut, so that workers will now must retire on average 10 years later. What logically follows is rising unemployment for whoever comes into working-age from year X+1 onwards.

    Which is exactly what's happening in Europe. Baby-boomer's aren't necessarily to blame - it's a generally deflationary monetary policy coupled with high social benefits, which leads to an artificial "appreciation" of those benefits, while contemporarily impeding the creation of new jobs.
    ENTj 7-3-8 sx/sp

  5. #5
    Senior Member durentu's Avatar
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    Interesting read, but I doubt anyone knows the root cause of these problems.

    The root cause of the problem also provides the solution.
    "People often say that this or that person has not yet found himself. But the self is not something one finds; it is something one creates." - Thomas Szasz

  6. #6
    reborn PeaceBaby's Avatar
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    Well, that's an interesting spin ...

    It's true this isn't the same world that my husband and I grew up in. We are 45 years old. Both of our sets of parents could live a nice life on one income and still have some of the "luxuries" - my husband's parents had a cottage with a boat and the trappings, my parents bought a second property on which to build their "dream home" - 10 years later a reality. Neither of our families are rich, but no one lived uncomfortable lives - there was always enough. For us, that's what seemed "normal" to be able to do once you "grew up" and worked hard for it - those kinds of extras would become a reality.

    So, present tense - both my husband and I work and we contribute a lot to get our kids launched into their own lives. Our son still lives at home at the age of 23, working nearly full-time hours in the service industry. Our daughter is 21 and attending uni but we pay the rent and pick up the tab to get her off to a start with no debt. We do not have a cottage. We do not have a boat. We aren't building any dream house, but renovating the fix-me-upper special we currently own. Our "reality" is not for a lack of working hard, but is IMO due to the contextual economic reality we all live in at the moment. Our generational reality is not the same as our parents. To have the same lives we grew up with, you need more money. Add to that lots of parents with kids our age are doing things for our kids that our parents wouldn't have dreamed doing for us. When my husband and I got married, our parents gave us a hug and said, "Good luck, be happy, you're on your own".

    There's a sense of entitlement to much of the material trappings that no doubt has been perpetuated by growing up with these things as just the "normal" things people have. Much like my husband and I look at our parent's lives and thinking, "We can't afford a cottage, we don't have a boat, we don't have a dream home, what did we do wrong?", our kids moan about having older model cellphones, and driving crappy cars. They can't even imagine being able to have what we have, never mind what their grandparents have, but they feel like this is what they should have because it's what seems "normal".

    But is it fair to blame the "boomer" generation for this? To me, the boomers just got born at a lucky time. What does irks me is the boomer's inability to see how they have what they have because of this happenstance of good fortune. They didn't work any harder than I do to have what they have. Actually, I work harder in many ways no doubt, and definitely because we both work to afford our lifestyle the effort out is at least x2. Boomers can tend to cling to their wealth and pensions as their "entitlement" - what they are owed. And being owed that is hard to argue because most fought for better wages and good pensions so that's their deal and to change it now is a form of reneging on promises made long ago. The last three contracts I have worked, even though they were full-time (one for three years), I was always a "temp" worker with no benefits. I guess I could start looking at the boomers to blame as they do make an easy target.

    We made generations of young people that we told to "follow their dream" and "go to college, that's the ticket" ... it's just not necessarily a formula that's going to work for them as it did for that boomer generation. It hasn't really even worked for us, genX. But we sold it to our kids too. There was no malice or intent to mislead, it's just not working anymore ...

    Tough to know what's the best advice these days. Very, very complicated and more detailed than my post, but I need to get to work and stop forum-ing atm.

    Here's a great piece I watched recently:

    [YOUTUBE="http://www.youtube.com/watch?v=tAg7guX4OEs"]Intro to Generation Boomerang[/YOUTUBE]

    If you are in Canada, you can watch the whole show online:

    http://www.cbc.ca/doczone/episode/ge...boomerang.html
    "Remember always that you not only have the right to be an individual, you have an obligation to be one."
    Eleanor Roosevelt


    "When people see some things as beautiful,
    other things become ugly.
    When people see some things as good,
    other things become bad."
    Lao Tzu, Tao Te Ching

  7. #7
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Tiltyred View Post
    What are the Boomers supposed to do, lay down and die? I wish they wouldn't make this out to be a problem between generations, as in, the old folks are hogging it all so we can't have any. It's more like there are fewer jobs because of technology. Young people and old people aren't competing for the same jobs anyway. Am I wrong?
    Laying down and dying would be awesome, perfect in fact. There are simply too many of them. They're not only taking jobs from their children and grandchildren, their Social Security and Medicare benefits will be paid for by their descendants despite the fact that their descendants will make significantly less money because the Boomers are holding back their careers.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  8. #8
    Senior Member durentu's Avatar
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    america up to 1960s.. husband works, wife is at home raising a dozen children

    1971 - america goes off gold standard, global fiat currency

    1970s, wife enters workforce
    1990s, savings goes to zero
    2000s, borrowing occurs
    2010s, hyper inflation, bread goes to $10/loaf
    2012+ euozone collapse PIIGS
    2014, eurozone collapse reaches US
    2015,
    a) US experiences Super Depression,
    b) bank holiday called
    c) mass rioting, return of labor unions as political power
    d) neo communist rallies
    e) bread goes to $10 trillion/loaf
    2016, Americans beg for relief, first american dictator gains political ground
    2017, Bernanke, in a last ditch effort will restore gold standard

    2018 - we all might not be around anymore.



    just my dark side prediction ...


    tuck in your nuts !! it's about to get real.
    "People often say that this or that person has not yet found himself. But the self is not something one finds; it is something one creates." - Thomas Szasz

  9. #9
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    Quote Originally Posted by durentu View Post
    america up to 1960s.. husband works, wife is at home raising a dozen children

    1971 - america goes off gold standard, global fiat currency

    1970s, wife enters workforce
    1990s, savings goes to zero
    2000s, borrowing occurs
    2010s, hyper inflation, bread goes to $10/loaf
    2012+ euozone collapse PIIGS
    2014, eurozone collapse reaches US
    2015,
    a) US experiences Super Depression,
    b) bank holiday called
    c) mass rioting, return of labor unions as political power
    d) neo communist rallies
    e) bread goes to $10 trillion/loaf
    2016, Americans beg for relief, first american dictator gains political ground
    2017, Bernanke, in a last ditch effort will restore gold standard

    2018 - we all might not be around anymore.



    just my dark side prediction ...


    tuck in your nuts !! it's about to get real.
    Oh joy... Now I can add another potential way the world could collapse to the many other ideas already floating around in my head...
    ...

  10. #10
    Senior Member durentu's Avatar
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    Quote Originally Posted by Tyrinth View Post
    Oh joy... Now I can add another potential way the world could collapse to the many other ideas already floating around in my head...
    welcome !
    "People often say that this or that person has not yet found himself. But the self is not something one finds; it is something one creates." - Thomas Szasz

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