I generally feel the same way, but try to remind myself that once you break the Boomer generation down a little bit, you realize that the people most responsible for this mess won’t be the ones starving in the streets. It’s the politicians and lobbyists and CEOs and right-wing grifters that spearheaded the movement, and they will be the ones left relatively untouched. The burden of the rest of the Boomers was always going to fall on our generation’s shoulders.
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The entire generation consumed, consumed and consumed some more, leaving their kids with the bill and lecturing us along the way. Education, housing and health care are 10x what they paid and they’re totally insulated. And they elected and continue to elect shit show politicians. Fuck boomers.
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I got in an argument with a Boomer on FB recently about student loan forgiveness. I asked them if they realized that their state college education was more heavily subsidized by the government than the current iteration and if since they were opposed to governments paying for it they planned on paying back the free socialist bucks they got as part of their education. It didn’t go over well.
Our generation undoubtedly has it worse even if we come from a place of privilege which I will fully admit as a white male who was raised in a upper-middle class family. And you are right it is due to the greed and depravity of the Boomer generation. Our country is bankrupt, the environment is already a complete disaster that is a lock to get worse, our generation is saddled with incredible amounts of student loan debt (My wife and I are in our mid/late 30s and have been making student loan payments for almost a decade that are mortgage sized and STILL owe almost 200k), our job prospects are worse, etc., etc., etc. The Boomer generation just passed the buck to us so I agree with you.
My post wasn’t to elicit sympathy for them, or for my parents for that matter. I legitimately wonder what the fuck we are going to do when we get to the point where the shit hits the fan. There is no chance we just let them starve. So once again we will be footing the bill for their lives on both ends. They borrowed from our quality of life for their working lives. Saved nothing. And undoubtedly we will be expected to care for them in their inevitable destitution that faces them in old age.
It’s fucking awful.
No. People get the leaders that represent their values. The Boomers allowed all of this to happen so at a macro level they are all responsible. Their needs need to be at the absolute bottom of the priority list the moment the gen z through gen x (including millenials obv) are the dominant voter group.
They claimed Obamacare had death panels. The new national healthcare system needs actual death panels. We spend an obscene amount of money on end of life care, long term care facilities, and other stuff for unproductive old people and all of that needs to be rationed down to <10% of the current spending levels.
We absolutely should not top up social security payouts after the devaluation. They can try to figure out how to make ends meet in a world with no repetitive activity jobs and <1k a month in today’s money. If not I’m ready to go full Scrooge and invite them to lessen the surplus population.
We’ll agree to disagree–I assume general human decency will prevail (not to mention the tension between everyone our age hating the generation but wanting to protect their own parents, with protecting parents winning out). I actually think a “what should we do about the boomers?” thread would be interesting.
I don’t think the Boomers comfort is more important than literally every future generation. We are going to be spending tens of trillions of dollars on fixing the climate change issue that they decided not to fund… and they’ve badly underfunded their own retirement. I’m sorry but we’re going to have hard choices to make and they are literally dead last on my priority list. Moving them up that list means continuing to neglect some fire that they most likely started, and they’ve already done more than enough of that.
Oh and as a country we’re carrying a massive amount of debt, most of which we ‘owe’ Boomers or we borrowed so that Boomers wouldn’t have to pay for stuff in the past. We already have this massive hole to dig out of without bailing them out. Expecting us to take them on our backs and dig our way out of their hole is a bridge too far. They can figure out how to get themselves out of the hole they dug on their own.
For the most part they already are, there’s a reason so many older people are putting off retirement and working into their 70s.
I really don’t disagree with any of that, I just don’t think the hard choice will play out like you want it to.
I hope you’re right. That would suggest that we still have plenty of resources though, and I don’t actually think that’s true. I actually think this country is on the edge of a cliff, and once we go off it there are going to be a LOT of hard choices to make.
My candidates for who is going to get absolutely wrecked are: the military, the health industry, and retirees (mostly through inertia) in no particular order… because we won’t have the resources to keep overpaying for security, healthcare, and outdated retirement programs while simultaneously managing a host of problems that are becoming more pressing by the day.
These people will get wrecked because the path of least resistance goes through their living rooms.
The main reason I expect this recession to be so horrible is that the Fed rates are lower than they should be, at the urging of Trump. That leaves less room to fight a recession. Same thing with our federal budget, we gave it all away on a huge tax cut that blew the deficit up and have virtually no room to maneuver for stimulus spending. So the government doesn’t really have any tools to get us out of this.
Meanwhile the middle and lower class aren’t exactly flush in six month emergency funds.
So how does it trickle down to the middle and lower class? Perhaps just by not being able to shorten it at all, and them not having the funds to survive it. People start losing jobs → they start missing mortgage payments → they’re out on the street/staying with family or friends → housing market tumbles → mortgages go under water → people walk from bad mortgages → housing market tumbles further.
Then it starts branching off in other directions.
I’m curious about what you said up thread, @boredsocial. You said people who save a lot of money are going to get hurt by this. I’m hoping that’s not the case, because I currently have a ton saved. Isn’t there going to be a pretty good opportunity to buy stocks/property when prices tumble? To move those savings into assets?
I’ve seen this assertion made by a few people, but I don’t really understand it - why are net profit margins unsustainably high? There’s no magical competitive force that dictates a compression in profit margins. The competitive force operates on return on capital, not profit margins. Suppose you’ve got 2 firms, Wal-Mart and Costco. Competitive forces will work against one of those firms earning a much higher return on capital than the other. But if consumer preferences change and people enjoy shopping at higher-margin Costco than lower-margin Wal-Mart (or their high/low margin analogs in other industries), you’d see aggregate increases in profit margins even in a perfectly competitive operating environment.
I also don’t know why this line of thinking is lolwtfstupid. Investing is all about opportunity costs and allocating your money to theh highest expected return, within the level of risk that you’re comfortable with. If bond yields plummet, that makes stocks more attractive. There’s nothing wrong with that argument at all. Of course that also means that your expected return on equities is going to be substantially lower than the historical average, but that seems fine as long as you’re earning a positive equity risk premium.
wat
So if this happens stocks get killed, corporate bonds get killed as their yields rise, folks probably pile into treasuries so their yields will go even lower. But then holding treasuries and cash will be dangerous because if you’re right and the currency gets devalued then there would be inflation and even if bonds return positive in nominal terms you’d get hosed. So I guess the smart play in this scenario is TIPS and gold? Anyway sounds like I’d better go buy a house with a fixed rate mortgage and as little down as the bank will let me, toodles.
Those profit margins were achieved by slashing capex to the bone for starters. This makes them very vulnerable to having to raise that spending to remain viable down the road. There’s also the very real risk of a changes in the tax regime, which the big players have all gamed the ever living shit out of.
They are also holding a lot of debt at very low rates, so a change in borrowing costs would hit bottom lines very hard.
And then there’s the threat of small operators coming in and forcing them to compete on price. As such a small operator I can confidently say that small well run firms can absolutely waffle crush big firms on price AND service in many areas already, and technology is expanding the number of areas this is true as we speak. We are living in a golden age for high level freelancers right now, and that trend really just started.
Health care isn’t getting fixed. Fucking Democrats are running around hurrr durrrrrr if you like your private insurance
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Things that aren’t really political viable right now will become very politically viable when it’s that or something way way less popular (to be fair I think a complete tear down of our healthcare system is politically doable right now if we get to 51 votes in the Senate and get rid of the filibuster). Hardship makes people really stop and examine where the money is going. Especially since the health insurance system is 100% broken right now and very very unpopular with basically everyone.
Yeah I’m planning to use as much money as necessary on keeping my business afloat and investing the balance in BRK and letting Warren Buffett’s rescue deals take me back to even. I keep considering buying some gold (again like 5%) but my deeply ingrained anti goldbug feelings are really hard to kick.
The Fed rate is 2.25%, I think it should have been at 4-5% the last couple of years.
The lower the interest rate, the cheaper borrowing is, which means that cheap money feeds the economy and helps us turn it around when we’re in a recession. The higher the interest rate, the less borrowing there is. So essentially the Fed is supposed to increase the interest rate when the economy is doing well, then cut it down to nearly zero when the economy is struggling. This in theory smooths out the economy so we don’t see huge highs or horrible lows.
But we have kept interest rates low for a long time, and Trump has been feverishly calling for returns to near zero to boost his economy even though it didn’t need it. Because the rates never got as high as they should have, we are going to hit a higher high and the crash is going to be more severe coming from that higher peak.
You’re talking about investing in BRK now, or once the crash happens?
It seems like striking once the recession starts is the way to go.
If what you’re saying will happen actually happens then gold prices will probably double or better. Sounds like everything else will get killed though. It’ll be stagflation 2.0