Trends for 2009: Generational Optimism (January 5, 2009)
The Millennials (those born between 1980 and 1990) view the future not with doom-and-gloom dread but with optimism. While this could be written off as delusion or "mere youthful optimism," the younger generations' optimism may well be an accurate assessment that the patterns, ethics and lifestyles of the older generations have run aground; as a result, the U.S. economy's deadwood (self-indulgence, moral dysfunction, solipsism/narcissism, debt-based bogus "prosperity," etc.) can finally be tossed out, along with absurdly impossible National debts and pension/Medicare obligations.
In a recent "conversation with Richard Metzger," we discussed the Millennial generation's optimism as per this research: Millennials Anxious Now, Optimistic About Future:
Despite a failing economy, employment woes and countless other concerns, a key segment of Millennials, people born between 1980 and 1990, remain confident about what 2009 will have in store for them. According to an omnibus survey conducted by StrategyOne on behalf of Pepsi, four out of five Millennials are hopeful about the future as the New Year approaches, and nearly all surveyed (95%) agree that it is important for them to maintain a positive outlook on life.How much of this youthful optimism is just, well, youthful optimism? Is the study too small to be judged accurate? Perhaps the sample is small, but the responses seem to reflect a real difference between generational views of the future.
We all have been inculcated with American culture's basic optimism; yet where is this optimism in the older generations' responses?
Perhaps these numbers reflect a true generational divide: the older generations which counted on tapping younger generations to pay for their retirement pensions and Medicare are no longer optimistic because they are finally absorbing the reality that their $66 trillion (or is it $90 trillion? Nobody knows above about $60 trillion) in unfunded liabilities are essentially uncollectable/unaffordable/ain't gonna happen.
Meanwhile, the younger generations are more optimistic because they sense that these unsustainable burdens will inevitably be lifted from their shoulders, freeing them to get on with the work of fixing all that's wrong with the U.S. economy, infrastructure and society.
Richard made these insightful comments on the study:
What I make of the optimism is that is it FAR better to be an optimist than a pessimist.Thank you, Richard, for directing our attention to this research and for your commentary.
I would summarize the situation thusly. The "generation that won World War II" is now roughly 82 years of age or older (any younger, and you couldn't have served in World War II). There is a largely unspoken "social contract" to continue to provide the care which these citizens were promised for the remaining decade or so of their time on Earth; they saved Democracy, and this care is right and just.
But the 76 million-strong baby Boomer generation has no such "social contract" for the simple reason it is demographically impossible for 130 million workers to pay the pensions and horrendously costly Medicare benefits for 75 million retirees.
Yes, I know millions of Boomers will be working past 66 years of age, and so on; that is all just statistical noise in the long view. Two workers cannot pay for one retirees' benefits when a week in the hospital costs $120,000. (My friend's father recently exited the hospital after a modest procedure and that was the bill paid by Medicare--the equivalent of three year's pay or decades of Medicare taxes blown for one week without major surgery.)
Then there's the undeniable fact that the Boomers were front and center in the past two decades' orgy of debt, lies, obfuscations, greed and bogus "prosperity." Not just the Wall Street crowd, but the "flippers" who leveraged multiple homes on shaky credit, etc. Yes, the younger generation tapped the same vein of greed and malice, as did a few enterprising oldsters; but the Baby Boomers flocked unskeptically to worship the gold-veneered gods of rampant debt-fueled consumption and unproductive speculation.
So what "social capital" was built up by the Boomer's experiments in narcissitic consumption and political/financial self-destruction? Not a whole lot, and I say that as a Boomer (I just turned 55). Exactly what have the past two Boomer presidents and their political cronies accomplished to win the accolades and gratitude of the generations which follow? Borrow trillions and squander it on unproductive wars, speculative excesses and benefits which should have been paid for responsibly out of net National income via taxes.
I can already predict that some readers will chastize me for this moral-tinged outrage at the squandering of the nation's wealth and the Boomers' role (either active or curiously passive) in that destruction of wealth, trust and credibility, but to claim that this level of self-indulgence, destruction and willful myopia was "always the norm" is simply not true.
Two decades ago there was widespread outrage that Chrysler was extended $1.7 billion in Federal loan guarantees; now an $850 billion bailout of the most corrupt and venal elements of our economy drew muted cries, and a $14 billion bailout of the auto industry now seems picayune and modest in scale.
This is the Boomers in charge, and there is very, very little to be proud of in my view. It has been a parade of shame for well over a decade: a shamelessly neurotic and remarkably ineffectual trash-TV drama (the Clintons) was replaced by a simplistic charade of "strength" which masked raw stupidity, ignorance, greed and a willful looting of America's environmental, global and financial assets for private gain.
Guess how well the "privatization of Social Security" would have worked out. That was the ultimate ideological end-game of this administration and its minions on Wall Street--the privatization of immense profits and the socialization of risk.
I have long suggested the Baby Boomers should prepare to gracefully accept that the benefits we promised ourselves are simply unaffordable. Boomers, Prepare to Fall on Your Swords (June 2005):
Now it falls to us to fix the finances of our foolishly bankrupted nation. Either we sacrifice our freebies (every recipient of these programs has extracted far more than they paid in, even including accrued interest) or we leave our children and their children burdened by an impossible debt. I say we go out with idealistic panache, and fall on our swords with grace and dignity.For more on the demographic impossibility of the Boomers receiving the benefits of their parents' generation, please read A Generational War We All Lose (March 19, 2008).
The loss of these retirement benefits is rather naturally a source of pessimism
for Boomers, but perhaps the nation needs to start looking at its future through the
lens of the challenges ahead rather than the broken lens of what was irresponsibly
promised in the past.
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