How the Baby Boomers screwed the rest of us

I can't help but feel a little resentment towards the Baby Boomer generation.

I'm certain it's not because of the massive national debt they've carelessly heaped into their children's lap, the complete lack of foresight in providing affordable post-secondary education for their own kids, or the devastated, messed-up post-divorce families they've riddled society with.

No, ultimately it comes down to one thing – fluoride in my water.

Of course I'm just being cynical. I mean, what could be wrong with Generation X, Y and Z paying for the sins of the father?

For those unaware, the generation born in the Post-War era (1946-1964) were both numerous and well, let's face it, entitled. They grew up in a era of unmatched peace, prosperity and opportunity and as such, were imbued with a hopeful expectation that all these good things were in fact their God-given birthright.

They grew up in the soft underbelly of the American and Canadian suburbs, passed through the chills of the Cold War, and experienced the moon landing, push-up bras and colour television. In the 1950's they became the Beatniks, only to transform into Hippies in the 1960's. Free love, cheap drugs and good times ensured a thorough education in what not to do, and then came the 70's.

Mom and Dad toned it down a little, got married (just cause) and popped out babies like a Palestinian refuge camp. Dad's money was never worth so much, and his house and car had never been so damn big.

Then, one day, it all started to go sideways. And it wasn't because of the 1980's fashion disasters or the campy synthesized pop beats. Divorces started to rip apart families. Jobs got scarce.

But then there was hope: United States and Canada signed a free trade agreement, the Cold War ended, and World order was restored when George Herbert Walker Bush bombed the living daylights out of the Iraqi Army in 1991.

Today, the indispensable generation of Baby Boomers “control over 80% of personal financial assets (wealth) and more than 50% of discretionary spending power. They are responsible for more than half of all consumer spending, buy 77% of all prescription drugs, 61% of OTC medication and 80% of all leisure travel.” And in case we needed to know this, they also own 80% of all top of the line cars.

But then, why shouldn't they? They worked hard for their cake, provided the majority of services and goods to the majority of consumers, and should be compensated as such.

Problem is, it wasn't enough. The peace dividend had left too much time for a husband to envy the shiny new Ford sitting in his neighbours driveway, and too much time for the wife to salivate over her neighbours new dishwasher (hey don't get me wrong-- dishwashers are the bomb.)

So they whipped out their all-new plastic credit cards, and in turn expected the government to do the same.

Sometime around my birth (1978), the Boomers let loose. Crazy loose. We're talking billions upon billions of “who gives a hoot, spend-it-or-burn-it-I-don't-care” kind of debt. To get some perspective, during the 1970s, debt held by the public declined from 28% GDP to 26% GDP. During the 1980s, it rose to 41% of GDP.

While not an economist, I can tell that the chart located below is probably not a very good omen of the harvest to come.

But then again, the Boomers probably won't be around long enough to experience the lovely debt defaulting and accompanying social service collapse yet to come. Seeing that their average age is over 56, they'll probably be dead – or worse, senile – when this economic storm hits full force.

But what of this debt?

According to Wikipedia:

The gross public debt... tripled in size from $260 billion in 1950 to around $909 billion in 1980.

Not so bad you say. Hold on, it gets better.

Gross debt in nominal dollars quadrupled during the Reagan and Bush presidencies from 1980 to 1992. The net public debt quintupled in nominal terms.

Then the whopper.

During the administration of President George W. Bush, the gross public debt increased from $5.7 trillion in January 2001 to $10.7 trillion by December 2008. Under President Barack Obama, the debt increased from $10.7 trillion to $14.2 trillion by February 2011.

From $5.7 Trillion to $14.2 Trillion in under ten years. Coincidentally, both Obama and Bush are Boomers (just saying).

In some ways I'm glad I grew up in a nice house. I'm glad I lived in a country with Universal health care (Canada). And I'm glad I only had to pay $30,000 of my own (non-existent) money to go to college. Why should my parents have to bear such an unnecessary cost, especially knowing that when I graduate there won't be a decent paying job on the other side?

That's not to say that some parents don't cough up the coin to enable their children to make a better future for themselves. And my folks did do their best. But I see a dangerous precedent being set across North America. Skyrocketing university tuition, for-profit corporatization of post-secondary education, unpayable student loans-- it all smacks of (to put it Hollywood) -- greed.

And while I'd like to think the Captains of Industry who organized this feeding frenzy aren't Boomers with college age kids themselves, my bet is they probably are.

So good for them. When my oldest goes to University in 2022, his tuition is expected to cost $91,300 – or halfway towards the cost of a new house.

According to a Wall Street Journal article:

There is an estimated $730 billion in outstanding federal and private student-loan debt, says Mark Kantrowitz of FinAid.org, a Web site that tracks financial-aid issues—and only 40% of that debt is actively being repaid. The rest is in default...

My guess is that by the time the Boomer generation gets settled into their comfy retirement homes or white-washed Florida condos, the whole thing will go to mush. The consequences of a top-heavy economic distribution model --with its reduced tax base combined with the needs of caring for this high-maintenance generation -- will surely create a crisis of tsunami-sized proportions.

And it is likely that the generations that have born (and will bear) the brunt of this Boomer phase-out will have to extend an uncommon measure of grace -- and accept an uncommon measure of austerity in return-- if life is to be pleasant for all.