Baby "drought" baby boomers and the elephant in the cobra

[customerserviceguy]

11. Yes, it will subside

It's getting through that 20 to 40 year period that is the tough thing. As you properly point out, the parents and the grandparents of the baby boomers were willing to invest in schools for these children in the 1950's through the early 1970's. Will the grandchildren of the boomers be willing to bear the burdens of the tax increases that will be necessary to fund the baby boomer Social Security checks? I'm not holding my breath waiting to see how charitable they're going to be.

I've been noticing that for just about every year since the start of the Great Recession, the Social Security Administration trustees have moved back the day of reckoning for Social Security by three years. The most recent estimate (from 2012) is that by 2033, the trust funds will be depleted, and that's projecting today's low inflation rates. Chained CPI or not, inflation in the levels seen in the 1960's and most of the 1970's will certainly accellerate that pace of depletion. Continued slow job growth, or the replacement of decent paying jobs with crappy McJobs will also keep the slide going.

If that every year forward, we slide back three years trend continues, 2017 or 2018 is where the day of reckoning comes. I hope that doesn't happen, but if you reflect on the fact that the peak of the baby boom was 1957, and they all hit 67 in 2024, then it's very hard to be optimistic. The majority of the boomers born between 1946 and 1956 who hit retirement age will still be alive, too. And the tsunami waves crashing against the shores of Social Security will not wane until the last of the boomers born in 1964 turn 67 in 2031. Yes, it will all pass, but what damage will we see along the way?