My first article for The Atlantic, on what happens to America when the baby boomers retire, is up. For companion reading, there's a roundtable between me, Clive Crook, and Phillip Longman.
Copyright © 2009 by The Atlantic Monthly Group. All rights reserved.
Thanks a lot you narcissistic fools who decide to remain childless. You've succeeded in destroying the American dream.
“Inspiring your freedom years”: and the poor buggers are subjected to that sort of patronising drivel too.
Megan,
Congratulations on the first The Atlantic article. As usual, you provide a concise and balanced look at the economics of the demographic shifts coming. Hopefully, this is just the first of many.
So ... what should I do to keep my earnings from being sodomized by the taxes that will be necessary to pay for all this stuff?
Person,
Stay in Cash, or paper denominated in U$D, and you won't have to worry about it..
MEH: Keeping my earnings from producing income is one trick, yes, but the goal is to maximize after-tax return, not minimize taxes.
Person,
sorry if I wasn't clear, it was a(n attempted) joke..
MM,
nice use of 'transmogrified', few get that correct..though I do hope that your next art. covers Medicare/-aid Fraud, and/or the coming tax war between Gens X&Y and the Boomers..
Person, to answer your Q: Short muni bonds
First time I have seen the word "transmogrified" since Calvin and Hobbes.
Congratulations on the first article. Light on prescriptions for resolving problems, but it seemed a decent description of the situation. Well-written.
You seem to be arguing that the allegedly coming hit to productivity growth from a shift of resources into eldercare implies that the market as a whole is overvalued. Is that right? If so, is EMH really that far off?
I liked the article also. It's good to let people know about the problem that's coming. I have a few criticisms, though:
It's hard to reconcile this paragraph with Megan's stated belief in efficient markets, according to which all information in her article should already be reflected in current valuations.
Larry Kotlikoff has some good ideas about Medicare. He wants to scrap the current fee-for-service system and replace it with a voucher system that would enable the government to reduce the growth of expenditures. See Ch. 6 of The Coming Generational Storm for instance.
Conservatives and libertarians should not themselves to become "the tax collectors for the welfare state." They should hold the line on taxes and force the government to shrink (as a percentage of the economy). Again, Kotlikoff has suggested changes that would avoid tax increases and would instead shift taxation from income and saving to consumption.
rwe's on the right track, we either boot the 'Welfare State' as we've come to know it, or be better start importing some Brazilians to teach us how to deal with hyperinflationary economic stagnation..
My job was not to chronicle what ought to happen, but what is likely to . . .
Nice balance. Curious? Where did all those Buffalo millionaires make their money?
micheal,
http://history.buffalonet.org/1832-40.html
and assorted pages give an insight.
think Erie Canal & Trade, to begin with, then RR's..w/ all that transportation available, Manufacturing kicked in..
Jeff-
I've left the country to your children. There are reasons quite aside from narcissism or biological incapacity that I chose not to have children. You would be wise to consider that I might have a very good reason to do so. Direct your anger at those who chose to have only one or two.
Narcissistic Fool wrote: You would be wise to consider that I might have a very good reason to do so. Direct your anger at those who chose to have only one or two.
Actually, I think he was attempting make a playfully viscious satire of the article. Unfortunately, on the Internet, nobody can see you winking.
"...Goods and services, after all, compose an ever growing share of our economy—surely, with so little of our income to devote to food, we are all on the brink of starvation!
The fallacy is obvious, stated that way: we buy so many goods and services, not because we are starving, but because food is so abundant and easy to grow that we have loads of income to spend on other things.
Similarly, we are not spending more money on health care at the expense of other things we used to enjoy. These days we have more, and higher quality, goods in pretty much every category than we did thirty years ago. Nonetheless, the share of household income that we spend on almost every category has fallen—except for health care. As our income has risen, we have diverted much of the gain into the consumption of medical services. And why shouldn’t we? Is there something better to spend our money on? We are a society so fabulously wealthy that there are whole companies devoted to helping us throw away our excess stuff."-MM
please contrast, the above, with our current fiscal position of being ~U$D55 Trillion in the hole..
That 'Roundtable' was pretty interesting, Longman is, obviously, a sharp tack, until your last response of which, part is above..
$55 Trillion is the NPV of future obligations. The NPV of our future income on a $13 trillion economy growing at an average of 2% a year is much, much higher than that.
Don't get me wrong, the problems are real and need to be addressed. But they're not as scary as just stating raw numbers makes out. All government-sized numbers are scary; we're a huge, rich nation.
Megan I happy to see your first article for The Atlantic, I was beginning to think you were a character from a mid90s NBC sitcoms: a hip young urbanite who never seems to work but only get involved in wacky situations and adventures: eating humane meat at bunch, dinner with Dan Drezner then stalked by criminals, being lied to by hotel clerks on Long Island.
I am wondering if perhaps the country that The Atlantic should have sent you to but didn't wasn't Italy, but Japan. They are probably facing the worst demographic crisis and they are responding by trying to improve productivity in those areas where it hasn't increased. And they are going to attempt to do it with robots.
If they pull this off it will probably solve most of the economic questions/problems, but open up a whole slew of cultural and sociological issues we haven't even dreamed of.
I don't think you need to live in some sort of Kurzewilian fantasy to imagine 2020 with cars that drive themselves (eliminating many mobility issues) robots that provide basic personal care (eliminating a lot of unskilled home heath care) and realtime translations devices built into mp3 players, hearing aides, eyeglasses (making immigration less of a hot button topic that it would be),
I'll also look forward to the wails as people lose all those "good jobs" at Wal-Mart when robots start to do all the stocking.
Nice article, congrats. I hope it is only the first of many.
I have to agree with others though - it seems there is an apparent conflict between your "I have figured out that the market is overvalued because of this topic that I've researched" and your stated belief in EMH.
Not sure which is correct, but they appear to be incompatible.
Good article. One solution, which the US is able to handle better than any other modern country, is immigration. Mass immigration from one country (Mexico) may not be such a good idea, especially when many of those immigrants believe that Mexico has valid territorial claims on the US. But largescale immigration (ie enough to keep up the workforce) from a range of different countries including Mexico would go a long way to solve our demographic problems.
MM,
"The NPV of our future income on a $13 trillion economy growing at an average of 2% a year..."
that's a nice assumption, but it's hardly a given.
beyond the FedGov 'entitlement' sinkhole, similiar ones exists throughout the States, Localities, and many large Corpos..
as well, we have an Infrastructure deficit of many more Trillions over the next ~20 years..
this says little about our U$D800 Billion/yr. Trade Deficit..our "huge, rich nation" is rapidly devouring its seed corn. David Walker, GAO, is correct, simple 'program tweaks' aren't going solve this multi-variable monster..
http://www.gao.gov/special.pubs/longterm/wakeuptour.html
Why don't you interview him, I'm sure he'd appreciate the opportunity to add to his, unbelievably, scant Media coverage..
James B. brings up a topic that occurred to me as well while I was reading Megan's article- improving personal care productivity through the development and use of robots. This is coming eventually and almost certainly sooner than we can imagine. In addition, the advances in geriatric medicine will probably be far more startling than we know.
My take on the article is that it is a perfect argument for the development of SENS (www.sens.org).
Who would have thunk it?