Thursday, August 16, 2012

Something You Don't Often See Written: The Truth

Old folks enjoy generous retirements (though they may be feeling a squeeze, no one is throwing anyone into the street). Bailout bonds and deficits will be paid off by the young. Hardly seems fair. Commentary: Why the Euro Crisis Is Also a Generational Conflict - SPIEGEL ONLINE.

Bankers and politicians aren't the only ones responsible for the crisis, either. Many from the older generations were accomplices in the faltering system. Almost every family in Greece had a member who profited from the bloated state apparatus as a civil servant. Baby boomers in Spain took on mortgages en masse, pushing their country into the debt crisis. And in Italy, politicians like Silvio Berlusconi were re-elected repeatedly because their tricks were apparently met with great sympathy -- pensioners have been among the former prime minister's most important constituencies.

People say they love their children and grand children. Then why are those same descendants left holding a trillion dollar or euro debt?

Now I am not much for worrying about "income inequality," or the like, but the statistics are always interesting.

This gap is growing outside the euro zone, too. In the United States, household assets for those over 65 have increased by some 42 percent since 1984, according to the Pew Research Center. But those younger than 35 own 68 percent less than their peers did during the mid-1980s.

Even if you account for inflation, which this study doesn't seem to do (though it is really hard to tell given it is being viewed through the filter of "journalistic professionalism") it is not surprising that the young can't seem to get ahead.

Deferred gratification? Living within your means? Not things that were very popular in the early part of this century or in the 1990s. What role models do they have? Who started the craze for acres of granite in every kitchen? Add to that the crushing debt from college loans and it is hardly surprising that none of the young are saving.

Could they? Certainly. But how many are willing to drive a 10 year-old car, cook their own meals, quit smoking, drinking, whatever? How many people today would cancel their cable/satellite service to pay off the college debt early? High-speed internet? Cell phone? iPad? Whatever?

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