Boomers Own Half of U.S. Wealth. So Why Are We Seeing More Homeless Boomers? | WSJ

America can't afford universal healthcare at the level of service voting/working Americans demand it to be.

Social security and medicaid have been nickel and diming Boomers/Silent Gen, and those might run out of money in the next 6-10 years without any serious reform.

Maybe we just let everything healthcare related fail along with all the regulation attached and reset from the ground up. At this point, it's an albatross on society and our economic future...

 

As we continue to point fingers and (fire)arms at each other for who to blame for our impending debt Tsunami, it still circles back to the group no politican wants to cross with.

Posted in some other thread but article is chunky. I'm gonna post until the 10k word limit and let folks decide if it's worth reading.
https://manhattan.institute/article/a-comprehensive-federal-budget-plan-to-avert-a-debt-crisis-2024
A Comprehensive Federal Budget Plan to Avert a Debt Crisis

Why Social Security and Medicare Face a $124 Trillion Cash Shortfall
It is a popular myth that Social Security and Medicare are fully paid for and cannot contribute to budget deficits. In reality, Medicare Parts B and D benefits (physician and drug benefits, respectively) are not pre-funded by payroll taxes at all and represent a federal handout no different from any other income support program (senior premiums finance only one-quarter of their cost). The “trust-fund” programs of Social Security and Medicare Part A are entitled to run annual deficits in proportion to their prior-year program surpluses, while receiving annual general revenue subsidies in the form of interest payments on their bonds (and occasional bailouts of payroll-tax holidays). Moreover, CBO projections assume that Social Security and Medicare Part A benefits will continue to be deficit-financed even after their trust-fund balances reach zero in the next decade.

The costs are soaring, as well. Between 2008 and 2030, 74 million Americans born between 1946 and 1964—on average, 10,000 per day—will retire and receive Social Security and Medicare benefits. Of this group, those collecting early retirement at age 62 and living to age 84 will spend one-third of their adult life receiving federal retirement benefits.[8] The combination of more retiring baby boomers and longer life spans will expand Social Security and Medicare caseloads far beyond what current taxpayers can afford under current benefit formulas. In 1960, five workers paid the taxes to support each retiree (and, of course, Medicare did not exist). The ratio of workers to retirees has now fallen below 3–1, and is on its way to 2–1 by the 2030s. When today’s teenagers are adults, each married couple will basically be responsible for the Social Security and health care of their very own retiree.

These demographic challenges are worsened by rising health-care costs and repeated benefit expansions enacted by lawmakers. Today’s typical retiring couple has paid $214,000 into Medicare and will receive $635,000 in benefits (in net present value), partly because Medicare’s physician and drug benefits are not pre-funded with payroll taxes and are only partially funded by retiree premiums.[9] Most Social Security recipients also come out ahead. Thus, most seniors’ benefits greatly exceed their lifetime contributions to the Social Security and Medicare systems. By 2030, 74 million baby boomers will have joined a retirement benefit system that runs a substantial per-person deficit.

This year, Social Security and Medicare will collect $1,701 billion in payroll taxes and dedicated revenues and pay $2,349 billion in benefits. Add in $21 billion in resulting interest costs from this borrowing, and Social Security and Medicare will contribute $651 billion to the 2024 budget deficit. As Social Security and Medicare costs mount, these annual shortfalls will leap to $2.2 trillion a decade from now (Figure 4).[10] This will drive the vast majority of the growth of the budget deficit.


The long-term figures are even more dire. CBO data project that, between 2024 and 2054, Medicare is projected to collect $28 trillion in dedicated revenues (such as payroll taxes) and spend $77 trillion in benefits. This shortfall will, in turn, add $38 trillion in interest costs, bringing Medicare’s total budgetary shortfall to $87 trillion. During that same period, Social Security will collect $74 trillion and spend $94 trillion, combining with $17 trillion in resulting interest costs for a total shortfall of $37 trillion (Figure 5).[11] (To adjust these 30-year totals for inflation, trim by one-third.) Rather than adequately self-finance through payroll taxes and premiums, these two programs are set to add $124 trillion to the national debt over three decades. The rest of the federal budget is roughly balanced over the next 30 years, depending on the fate of the 2017 tax cuts and discretionary spending.


Figure 6 expresses the same projections in a different manner. By 2054 Social Security and Medicare will collect 6.3% of GDP in dedicated revenues and spend 11.3% of GDP in benefits—plus 6.3% of GDP in interest costs resulting from these two programs’ deficits. Allowing two programs to run a budget deficit of 11.3% of GDP is unsustainable. There is no way for other tax increases or spending cuts to finance that gap.


Most Seniors Are Not Poor
The Social Security and Medicare debate often brings opposition to reform based on the myths that: 1) most seniors are poor; and 2) seniors are simply getting back the money they paid into Social Security and Medicare. The first myth of widespread senior poverty is a holdover from the 1930s, when Social Security was created. Today, senior citizens are the wealthiest age group of Americans in history.[12] Millions of retiree households continue to earn incomes greater than $100,000 even after retirement, driven by (nonhousing) net worths in the millions.[13] Senior household incomes have grown 60% faster than inflation since 1980, compared with 15% for the average worker.[14] In fact, because most retirees are wealthier than the taxpayers financing their benefits, Social Security today largely redistributes income upward, not downward. These effects are further magnified by the fact that most seniors no longer face mortgage or child-raising expenses. Of course, many seniors still struggle (which can be affordably addressed by hiking the minimum benefit). Nevertheless, seniors have the lowest poverty rate of any age group.[15]

The relative wealth of seniors should influence the conversation of the second myth that seniors are merely getting back what they paid in. A middle-earning couple turning 65 years old next year will have paid $997,000 over their lifetime into Social Security and Medicare yet receive $1,466,000 in benefits (all adjusted into present value). Lower-earners as well as one-earner couples will come out even further ahead. Moreover, Social Security and Medicare automatically become more generous for each generation (even after adjusting for inflation), partly because of benefit formulas that provide subsequent generations with much higher initial benefits. A middle-earning married couple retiring in 2050 will receive Social Security benefits that are more than double the benefits of those who retire in 2000 (again, these figures are adjusted for present value).[16]

So a key question for policymakers is whether it makes sense to raise taxes on working families by a staggering $69 trillion over three decades[17]—in the largest intergenerational wealth transfer in world history—to ensure that even millionaire seniors can continue to receive Social Security and Medicare benefits far exceeding their lifetime contributions to those systems (this figure reflects the program shortfalls excluding interest costs that would be averted).

 

Time Is Running Out for Reform
A common argument against addressing Social Security and Medicare is that “we’ve been hearing these same fake warnings for decades and nothing has happened.” This view misinterprets the warnings. Between 1999 and 2023, the year in which the Social Security trust fund was projected by the system’s trustees to reach insolvency has moved up—not back—from 2036 to just 2033.[18] This period corresponds to the point at which virtually all 74 million baby boomers will have retired into Social Security and Medicare, and rising health-care costs will have deepened Medicare’s shortfalls. The aggressive case for reform in the 1990s and early 2000s was driven not by an impending budget crisis but rather a hope that Social Security and Medicare reforms could be gradually phased in while the baby boomers were still in their peak earning years. That opportunity was missed, and now the Social Security trust fund is in deficit and heading toward insolvency on a similar schedule as was warned 25 years ago. Medicare’s annual shortfalls (most of which are not limited by a trust fund) are accelerating as well.

Thus, responsible reforms cannot wait any longer. Every year, 4 million more baby boomers retire into Social Security and Medicare, and within six years nearly all 74 million will be retired. As baby boomers move into their seventies and eighties, they will be unable to absorb any significant reforms to these programs—leaving the massive taxpayer costs politically irreversible. Surging interest costs are mostly irreversible, too, because of the rising debt that will have accumulated (and will continue to accumulate if Social Security and Medicare cannot be reformed) and because the rising interest rates in this situation cannot simply be reversed, either (unless the Federal Reserve unwisely commits to monetizing much of the debt). In fact, if interest rates are driven upward by financial markets losing faith in the federal government’s long-term ability to manage its debt, the resulting risk premium might remain baked into interest rates for several years or even decades. Thus, every year of delay dramatically raises the cost of reform.

Nor is it any longer sustainable to grandfather out of reform everyone over the age of 50. That window closed in the 2000s, when the trillions in unfunded costs were still 20 years away. Now, such a policy would grandfather out the 74 million baby boomers whose costs are driving the shortfalls, as well as most of Generation X. It would gradually phase in reforms beginning in the 2040s and thus leave in place nearly the entire $124 trillion Social Security and Medicare shortfall that is projected over the next three decades. Decades of denial and procrastination by lawmakers (and voters) mean that Social Security and Medicare reform is no longer just about future generations. More than 10,000 baby boomers are retiring every day, trillion-dollar deficits are here, the trust funds are approaching insolvency, and reform can no longer wait for future generations.

How a Debt Crisis Might Play Out
The national debt’s share of the economy cannot rise forever. At a certain point, even large global savings markets will be stretched, and investor confidence in the U.S.’s ability to finance its debt will evaporate. Additionally, interest costs will consume an increasing share of tax revenues, creating pressure for unpopular tax increases and spending cuts.

It is unclear from whom Washington will borrow as much as $175 trillion (assuming that current tax cuts and spending programs are renewed) over 30 years to cover its projected deficits. China and Japan each hold roughly $1 trillion in U.S. debt and have neither the capacity nor the interest to cover more than a tiny fraction of impending American borrowing.[19] Other countries limit their Treasury holdings, and the Federal Reserve has been trying to shrink its $5 trillion holdings of Treasury debt.[20] That leaves the U.S. financial markets—insurance companies, investors, pension funds, and state and local governments—to cover perhaps $150 trillion in projected Washington borrowing. The impending debt surge has barely begun, and yet a 2023 Wall Street Journal headline had already declared: “Wall Street Isn’t Sure It Can Handle All of Washington’s Bonds.”[21]

Initially, Washington’s insatiable borrowing demands will push up interest rates (which will, in turn, further widen budget deficits). But at a certain point, the financial markets might be unable to supply Congress’s lending demands at plausible interest rates. Even before that point, investors might simply lose confidence in Washington’s long-term finances, and shift their investments away from Treasury holdings. Ultimately, Washington cannot borrow what investors will not lend and a vicious cycle of rising debt and interest rates increasingly appears to be the most likely outcome.

A debt crisis will not likely come in a single cataclysmic crash that brings chaos and depression. Instead, persistent deficits of 8%–10% of GDP might bring a series of financial “mini-panics” of rising interest rates and economic stagnation that force Washington to rein in budget deficits. The most likely scenario involves Congress initially targeting lower-hanging fruit such as taxing the rich, trimming defense, and cutting programs such as foreign aid. When these savings prove insufficient to close such large and swelling deficits, lawmakers might reform other tax breaks, as well as spending on antipoverty and social programs. Eventually, they will discover that Social Security and Medicare shortfalls approaching 10% of GDP cannot remain completely protected by eviscerating the rest of the budget and taxing the rich at revenue-maximizing rates. With all savings alternatives tapped out, the only remaining option will be to go where the money is: Social Security, Medicare, and middle-class taxes. If most baby boomers are too old to absorb benefit changes, financing the projected budget deficits might require payroll tax increases as high as 10% combined with a value-added tax exceeding 10%. The result will be a massive debt, sluggish economy, high interest rates, and European-sized taxes—without the accompanying social benefits enjoyed by working European families.


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Best case IMO:

Sack Rome and hope the promised self driving AI bots can $$$hip you off planet like they do in those Blade Runner movies.​

 

Retirement Reservations?

Stephen Miller sounds like the right kind of guy to make that happen.

 

Shareholder capitalism brings the focus back onto the topic.

The system pre 80s prioritized consumer and stakeholders with a more managerial focus. By valuing a company solely on stock price and buybacks (over traditional growth or dividends), you open the door to whom has the most influence over the stock price.

It opens things up to financial engineering and a short term focus for immediate gains.

Retail investors and even insiders generally make up a fraction of a corporation's shareholder percentage. Trillion dollar pension funds, money funds, and retirement funds only have a primary interest of guaranteeing the highest yields. They aren't judged on overall profitability rather relative profitability over their peers. In the runup to the financial crisis, it wasn't good enough to beat the S&P500 index. They had to be the best.

It's similar to the tragedy of the commons where the elderly individually aren't aiming for morally bankrupt policies, but the mandate they put on their fund managers are all mostly the same: a guaranteed or better yield promised when they signed the contract with their fund managers.

One could legititmately that argue any retirement class would do the same thing, but the numerical strength of their demographic coupled by the terrifying prospect of a sustained Depression-like crash where all funds wouldn't recover for a good decade in 2008 paved the way for the government to roll over and enable the longest bull market in history.