Boomer’s Wake Rule #7 – Beware of Boomers Bearing Gifts! Especially Politicians' Gifts!
The American Congress is comprised of boomers. The average age of the house is 56 years old and the senate is over 61. That makes sense because the largest voting demographic happens to be boomers as well.
So let’s think about this a bit. If they are older and have retirement in their sights and they represent older people with retirement in their sites, don’t you expect their laws and budgets to favor those with retirement in their sites?
In the 80’s the politicians gave us the wonderful gift of saving the Social Security system for 70 years. Nice! It is set to fail right around the time those of us in the Boomer’s Wake will just be ready to start taking it. But why would they care? They will be dead by then. At least they were covered. Now, with 40 years down and 30 to go, it is already a foregone conclusion that the system goes in the red by 2017. Coincidently just years before the first of the Boomer’s Wake reach retirement age.
In 2003, George W. Bush and a bunch of other old guys decided to “stimulate” the economy with tax cuts. Hey. Everyone loves a good tax cut right? Well, beware of boomer’s bearing gifts. For the gift of making the recession a little less deep, the US Debt has now risen from 5 Trillion dollars to over 10 Trillion, all in the past 8 years.
Who is going to pay for this? Retired people? Nope. Us!
And now, in the past 6 months, the US has committed the taxpayers to the following:
Tarp 1 - $700 Billion
Federal Loans - $3 Trillion
Backstops - $5 Trillion
“Stimulus” - $780 Billion
And in the works, Tarp 2 - $1 Trillion estimated
Do you even have the capacity to understand how much $1 Trillion really is? I heard a funny way to understand it the other day. If you spent $1,000,000 (1 Million dollars) EVERY DAY from the day Christ was born until today, you still haven’t spent $1 Trillion dollars yet.
Who is going to pay for this? Retired people? We Are!
And what will really make you sick is when you actually accrue for the total debt associated with the future Social Security and Medicare promises. Our debt quickly goes from a measly $10 Trillion to a whopping $60 Trillion over the next 30 years.
Why are the same people so angry about the Madoff $50 Billion Ponzi scheme when they are perpetrating a $50 Trillion Ponzi scheme right before our eyes?
America is broke! And going more broke by the day. But don’t take my word for it. Watch this video: http://www.iousathemovie.com/
For those of us in the Boomer’s Wake, we need to prepare.
Prepare for what, you ask?
- Higher taxes. We are the first to receive the honor of starting to pay the tab. Watch out for taxes shooting up to pre-Reagan levels after all the new tricks fail to work and China decides to stop lending us money.
- No more Social Security. That system will not be available for us. Maximize your own financial education and investments, starting now and stop believing what the boomers tell you. They are looking out for their own investments, not yours.
- Inflation. When our annual deficits hit $1 Trillion, $1.5 Trillion and $2 Trillion, the US has no choice but to print money. And that money will be lent out to less and less willing borrowers at higher and higher interest rates. Learn how to protect from inflation and/or how to trade other currencies, commodities and bonds, in both directions.
- Useless Stock Markets. When you have nothing and no one will lend you anything more, you stop buying cars, iPods and expensive clothes. The companies that sell things will not thrive here in the US for a long time to come (except truly niche and those selling globally). Therefore, your stock mutual funds will likely fluctuate between +/- 40% in total for the next decade, but likely be no better off 10 years from now than it was in June 2008. Learn how to invest outside the box and outside the norm.
We have had our heads in the sand for too long. It is time to take action. Time to learn. Time to gain experience doing something outside of the “buy and pray” approach of the 2000’s. You are on your own. Take action today to learn to survive and thrive the Boomer’s Wake.