Wednesday, August 15, 2012
Marcus Carey’s On the Marc: A message to the younger generation — Get off high horse
Romney and Ryan get it. Medicare is an “entitlement” because we who have paid into that plan all of our lives are entitled to what we were promised.
I know, younger people think that we were fools. There was no real fund and if there ever was supposed to be one, Congress stole it.
Younger people say we should have saved more, like they are, in 401K plans, IRA plans and in banks. But in reality, that’s just the fad of the day driven by banks who need more money on deposit in order to justify their lending.
The Federal Reserve is more reserved when it comes to lending to weak banks, Congress is under pressure to NOT give any more banks a big bailout check and so banks need a source of cash to lend so they can make buhzillions from the interest that gets paid.
Okay, I get it. Each generation has its own ideas of how to plan for the future. But for those of us nearing retirement part of our planning took into account that our health insurance costs would come under Medicare and that our incomes would benefit from Social Security.
Why are they called entitlements? Because we are entitled to get what we were promised and paid for out of our paychecks.
Younger people however don’t like the idea of paying taxes to support elders. It cuts into their Mercedes budget and makes it tough to outfit their kids for school in Patagonia clothing.
But seniors are not able to go back and re-work their plans. Time has gotten by them, work days are over, the years necessary to create a new savings plan don’t exist, the pages of the calendar are turning faster.
Our generation operated with the “appreciating assets” model of economics. Not too long ago people were “flipping” houses to make money. Everything we bought was going up in value. Spending was the fuel of the economic engine. Buying goods created demand. Meeting that demand created jobs and equity and profits which fueled more spending. Our generation built the longest period of prosperity in the history of the world.
Had we squirreled away our money in banks, and never borrowed, banks would have gone out of business. Banks are in the business to loan money. Their profits come from interest.
Had we squirreled away our money in banks it would not have been there to buy the things that companies made creating jobs, increasing revenues for government services, providing investment opportunities in real estate and in the stock market.
Times have changed, but the new model, doggedly defended by the younger generation as the “best” model, to save your money in banks, is far riskier than they appreciate. Banks fail and when they do your money is gone. You have nothing tangible except a paper statement.
Do we boomers wish we would have seen this crash coming? Of course. But hindsight is 20-20. How many people in the USA actually saw this situation we are in early enough to do something very smart to take advantage of it? Would you say one million people, 20,000 people in each state? Probably not.
So for the sake of respecting the decisions made by retirees and those nearing retirement, you young folks need to get down off of your high horse, realize that half of your ideas are being driven by banks who need your money because their other sources have dried up, and get on board with standing firm to protect Medicare and Social Security for your parents and grandparents.
The prosperity you enjoy didn’t happen by accident. Despite what the President said, we built this.
Marcus Carey is a Northern Kentucky lawyer with 32 years experience. He is also a farmer, talk radio host and public speaker who loves history and politics. He is a prolific and accomplished writer whose blog, BluegrassBulletin.com, is “dedicated to honest and respectful comment on the political and cultural issues of our time.” He writes a regular commentary for KyForward.