US youth urged to attack baby boomer greed

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By Leith van Onselen

Earlier this week, the New York Times published an interesting article arguing that America’s young will be disproportionately affected by the fall out of the US debt ceiling debacle:

Eventually this shutdown crisis will end. And eventually the two parties will make another stab at a deal on taxes, investments and entitlements. But there’s one outcome from such negotiations that I can absolutely guarantee: Seniors, Wall Street and unions will all have their say and their interests protected…

Short of an economic meltdown, there is only one thing that might produce meaningful change: a mass movement for tax, spending and entitlement reform led by the cohort that is the least organized but will be the most affected if we don’t think long term — today’s young people.

Whether they realize it or not, they’re the ones who will really get hit by all the cans we’re kicking down the road. After we baby boomers get done retiring — at a rate of 7,000 to 11,000 a day — if current taxes and entitlement promises are not reformed, the cupboard will be largely bare for today’s Facebook generation…

Oddly enough, leading the fight for America’s young is Stanley Drukenmiller, a legendary baby boomer investor and founder of Duquesne Capital, who is urging America’s “future seniors” to start a movement to protect their interests.

Earlier this year, Drukenmiller appeared on Bloomberg whereby he warned that the ageing of the population and transfer payments to the elderly (paid for by a declining tax base) threaten to permanently constrain the US economy and create an inter-generational war.

Now Drukenmiller has taken measures one step further, giving speaking tours to crowds of students at Berkeley, Stanford, Brown, U.S.C., Bowdoin, Notre Dame and NYU, urging them to take action against intergenerational unfairness:

“My generation — we brought down the president in the ’60s because we didn’t want to go into the war against Vietnam,” Druckenmiller told an overflow crowd at Notre Dame last week. “People say young people don’t vote; young people don’t care. I’m hoping after tonight, you will care. There is a clear danger to you and your children.”

Whenever Druckenmiller (a friend) is challenged by seniors, who also come to his talks, that he is trying to start an intergenerational war, he has a standard reply: “No, that war already happened, and the kids lost. We’re just trying to recover some scraps for them.”

With graph after graph, [Drukenmiller] show[s] how government spending, investments, entitlements and poverty alleviation have overwhelmingly benefited the elderly since the 1960s and how the situation will only get worse as our over-65 population soars 100 percent between now and 2050, while the working population that will have to support them — ages 18 to 64 — will grow by 17 percent. This imbalance will lead to a huge burden on the young and, without greater growth, necessitate cutting the very government investments in infrastructure, Head Start, and medical and technology research that help the poorest and also create the jobs of the future…

It seems deeply offensive to me that we will be asking these poor children from Harlem to subsidize a generation that is, by and large, more well-off than they are, and then leave them deeply indebted in an America that had eaten the seed corn of the next generation.”

Among the measures recommended by Drukenmiller include: increasing taxes on capital gains, dividends and carried interest – which currently overwhelmingly benefit the wealthy and retired – so that they more closely match taxes on wage and salary earnings; means testing health care and social secuity so that they are needs-based not aged-based; and cutting corporate taxes to zero, so that companies will have incentives to hire more workers.

It’s worth pointing out that Australia’s demographic profile is very similar to the US.

The below chart compares the dependency ratio – i.e. the ratio of the non-working population, both children (< 20 years old) and the elderly (> 65 years old), to the working aged population – in Australia versus the US. As you can see, the dependency ratios fell steadily in the decades to 2010. However, in the decades ahead, both countries’ dependency ratios are projected by the United Nations to rise steadily as the baby boomers retire and their populations age:

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It’s a similar story when the number of working-aged people (i.e. those aged between 20 and 65) is compared against the elderly (i.e. aged over 65). The ratio of working aged population to the elderly is projected by the United Nations to nearly halve by 2035 (see next chart).

ScreenHunter_06 Oct. 18 08.15

Similar demographic constraints are coming to our shores as well.

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Comments

  1. Generational Theory is based on what the cohorts attitudes when they were the same age. My premise is that is boomers were faced with the same challenges that 20+ years olds face today, they would take to the streets in protest. Gen Y now are taking to social media to express their concerns and it does not have the same impact.

    • The boomers were a large wave moving through and had the numbers to impact the vested interests and rent seekers – I doubt very much X and Y will have the same impact.

      • The boomers (5.3 million) are still a large wave and still influencing policy to benefit them only.

      • The big demographic shift of voters who will soon pay no income taxes will make raising income tax rates easy and raising GST politically unpalatable.

        Not to mention any efforts to curb growth in social security and health spending.

      • Rocksteady – we are already there. PAYG taxpayers are smashed with income taxes and GST.

        Asset owning boomers are paying almost no tax on massive capital gains.

        But yes – expect income taxes to rise further but boomers assets to be protected.

    • In my experience the gen y who have a semblance of a social conscience are a bunch of morons who think Labor or the Greens would save them. They think that like the boomers, taking to all that hippy stuff and taxing the “rich” (ie people on $100k) will do the trick, and sure there would be some benefits like the good NBN. But here at MB we know it’s Georgist economics. How the hell do you sell that? Most people have no idea about it. The media, both the “left” and the right media, just support rent seeking and wouldn’t publish anything about it in a million years, oh, except for Jessica’s article the other day, but it’s just a bone and will have little to no impact.

      • Phil
        1. Lower the voting age to 16 and stop anyone over the age of 90 voting. Both kids under 16 and those over 90 have no real idea about what is good for them or future generations.
        2. Death tax on the value over $1million at 25%, excluding rural and ongoing business transfers.
        3 Asset test the PPOR (value over $750k) for pension eligibility and also provide reverse mortgages exclusively from the govt, to those asset rich/cash poor. It is not fair that pensioners can live in a $10 million dollar home, have $1m in cash and still get a part pension!

      • X&Y are not voting against their interests just through ignorance, they have been heavily marketed to and in essence ‘tricked’ into the boomer supporting policies they then vote for.

        The representatives of X&Y in the media and in politics and the media are really just the sellouts facilitating this lie. Young politicians talk a bit about young but really i have never seen any serious analysis of the generational equity issues.

        Take the simplicity with which the sugar, fat and gambling etc industries have normalised their product through clever marketing, and apply this to something really serious like who wields the power to collect rents, and you can see that these young voters don’t really stand a chance.

      • Rent seeking is the culture created by FIRE and the media. They sold the image of a person taking debt and join the big boys dreams. They sold the image of a bogan celebrity, who don’t need to work to get rich, but just to do something extraordinary and stupid. They assured people that debt is good as greed and saving is bad and that if you take more debt you make more wealth.

        Bogans don’t know that debt can make them rich, only if it is used as productive capital, not consumption. Bogan doesn’t know that for any other kind of debt there must be more bogans ready to jump on the ponzi schemes to make him wealthier. Bogan doesn’t know that with more debt without production everyone would be poorer, but the banksters.

      • willy…so my business, a very ethical prudent employee happy family business should be killed off, and everyone who works in ti unemployed, just because I die?
        Death Duties are just crap! Taxing someone more because they don’t live as long as others is so morally corrupt! Tax whatever you damned well loike but don’t tax someone more because they have a habit of dying a bit younger! FFS you shouild give the family a bonus for lightening up on the demands of the world resources!

        This whole Death Duties thing running ehre is just ignorance based on some misinformed idea of reality combined with a wish to destroy good people just out of pique!

        This damned site promotes Death Duties but not a single person EVER answers the rational objections to the stupidity, immorality and mindless power delusion and jealousy. Why is that?

      • “In my experience the gen y who have a semblance of a social conscience are a bunch of morons who think Labor or the Greens would save them.”

        +1

      • In my experience the gen y who have a semblance of a social conscience are a bunch of morons who think Labor or the Greens would save them.
        Maybe they simply consider them the least worst option.

        They think that like the boomers, taking to all that hippy stuff and taxing the “rich” (ie people on $100k) will do the trick, and sure there would be some benefits like the good NBN. But here at MB we know it’s Georgist economics.
        Uh, as I understand “Georgist economics”, it’s about taxing natural resources like land and minerals.

        That’s pretty much the epitome of “taxing the rich”.

  2. Natural forces will do most of the work for us, all ponzi schemes eventually collapse.

    The shear volume of boomers will guarantee that the systematic greed they have established for themselves will be unsustainable due to the exact same demographic bubble that has benefited them to date!

  3. Not a genuine proposition, but the only chance X and Y have of redressing these gross imbalances is to remove the right to vote once you retire and stop paying taxes…

    • Mining BoganMEMBER

      I prefer an uprising.

      The young and mangy won’t be happy until they see heads on stakes.

      • GunnamattaMEMBER

        I’ve become a heads on stakes man.

        As a younger dude I always thought suasion and rational argument would do the trick. But I’ve been around the world over a number of years and seen it in a range of situations. The vested interests ultimately need to be given the message the hard way.

        They (vested interests) will control the response by police and laws etc, and it will devolve into something nasty. But here in Australia you basically have two parties not giving a rats toss about the future, so theres nothing really to lose. All that is required is the trigger – I reckon it could take a few forms, but wouldnt mind a nap bet on something real estate related.

      • GunnamattaMEMBER

        Nuts, let me make some observations about nuts.

        Monetary policy revolving around crushing the globally exposed side in order to fit in a mining investment boom? – Nuts

        Politics tellings kids to take out 400K mortgages to house young families? – Nuts

        Telling them to service those mortgages in globally uncompetitive workplaces or in transfer payment supported sectors? – Nuts

        Politics banging on about public debt when private debt is off towards alpha centauri B? – Nuts

        Negative gearing, Tax concessions for speculators and SMSFs into RE as assets rather than homes as public goods? – Nuts

        Superannuation for anyone under 50? – Nuts

        Run immigration sky high without doing something about infrastructure or putting together a narrative of an economy in which they do something once they are here? – Nuts

        Plenty of nuts out there….

        A few more nuts wont make on iota of difference one way or the other. Indeed given the events in the US yesterday it would appear that Nuts is the way of the future.

      • Heads on stakes IS nuts. Calls for violent insurrection from those living in one the best countries in the world with a globally enviable standard of living is ludicrous.

        You dudes don’t get out enough – zero understanding of true hardship. A cosseted bunch perpetually whining – tiresome indeed.

      • I’m with 3d on this. It should not have gotten this bad. Why can’t the youth organise them selves better and have non violent protests. What about a union for the young? Why not start a political party, with crowd funding and make all this information more easily accessible?

      • Mining BoganMEMBER

        FF

        These things have been tried and tried again but they keep on getting shutdown. It’s public apathy that is quelling any sort of agitation at the moment.

        There will come a time when even the apathetic will realise something is wrong. Then it will be time to lock the doors.

        Edit. I find it amazing that the only protests that have gained any serious media attention in Oz were Twiggy and Gina on the back of a truck trying to save their entitlements and Alan Jones trying to incite the murder of a Prime Minister in his Convoy farce. No wonder the young and mangy have turned off.

      • dumb_non_economist

        2d,

        I guess the point is that for the younger generation and those that they bring into this world will not find the Australia you speak of further down the track.

        Edit: I doubt we will likely see anything like what has been mentioned, we are much too “comfortable” and way more conforming than how we like to view ourselves, that includes the boomers.

        I agree with Gunna, the older generation will sell the younger down the drain, and lie to themselves while doing so.

      • @Mining Bogan. It is partially apathy and partially ignorance. The voice of reason has been low and meek where as the voice of treason has been load and booming.

        All this has been masked because we have had it a bit too good post GFC. But Rudd was starting to think post mining capex etc. The current bunch put fingers in their ears and sing la la la.

        We need to get people to understand the issues and ask the questions. How many times did housing and NG come up in Q&A during the elections. At least once in every debate but was pushed aside. Now anyone who thinks they are going to be millionaires by owning two IP’s and not realising what is actually going on will nto bother but if you keep drumming it in, maybe there is a chance. Even here, the people are surprised when I show them numbers.

        Apathy comes from ignorance. Get rid of the ignorance and things will start looking up. BTW the Boomer’s will have a larger voting block, but it will be Gen X&Y paying the bills tarting now.

      • ‘Head on a stick’ will only lead to more heads on sticks, rather than reform. The Arab Spring provides us with a recent example.

        When the housing crash inevitably comes, it will destroy most of the ‘wealth’ the Baby Boomer holds. What comes after will define the future of Australia.

      • Those who make peaceful revolution impossible will make violent revolution inevitable. – John F. Kennedy

        It’s in the hands of boomers – They either stop funding their lavish retirement ponzi schemes on the back of young debt slaves or be prepared to physically defend their aged care facilities when the revolution arrives.

      • There is a difference between advocating violence in the hope of affecting change and advocating change while realising that it may lead to violence due to the entrenched nature of things. Everyone here seems to promote the latter.

      • @Mav I cannot understand why this can’t be a peaceful revolution. Most of what is said here will come to pass anyway but can be sped up.

      • “Heads on stakes IS nuts”

        Calls for it allows them to think they are “engaged”, while they follow the same tired path. Vote for the same twats and splutter at everyone on blogs/fb/twit about how unfair it is, then vote for the same fucktards next election, rinse and repeat a few times, retire and complain how the youth of “today” don’t have any respect, or have to work as hard as they did.

        Look at the voting patterns, no one gives a fuck at the ballot box, it’s hardly likely they would take up a pitchfork. Bunnings* in most places don’t even sell pitch forks and most Gen X and Y aren’t even going to know which way is up… you should have seen the trouble I had to go through to get a handle for an Adze !

        Albeit some smart entrepreneur (no Aussie of course, they are too busy at the bank organising finance for their next business enterprise, buying a house) will make an App “Which way is up” which will allow them to make a fortune.

        * Full disclosure, I own WES, Older Gen X

      • +1 Mav

        Very much doubt we will see any steps by either of the major parties towards addressing the intergenerational inequity that is occurring.

        The best non-violent solution would be for an alternative party to gain sufficient power in the Senate so that when combined with a hostile opposition, they could effectively thwart any Govt legislation.

        A double dissolution would not be much of a threat if such a party could garnish a sufficiently large and determined power base, and know that it would be returned in similar numbers

        Blocking supply would be great, but would probably not be feasible as it would still require the support of one or the other major parties, and both are too much in bed with the establishment, in one form or another, to ever risk another Whitlam episode.

        Still the resulting political chaos of a small party continually blocking key legislation may be enough to un-nerve foreign investors in Australia sufficiently that the cost of lending to us increases enough to threaten the establisments debt bubble triggering that long hoped for external event to bring about change (it seems to be working for the tea party).

        Prior to the motor vehicle enthusiasts party getting elected I never considered this a much of possibility, but their election filled me with such hope that I even started a facebook page:

        https://www.facebook.com/pages/Reform-Australian-Housing/186709294842549

        (feel free to join me all other 11 members lol)

        If you want to attack the boomers power base, you have to do so by undermining the asset from which all their power is derived.

      • What 3d neglects to say, is that without action the future of your children will be that of the impoverished in other nations. The country may be ok for now, but the decline in egalitarianism and equality is underway and moving fast.

        3d has already conceded he does not want to swap lives with the poor of Brazil, but he loves the idea that he is not one of them.

        Those at the end of the wealth spectrum in Australia are looking down a South American path – the wealthy asset holders would rather see a massive population of immense poverty than cede their position at the top of the rent seeker tree.

      • GunnamattaMEMBER

        Sorry just back from a feed……

        Disco, put me down with you – I dont do FB but if you get a non facebook page I would sign in an instant.

        But that plan is a goodun.

        Get a big enough presence in the senate, and then be erratic enough to just unnerve the lot. You want a mixed bag of candidates who all have some sort of specious connection but no discipline whatsoever.

        Someone wants supply – you sell your vote for a housing amendment.

        Someone wants tax – you sell your soul for a housing amendment.

        Someone wants immigration – you sell your soul for a housing amendment.

        You enunciate clearly and loudly that there be no formal support for either side unless one of them clearly commits to ending negative gearing.

        3d1k, as for

        ‘You dudes don’t get out enough – zero understanding of true hardship. A cosseted bunch perpetually whining – tiresome indeed’

        I’ve seen the rest of the world and hardship chief. If ever there was a set of words which sums up contemporary Australia, you’ve nailed it. Zero understanding. It is shown by those who feel they have the power here, and it is my experience that it is this very circumstance which leads to a hardening of attitudes. What we have here is zero responsibility towards the future and zero acknowledgement that some are beneficiaries of the present to the cost of that future. Young Australians are effectively being treated as aborigines have been for most of Australia’s existence. Someone else sorting out their circumstances for them.

        While I wouldnt want to see violence, I have certainly seen the sort of circumstances in which it evolves as a seemingly logical response to denial, rejection and ignorance of those in power towards a subset of the community. We have the ignorance denial and rejection here, and it isnt just one side. Indeed it is the side with the whip in its hands (and the one the rest of society would logically look to for leadership) that embodies those qualities the most.

      • @Mav I cannot understand why this can’t be a peaceful revolution.

        Huh?? Try getting the powers-that-be to even recognize high property prices, much less a bubble.. or make policy changes to negative gearing etc.

        Boomers want status quo to be maintained.. revolution == change.

      • disco stuMEMBER

        Yeah, given my propensity for boomer baiting (Emess), I should probably try for further anonymity least our overlords put a hit out on me.

      • That’s all good DS.

        In fact, coming from the generation that took to the streets to;

        Protest against apartheid,
        End the war in Vietnam,
        End discrimination against women, indigenous people, gays
        Agitate for various environmental causes,

        it would be most gratifying to see the youf of today agitating for almost anything instead of sitting in front of the games console at age 35. That is, even if the agitation was to make their own homes cheaper to buy. At least it would be something.

        You might like to reflect that in the early sixties, there was no taxation on interest or dividends, no capital gains tax, only four percent of people ever got to go to uni, ‘poofters’ were regularly bashed, women could not by law do many many jobs, industry was strait jacketed by high tariff walls and a debilitating craft union culture.

        Almost all of that was addressed by the boomers.

        Now there is plenty of scope for improvement, be that negative gearing, land taxes, capital gains taxes, social reform such as euthanasia.

        How about you guys get out there, and get stuck into these things? If and when the list of things achieved by XYers is anywhere near the length of that achieved by Boomers, then you will have earned that house.

        At least, if you can get some euthanasia laws passed, you might get that inheritance a bit quicker than otherwise. And it would certainly make the ‘heads on stakes’ approach marginally legal. 🙂

        All good mate. I hope you guys actually will do something more than rant at the screen. But I am not betting my next first class ticket to Europe on it.

      • And there you go guys – if you are working hard and paying tax, then all you are really doing is feeding the likes of Emess, they are laughing all the way to retirement.

        Simple answer – pay as little tax as humanly possible. At the moment working in Australia is just feeding the boomers and retirees.

      • @Mav But no one has really tried. Apart from Steve Keen and David Collier, I can’t think of one person (MB aside) that has tried to bring this to the attention of the public.

        How many property spruiking adds do you see in the paper and on tv? How many do you see about the failings of the current system?

      • disco stuMEMBER

        Isn’t the Business Spectator more your scene Emess?

        Go check it out, you would feel far less threatened over there – say “Hi” to David Doyle when you get there 🙂

      • You are all still having the wrong debate. You are talking Boomers vs whoever. BS! For crying out bloody loud the debate is about production and productivity vs parasitism and consumption!

      • Totally agree fl. but… most of the rentseekers are boomers so by proxy it is a boomer v the rest debate.

      • GunnamattaMEMBER

        flawse, you are 100% on the money.

        It is certainly a ‘production and productivity vs parasitism and consumption’ issue…

        I certainly know boomers who arent investment property owning rent seeking tossers, and indeed know more than a few who think essentially much the same as I do.

      • Hi DS and all.

        There seem to be two sorts of discussions going on.

        On the one hand there are those who are looking at the problems of housing in terms of freeing up land supply, looking to different taxing models such as land tax, reform of negative gearing, CGT etc. This is productive.

        On the other hand we have those whose position seems to be (adopts Southern Hillbilly accent): “They terk our jerbs.” This is parasitic, because while those who go on about this will achieve zip, they will eagerly snatch at the results of the hard work of those people actually working to do something constructive.

        Those in the second category might feel more comfortable reading ‘Outdoor Life’, ‘Sports Afield’ and lookin’ at the adorable houn’ dawg in the latest issue of ‘Gun Dog’, or perhaps something to do with decorating the ute.

      • disco stuMEMBER

        Flawse, you are correct, but unfortunately AJ is also correct, you can’t have one conversation about seeking a resolution to the rent seeking parasitic behaviour you describe, without also having a simulations discussion on how the costs of resolving or unwinding these insidious effects on the economy, and who will pay for them.

        Assigning blame and then moving on is an important part of recognising and resolving a problem, otherwise how are we collectively going to learn from our mistakes? What ‘buy in’ are those who have most benefited from the rent seeking policies going to be compelled to tolerate when they don’t even recognise there actions to have been part of the problem?

        Now while it might be nice to think that in our progressive society we’d come to an equitable intergenerational solution, whereby those who have benefited most from the rent seeking policies are also the ones who should bare the majority of the burden. The reality is that it will be resisted at every step of the way.

        Emess, while like Gunna we all know and love boomer friends and rellies, who have effectively been left behind by their generations leadership and not benefited to the fullest extend, and there is obviously no arch boomer overlord conspiracy out there, the fact is, when you are in the minority and your opponent has the upper hand by controlling the story told through the media, the only really option is to force engagement.

        In our modern media, more concerned about footy results and house prices, nobody listens to someone shouting out middle off the road slogans from the middle of the crowed. If you want to provoke engagement than you have to stand on the edge and shout into the crowed, some will agree with you, some will think you a loon, but at least they will have thought about your subject and engaged with the idea at some level.

      • DS, I have had some in depth experience in dealing with workplace bullies.

        There is a very common pattern:

        First, they identify someone or some group they think they can attack safely. Check.

        Second, they build a case that at first glance is ok against that person or group. That case is often extremely flimsy, but even if not, bullying is still unacceptable. Check.

        Third they use nasty, demeaning and abusive language. Check.

        Fourth, if the object of the bullying suddenly snaps back at them, the bully defends themselves by saying it is ‘tough love’ or they are doing it for the ‘greater good’.
        Check.

        Your behaviour is, step by step, a classic case, and I am calling you on it.

      • So being unable to beat me with your reasoning, you are choosing to beat me with a label.

        Interesting that you are prepared accuse me of bullying when you blithely ignore the offence in your own comments and your own actions in effectively stalking me (which is a form of bullying) by posting critical and offensive comments on threads where I am having a civil discussion with someone else, or commenting on a completely unrelated topic.

  4. I suspect we’re a few years away from this still, but reckon we’ll see similar in Australia before too long.

    As with the respective country’s balance sheets, it is the public debt / entitlement issue that is worst in the US, whereas it’s our private debt / entitlement issue that will bite Australia in the bum.

    If anyone needs a current example then look no further than the SMSF Property rort currently doing the rounds

    • SMSF with 20 years of enforced saving competing with wannabe first home owners is my current personal irritation.

      The kids can not compete with their parents on this one.

      Residential property should be for residents to live in, not an investment vehicle for older people.

      • + billions. That’s the simple point, if people want to invest then go for it, knock your socks off, build a business, create something, buy shares whatever, but don’t just buy up a limited housing stock and pretend that it is anything other than base rentseeking.

        Housing is not a financial asset – making it one just makes the usury industry (and associated parasites) richer and the community poorer.

    • The big lesson from the GFC/Great Recession is that ‘private debt’ becomes ‘public debt’. Ultimately there is not difference – the two should be talked of as one.

  5. We’ve all been suckered. The rich have grown richer and they need to get the focus onto a soft target…..yes, the BOOMERS!

    So X/Y and the Boomers can all die killing each other while the rich keep growing richer.

    PS. In my defence, it’s Friday and I haven’t had my coffee yet this morning. My colleagues have noticed too. Better get that cuppa going pronto…

  6. I just submitted a comment that has disappeared.

    What I was trying to say was that I think eventually the tide will turn but as long as 2/3 of the population are property owners, the government will continue to pander to the vested interests.

    Also, I don’t think baby boomers are to blame. Nobody thought house prices could get to where they are today in such a short space of time. Those who did accumulate properties and watch their wealth soar were very lucky. But not all baby boomers have been in a position to buy lots of real estate, though in hindsight, many probably realise they actually could have done so.

    The government needs to be lobbied loud and hard. Of course they will ignore the voice of the disenfranchised, the voice of those locked out of home ownership due to ill-thought-out government policies, but there needs to be a persistent, united and loud voice. This voice needs to shout from the rooftops (of their rented homes) until the government cannot ignore it any longer.

    • I agree MD is right nobody thought Sydney prices could climb SO high. Yet here we are. I know many US based Aussie engineers with good jobs and lots of experience that talk about returning one day, but in reality it is now economically impossible, to return and have anything like their current lifestyle they need well over $1M just for a house (insane). In the end opportunity is the casualty, what could have been is sacrificed to support RE, and this is also a cost disproportionately paid by Aussie GenY and Zer’s (they are the logical beneficiaries of a genuinely Clever Australia with a booming knowledge based economy)

      It’s sad but the only cure is to fan the flames and drive it quickly to its logical end.

    • I am with MD. We need to make some noise.

      @CB At the same time, how many professionals will we loose because they can actually afford to buy a place at a reasonable price overseas.

  7. I’m not confident we’ll see much opposition from the young until it’s too late, which is a shame because they are getting shafted.

    All humans tend to focus on the here and now and discount the future (ie smoking). The things that lead to the protests in the 60s were affecting young people right then and there (dying in the Vietnam War, civil rights etc) – these current issues are abstract and distant.

    The economy is relatively good now, it’s easy enough to get a job – life’s generally good right now for young folk. It’s when unemployment starts to bite and the bills starting rolling in to support the aging population that the penny will start to drop.

  8. 85% of boomers will be selling their investment properties to fund their lifestyles and increasing health/aged/dementia care costs.

    That will provide increased employment opportunities for those that want it, leading to increased opportunities for presently disaffected worker cohorts and increasing participation rate.

    The fact that those that have spent a lifetime working and paying taxes at much higher rates than now exist have accumulated wealth at retirement is only normal prudence (helped by 9% super contributions).

    If a boomer is 60 today about half will be gone in 20 years and 80% will be gone in 30 years. The younger generations will get what’s left. Many working in care industries will be getting it on the way through.

    • The participation rate will not increase under any circumstances while we go through this unprecedented agequake.

    • 85% of boomers will be selling their investment properties to fund their lifestyles and increasing health/aged/dementia care costs.

      Yes.. but selling to whom? And how will the buyers fund these purchases?? psst.. via a crippling mega mortgage debt.

      Therein lies the answer.. This is inter-generational extraction at work, not “accumulated wealth”.

      Yeah, Gen-xy and millennials will get some of money back (to pay interest to the banks) via trickle-down services economy of changing adult diapers. But I think they will reach for the pitchfork instead and poke it where the sun doesn’t shine.

  9. There is something very easy that X&Y can do as a quiet protest and that is to just opt out of paying tax in every way possible.

    Structure your life and career so that you are not forced into debt slavery, and you don’t need to waste the precious time of your life slaving away for the boomer generation while the government takes a massive bite of the income on the way through.

    This requires a commitment to reducing consumption and reducing the time and hours worked. This is surprisingly easy but requires young people to eschew the values and norms that the boomer marketers have implanted in their minds.

    The application is actually really easy and enjoyable. There is a clear choice between being a tired despairing rat in the race with your children living a sickly life in a tiny box with other disinterested people looking after them, or not.

    • aj, I think that would be too quiet a protest and not achieve the desired aim anyway.

      Isn’t what we want is that the government change its policies? I don’t think a quiet protest is going to do it. It needs to be loud and persistent.

      • Won’t work – we don’t have the numbers. As the last election has shown, the policies are not changing.

        The only thing people can control is how they live their lives.

      • The numbers might be bigger than you think. But I don’t think we’ve really tried. We all talk about this between ourselves, but meanwhile the government just goes about its business, unaware that its an issue, or at least, not much of an issue. It’s one they can easily ignore and sweep under the carpet. It’s not as though it’s even on their agenda to even discuss.

      • Its not on their agenda to discuss, it’s on their agenda to deliberately ignore.

        In my view the best way is to cut off the money supply, and that is all coming from X&Y as they leverage up and pay high income taxes. The challenge is of course that for every X&Y that opts out they will be readily replaced by a wiling migrant.

        My approach recognises this and shifts ownership to assets tied to the inevitable migration growth and opts out of paying tax to every extent possible. It is what it is, but i’ll be damned if i’m played a chump by the boomers to fund their retirement.

      • aj, how’s that going to work? Work less to pay less taxes? It costs to live. And yes, immigration would pick up the slack, so I think it would be a very subtle statement you want to make.

      • It is true, that people need to work to live, but they don’t need to buy into the consumption and housing game in the big metros in the way that they do.

        There are plenty of great cities in Australia outside the metros where housing is pretty reasonable and life is very liveable on a significantly lower wage.

        My main point is that the amount of salary income people need to survive and own a house in the cities is absolutely crucified in the tax stakes. So not only do they have a mega mortgage making them live like a dog (usury is just another form of tax), they are usually sitting on effective income tax rates of 30-40%, and paying 10% on consumption as they struggle to put the kids through school, pay off the house etc.

        The boomers on the other hand are high assets and low income, reasonably low domestic consumption, and they are creaming it because there is almost no tax on capital in Australia. And even if they are relatively high income they are sheltering it very effectively behind interest and depreciation expense for investments which can be done if you have sufficient capital. X&Y are getting royally f**d.

        So what is the answer – in a sense live like a boomer, make sure that your life is set up to have as low as possible income with any assets you do own tied to the inevitable migration growth (as the boomers thrash about to maintain their lifestyle as the tax base erodes).

        edit – it’s no so much a statement as a recognition of the inevitability that the X&Y case is futile. At least it erodes the tax base and puts pressure on the migration case which is a more visible challenge for the boomers – but really truth is they will have their way.

    • Agreed with aj.

      I actually have done this and it is actually the only way Gen X and Y can get back to the rent-seeker elites.

      I ensure my lifestyle pay as little tax as possible by not spending locally so that I won’t pay GST – basically I only spend most on fresh foods which are GST-free anyway while trying as much as possible not to do spending that contributes GST and stamp duties.

      By doing this you will do your best not to contribute to rent-seeking scheme of the rich baby-boomers who will suck younger generation wealth dry.

    • Kinda like the deadlocked in Broome or Nimbin bemoaning the corporates and the aspirational, clamouring for every kind of social spend, living off the grid and on the taxpayer and contributing sfa.

      • In comes 3d1k (the representative of the 80% foreign owned mining houses paid to obfuscate on these sites) to muddy the debate.

        Actually, kinda like contributing a lot to society because we have the time to look after our kids properly, volunteer within society and care for our relatives because we are not busy working like a dog to keep the rent-seeker classes – that you of-course represent – in gravy.

        So no, 3d1k, nothing at all like that, and nothing like the sad and pathetic person paid to sell out his community and country for 30 pieces of silver.

      • disco stuMEMBER

        OMG they’re everywhere! A veritable plague!
        Run for the hills…. oh no, it’s already full of tree changers! Run for the sea then…. aggh the way is blocked by sea changers! Is there no end to this infestation?
        Sorry Willy – been a long week and my reason is starting to slip (further) 🙂

  10. Bugger….! I’ve been missing out on a great discussion here.

    My preferred insurrection would take the form of young people clubbing together to buy a farm outside the UGB and building themselves houses on it with the aid of a few sympathetic builders. In Pommy-land this sort of thing does result in Police action and prosecutions.

    It is noted by many analysts that “informal” housing is simply too big a problem for developing countries to shut down; developed nations with the rent-seekers regaining power with a vengeance really need to get an “informal housing” backlash of a proportion too big to contain. Developed and developing nations are tending to converge in their “land rent/housing affordability” problems.

    • GunnamattaMEMBER

      Phil, I have to tell you…..

      I have in the last couple of weeks been discussing that very prospect with some other friends with kids about the same age.

      We buy a circa 100-150 acre place (you would pick up something like that near Geelong for 1.5-2 million, we get a few people in on the act and build the requisite number of places – maybe 4-5, and continue to farm the rest.

      Theres a few interested.

  11. In the recent local body elections in NZ, I noticed nil media coverage for the “Affordable NZ” Party. Yet their candidate for the Auckland Mayoralty, Stephen Berry, placed third in the election. Although he was a distant third, the even more distant fifth placed guy, John Minto, a rabid rent-a-mob lefty from way back, received abundant media coverage for his completely loony ideas.

    Says a lot, I reckon.

    Add to this, that the mainstream media has never uttered a murmur about the disgraceful hypocrisy of their favourite, the incumbent and election winner, Len Brown. He is now embroiled in a scandal regarding marital infidelity and “undue influence” regarding his mistress’s career.

    But consider this, never mentioned by the MSM: Brown runs on a platform of “compact city” urban planning, massive investment in commuter rail infrastructure, and an end to road spending. But he lives in a mansion on 1 acre of section; the general location of which has been conveniently skirted by about 1 km on either side, by the new zonings for intensification.

    Plus; there are exactly two road expansion projects that Brown has always supported: both involve improved access regarding the location of his own home, in one case to the highway south from Auckland; and in the other, to the CBD. But voters generally have remained blissfully unaware of these facts that should be quite inconvenient for the rank hypocrite if known.

  12. May I suggest we start a petition here
    http://www.change.org/en-AU

    Some of you may be familiar with the Save the NBN petition that attracted huge support and media coverage.

    It would be great to see a well articulated housing policy that outlines the current problems and their long term effects (capital misallocation, generational wealth transfer, loss of competitiveness, etc).
    And also to see a list of solutions that may include MP policies and supply side reforms.
    I’m sure Leith could put together something.

    Would be great to then get some broader support for the plans from the likes of Catherine Cashmore and Saul Eslake.

    Just a thought.

    • This is the problem. Nobody will see you online. Organising a public protest would have media attention.

      Happiness = Reality – Expectations

      So you change the reality or lower your expectations!

      • I agree we need to get better at street protests.

        But don’t underestimate the power of online activism 🙂

        For starters we need to draw more attention to the issue. Some media coverage would help and then political pressure.

  13. Count me in for non-violent street protests, an online petition and whatever else we can think of that will make a difference…

  14. Concerned Adult

    Emess, thank you for your clarity. You are my hero on this board and I add my voice to yours.

    I would add to those advocating for harsh inter-generational destruction: Do you love your parents? Your grandparents? Did you observe how hard they worked to create a thing of beauty in their loving and cared-for family? Often despite great odds and work/social upheaval. Did you feel our hearts filled by our children, and our striving to enrich these young lives? How will you repay this?

    I paid for my own undergraduate and masters degrees, poured myself into intellectually demanding long-term positions and projects, and came home to create a warm and healthy family home. All my heart’s desire, yet an deeply exhausting reality.

    My son works hard, but he got his start using far greater resources in place than I enjoyed. And he now builds upon the shoulders of his parents’ and grandparents’ generations . . . who were not mega Wall Street investors, just good kind intelligent decent loving people.

    Also, most of us did not learn to shoot; therefore will not be prepared to defend the nursing home against an extremely entitled younger generation. Can we count on your protection when we need it?

    Examine your ethics, life philosophy, religion or spirituality. Live from a place of integrity and in such a way that when you are in your 40’s and 50’s, and beyond, you can hold your head high. This takes thought and commitment. Please do not discount the importance of it. Your anger and desire for easy fixes can easily lead you far astray from the person you really want to become.

    Consider ethics and fair dealing or you run a serious risk of becoming a far worse person/citizen than most of whom you severely criticize here. Most of whom quietly lived from a firm commitment to ‘be part of the solution, and not part of the problem’.

    Will you work toward wise change which balances many complex issues? Perhaps your obvious anger precludes any such considerations and clouds your judgement.

    The poster who shifted the focus from (1) ignorant inter-generational warfare to issues surrounding (2) wealth inequity and (3) demonstrable personal contributions has done a service here. I would add to this attention to impeccable personal standards. Aim high, then you can value the person you become and the circumstances you personally create – NOT won at the expense of others who worked very hard for the possibility of a secure retirement . . . something we never could feel assured of throughout the upheavals of our work/social lives.

    Can we never rest? For youth and its natural strength to disrupt or destroy gains earned through work, decency and hard-won accomplishment – once we are old and vulnerable – is patently wrong.

    Fortunately, most young people I speak with one-on-one are decent, thinking, and seemingly fair individuals. I rely on their prevalent voice.

    • Of course we love our boomer parents and enjoyed the generosity that in the midst of showering on themselves they also showered upon their children (to greater or lesser extents).

      But it is very easy to be generous when you are doing so with someone else’s money, and then leave the room for the next person to pick up the tab.

      Yes our achievements are built on the shoulders of the previous generations, but in a period where the only evolution that we’re doing as a species is in terms of our culture, why should be be any more grateful for supposed cultural advancements, than we are for being born with opposable thumbs?

      Besides, what good are the advancements, such as increasing the liberation of women in the work force that supposedly allows them the choice as to whether to work or stay at home and raise a family, when you simultaneously deploy economic policies that effectively compel the next generation of women into having to work? All you have effectively done is swap one form of repression for another.

      A true measure of how justly one generation treats the next is the state is hands over the nations stock of assets and institutions to the next, and in this regard it is my opinion (shared by many others) that the boomers have done a woeful job.

      To use a well worn analogy, the boomers were handed a well managed tidy economy, with good infrastructure and relatively low levels of debt, by their parents, our grandparents, and then set about performing a gigantic leverage buy out over the whole lot. The loaded it up to the eyeballs on debt, gave themselves excessive perks and privileges, and eroded its revenue streams by selling off the assets and denuding its tax bases. Finally, nearing retirement, they effectively granted themselves massive severance packages, the likes of which would even cause Enron executives to blush, and expect to sail off into the sunset with everyone marvelling at their good deeds!

      I bare Emess no emnity other than that that he has shown towards me, both here and in regards to comments on other threads (arguably stalking me – a form of online bullying too if I am not mistaken).

      Don’t mistake the tone with which I respond to Emess’s jibes as my stock standard attitude to all boomers. There are a great many other people who I have engaged with both here on MB and other forums, where the conversation remains civil and constructive. I do have faults, and one of them is a determination not to back down in the face of aggression, preparedness to escalate responses when the tone and civility directed towards me has also been diminished.