If WE saw it, why did the millionaire "experts" not see it?

[SoCalDem]

SoCalDem Donating Member (1000+ posts) Fri Jun-20-08 12:29 PM

Original message

The 101-k IMPLOSION (not a typo) will the the next big shoe to drop..

Fret not!.. The plan will soon be fully implemented..

A whole generation... and maybe a whole country, will bear the brunt.

Boomers (not the "rich" ones) have spent their entire lives being an "experiment".


We were the perfect lab-rats. There were just so damned many of us. We were the first to get mass-inoculations with vaccines.

Madison Avenue boomed by marketing to us.

We were the first to test out new teaching theories..

We matured at just the perfect time in history for a real push to start destroying unions, and ushering in lowered-expectations in the workplace.

Lowered wages, meant that the opportunity existed for the "plastic-generation" to be born, as well. Less wages, combined with massive competition for jobs , while being exposed to the biggest dose of advertising for "the good life", made credit cards oh sooooo desirable...

Once hooked on credit, it was a logical step to encourage home-ownership, at any cost. Cities & towns had no interest in keeping a generation within their economic means.. America has always been about reaching for the stars..going for the gusto..taking more more more..

Home ownership had always been about paying OFF a home that you would live out your life in, but Boomers were a mobile bunch, and it did not take banks long to figure out that they could make more by creating a series of "transactions", and reaping profits on the transactions, not the long-term relationship between mortgagor-mortgagee..

It was very linear too.. Plastic cards piled on debt, and equity from homes periodically "paid down" those cards. Limits increased, and the spending resumed.

As more and more people saw their peers living the good life, they too wanted "in".

Long term planning for Boomers rarely included pensions, so a "new" product had to evolve.. The 401-k was a clever way to make MOST people "stockholders", and then keep them interested in things they had little knowledge of, but now had to start caring about..market-share..productivity.. market opens..market closes.. bond markets..money markets..

All that glorious wealth awaited them, and for only 4-8% out of their wages every paycheck.. A "raise" was met with an increased automatic deduction, and usually an increase in employee share of health insurance cost. So , for the lucky ones who got raises and had health insurance, they rarely ever saw any "real" extra money to spend. But that quarterly statement told them that they were getting "rich"..who needed a boring old pension that was 25 years away... and the equity in the house was always there to tap when the plastic spending got out of hand..

Companies did not "have" to raise our wages..we had equity & plastic available, to live the American Dream when wages could not deliver it.

We did what was expected of us.. We shopped until we dropped..and many, if not most of us have dropped.. We are approaching "retirement" age, with more obligations than we started with.

Our parents (and some younger boomers still have living grandparents) are relying on us for aid, our 30-something children have often been unable to get their "adult lives" started, due to crushing school debt and high living costs, and those pensions-buy-outs/switched to 401-ks are looking pretty anemic.

The job market that was inundated BY us when we matured, is now casting us off like used kleenex, so even if many WANTED to/NEEDED to work well past retirement ages, the jobs themselves are no longer around.. The jobs that may still exist for many, are the SAME jobs that the kids & grandkids are grabbing up as 2nd & 3rd jobs so THEY can buy food & gas up their cars.

For every person who praises the "go-getter" nature of a 60 or 70-something out there shagging grocery carts, there are many more who see this as a symptom of a nightmare scenario, unfolding before their very eyes.


For the Boomers who have managed to hold onto equity, and who have avoided the credit card trap, they will soon be trading in the house for medical care in their old age, since their own children may be unable to help them financially, so the circle is closing, folks..

People who spent a lifetime, paying off a house, so they could live out their years, and pass it on to their children, are now facing the harsh reality, that after "deductions" are taken from their Social Security, there is not enough left to live on, and that 101-K is not enough to make up the difference..and that $8 an hour job is not enough either..

They will downsize to make ends meet, but in the end, they may be penniless, and scrambling to find their next meal, and doing without medicine.

Magazines, tv shows & newspapers will always brag about the people who DID "get rich" from their astute management of their 401-ks, but those folks are NOT the norm.

A look at this ARTICLE
kind of spells out the problem. That "deferred" income, even WITH some participation from an employer will NOT ensure a comfy retirement..unless you only plan on living a few years after you stop working..and never get sick.

The money-whizzes tell us that the market is so HUGE and so MAGNIFICENT, and with globalization, when boomers start TAKING instead of contributing, the markets will be just fine..BUT..when have they been right lately?

It seems to me, that they have been dead wrong about just about everything they predicted..for at least 20 years or so.

....edited to add...

and now the houses are practically worthless as Boomers start to think of downsizing. The lucky ones will have paid off their home, and might be able to take in friends & relatives to help with the sure-to-rise property taxes & cost of energy to heat & cool the place. the not so lucky ones who still owe money on their home, may be able to get out of it, but not with enough to buy that smaller place outright, so after a lifetime of keeping a place up, they end up as renters, in the twilight of their lives.


>>>>>>>>>>>>>>>>>>. and then there's this>>>>>>>>>
"...Of particular concern is what happens with the more than $2 trillion in consumer debt..."