VIDEO: Demographics – The West’s age distribution is too lopsided to support entitlements

When Americas social security and health care and entitlement systems were first conceived, the country has much different age distribution. There were roughly 7 active workers per retiree, and the ability to transfer some of that employee wealth to support older citizens was supportable.

But with the arrival on the scene of the Baby Boom as well as advances in longetivity, the math changed dramatically. By 2005, there were only 5 workers per retiree. And by 2030, just 15 short years away, there will be less than 3.

Our national demographic architecture no longer can afford the entitlement system we have. And that’s even assuming entitlements were currently sufficiently funded. But as the last chapter showed, the existing programs are underfunded to the tune of $100-200 Trillion.

America’s demographic situation is a ticking time bomb. The older generation is already competing more fiercely than ever with younger ones in the job market, as many seniors can’t afford to retire. Youth also has to contend with trends like automation, outsourcing, and high unemployment/underemployment, which further handicap their ability to build capital and, importantly, to afford all the assets (stocks, houses, etc) that the Boomers are counting on selling to them.

For the best viewing experience, watch the above video in hi-definition (HD) and in expanded screen mode


Coming next Friday: Chapter 16: A National Failure To Save & Invest

For those who simply don’t want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to PeakProsperity.com. The entire full new series, all 27 chapters of it, is available — now– to our enrolled users.

The full suite of chapters in this new Crash Course series can be found at www.peakprosperity.com/crashcourse

And for those who have yet to view it, be sure to watch the ‘Accelerated’ Crash Course — the under-1-hour condensation of the new 4.5-hour series. It’s a great vehicle for introducing new eyes to this material.

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  • Bev

    For the Good of All Generations See: The AMI (The American Monetary Institute) conference is less than 1 WEEK away (people from Peak Prosperity should attend) and features Michael Hudson, Steve Keen, Kaoru Yamaguchi, Joseph Huber among others. We need the debt-free money to fix our economies, jobs, and urgently to attempt to reduce the terrible damage of Fukushima, WIPP and to reverse Climate Change. These projects will take many generations and huge money to engineer.

    http://www.monetary.org/2014schedule.html

    The American Monetary Institute announces its 10th Annual AMI Monetary Reform Conference
    October 2 – 5, 2014 at University Center in downtown Chicago
    Register by Phone at 224-805-2200
    Register by e-mail at ami@taconic.net

    (see below: huge discounts for Students & Teachers, If finances are making it hard for you to attend our Conference, let me
    know (by phone or email) and we’ll work it out together.)

    http://www.monetary.org/2014-conference

    Dear Friends of the American Monetary Institute,

    We proudly announce our tenth annual AMI Monetary Reform Conference, and bring together some of the world’s most serious advocates of real and achievable monetary reforms.

    The banking disaster, created and facilitated by false economic and monetary ideas, used by some very bad people, actually poses a real danger to the survival of the species. We must transform the ongoing disaster into an opportunity to achieve real and lasting monetary reforms for mankind. These are the reforms indicated as necessary by decades of study and centuries of experience.

    Regular working people understand that a moral approach is needed to lead to a future
    worthy of humanity. Around the world they are way ahead of their leadership, which ignores moral considerations, seeming to rely on media dominance to hold onto undeserved privileges for a tiny minority of the population. But clearly, in order for the financial crisis to have occurred, thousands of financiers had to break our nation’s very serious laws; and yet not a single one of them has been charged for those crimes.

    The main cause of the problem is using debt in place of money when the banks make loans, as our present system does. That single error, promoted by those really trying to block monetary reform, and by some economics professors trying to keep their salary checks coming, is all it takes to wreck any monetary system, and begin the insane concentration of wealth, into exactly the wrong hands, as we now see in our society! The conference shows why money must be created by our government and spent into circulation on infrastructure, healthcare, and education. The conference highlights recent important moves in that direction by key people, and institutions, around the world.

    We have a once in several generations opportunity to fix an obviously flawed money system that is causing so much pain and hardship among a growing section of our people. It is clearly time to fix our monetary and banking system! Come and find out how, and the role you can play in that process.

    In addition to top notch “real monetary reform” speakers, we’ll focus on some important themes:

    The Student Debt Crisis

    This tragedy has the potential to wreck the lives of an entire generation of young people! That would wreck our nation. We are not going to let that happen – we are going to look at adjusting Kucinich’s N.E.E.D. Act ever so slightly so that it will forgive all student debt. The Act as written already pays for education – adjustments will be discussed to also make that retroactive. Sounds unbelievable? This conference will look at that question in complete detail.

    Remember how Students demonstrated against the Viet Nam War? They didn’t want to be drafted and killed. The student debt question can have a similar effect. We can imagine an army of young people(and their parents!) who will promote monetary reform, and force Congress to end their student debt.

    We made a special effort to bring students into the conference and offered them scholarships at only $49 to attend the whole conference. Several are doing this, and we are looking forward to helping get them started on monetary reform. They are able to stay at the HI Youth Hostel across the street from University Center, at $35 a night, after arriving in Chicago inexpensively on Megabus! Please help finance this by donating to the American Monetary Institute. Believe me if students (and their parents) are in serious debt and not seriously employed, their outlook is bleak.

    And Teachers Are in Trouble Too

    Not only in Chicago, but around the country Teachers are under attack, because they are still making a living wage, and that’s no longer allowed; and their earned pensions are threatened. Remember the Chicago Teacher’s Union supports Kucinich’s N.E.E.D. Act. We are making a special effort to bring in teachers to this conference. If telling people about monetary reform is an educational task, who better to help us do that than the professional educators? Please help spread the word among teachers.

    And What About You? We’d like you to consider attending this conference. There is very little time left to make all the arrangements. And the registration fee has been kept low for a long time but must
    now rise to the full $395 level. SO Think, and Act NOW! If you can’t come, please make a donation to help us offer those student scholarships at only $49! Click a donate button at our homepage http://www.monetary.org.

    And one more thing!: The sequester and austerity gang are really trying to do damage to our people
    and others around the world. They are operating under cover of pretending they don’t understand how destructive and evil their actions are – pretending to be trying to do good for the country. Folks – Don’t buy that “cover story” for a minute. They know exactly the damage they are doing! If finances are making it hard for you to attend our Conference, let me know (by phone or email) and we’ll work it out together.

    We won’t be stopped by such maneuvers! Do not be afraid – and remember “Action dispels fear.”

    Thanks and Warm regards, Hoping to see you in October!

    Warm regards,
    Stephen Zarlenga
    Director, AMI

    Click here for mail-in order form

    Register by phone at 224-805-2200

    Register by e-mail at ami@taconic.net

    Mail registrations to The American Monetary Institute

    P.O. Box 601, Valatie, NY 12184
    ………………………..

    http://www.monetary.org/getting-what-we-need/2014/04

    What do we want?

    Decent lives for ourselves, our families, our friends, our neighbors–for all of us.
    snip

    An end to debt slavery–student debt, underwater mortgages and out of control credit card debt, when being late on one payment can jack your interest rate to 25-30%. Of course, it is easy to miss a payment when we live with an economic system that is incapable of providing jobs for all its people. And so many of the jobs that we can get now only pay about half of what life’s basic necessities cost.

    Put the 9 million American families that have been either foreclosed and torn from their homes or are in the process of foreclosure back into homes.

    A clean, sustainable environment–transitioning from energy that pollutes air, water, soil and threatens future human life on earth as we know it to renewable alternatives. With the Fukushima nuclear disaster as an example of the inability to safely contain nuclear energy and waste, we can be assured that nuclear energy and bombs for that matter are anathema to human life and peace of mind.

    An end to U.S. militarism, war and empire–in service not to the American people, but rather to the military/industrial/Congressional/banking complex.

    These are all things that we want, but as the song says “You can’t always get what you want.” Why? In our present monetary system there is never any money for these and other programs that would actually benefit the people.

    “But if you try sometime

    You just might find

    You get what you need.”

    Bringing the voices of peace, anti war, anti nuclear, environmental, Fight for $15, anti foreclosure, labor, debt jubilee, universal basic income, national healthcare, Social Security, Medicare, anti racist, LGBT activists, etc together in one voice, committed to struggle, we can get what we need.

    And what we need is The NEED Act!

    http://www.monetary.org/wp-content/uploads/2013/01/HR-2990.pdf

    Meanwhile, our legislators from both political parties are hopelessly frozen within a debt money paradigm, unable to provide the things that we need and want for our society and the health of our mother earth because they can’t borrow anymore and they can’t tax anymore. It’s up to us to tell them that we will no longer accept austerity. America needs The NEED Act!

  • jadan

    Your world view is going to hit the wall, Chris, no doubt about it. So why don’t you change it? Why not have a closer look at the antique financial model you inherited from Alexander Hamilton, and try to imagine a monetary system in which the currency does not represent debt? Mull that over and realize that we are not condemned from birth to spend our entire lives working to pay off bondholders. You know what would happen to this economy if social security were eliminated? It would collapse into a heap of wretchedness and despair. We can do what Alexander Hamilton failed to do: use a little imagination and focus on the public interest not merely the interest of wealthy creditors. Our government has the sovereign right and obligation to create and manage its own money. We don’t need to borrow from the rich. There are alternatives to your vulture capitalist world view. Monetary reform represented by the American Monetary Institute is such an alternative….so STFU!

    • wunsacon

      >> … so STFU!

      Why??? Why end your paragraph with a crass insult as a rhetorical flourish?

      Have you observed Chris Martenson’s work product (such as his “Crash Course” videos)? Even if you think Chris is wrong in some ways, he puts out top-notch quality work. Personally, I think that entitles him to more respect than “STFU”.

      • jadan

        It’s just anger & frustration. I don’t respect this fellow’s point of view. He has no imagination. He’s recycling old crap. The “demographic problem” is a problem for our privatized monetary system. A person capable of understanding a public monetary system would view social security is a different way. “Demographics” would not be a problem. Martenson could not conceive social security in another way. He regurgitates establishment thinking and in his own tedious fashion, he’s supporting the Fed and the privatized model put in place by Alex Hamilton in the days of yore. What I’m saying is that we need a revolution in our monetary system. Unless we have fundamental monetary reform, all the voices crying doom & gloom out there will be proven correct. We had revolutionary legislation put forward by Dennis Kucinich in his HR2990 in the last Congress. A very radical change in our monetary system would prevent huge suffering. It’s the only way to avoid smashing into the wall.

  • SweetHeat

    One of the most bizarre things about ObamaCare, is that it was based on Medicare, which was a program targeted for a segment of the population, not the entire country. It’s clear and evident, even though they would deny it, but the government agency that wrote and currently run and implemented Obamacare was the Medicare and Medicaid office of HHS. So the main fault od the design is the base population it started with at its base core. so faulty logic, it can never work based on the assumption they started with. Yet the dummies keep claiming success and quote Medicare part d did not work initially bla bla bla. The liberal left also falsely blame Romney care in MA as the building block, when Romney care was not based falsely on Medicare, yet ObamaCare was. It’s just so disturbing because at the end of the day, Americans who are not covered by government supplied free insurance, cannot afford the deductibles, copays, and premiums. It is simply a non sustaining business model despite the SCOTUS claim it was a legal tax. It does not make it affordable. At face value, medicare did not cover pregnancy or abortion. So the fact that Obama care forced those coverages is unbelievably morally bankrupt in terms of fiduciary responsible.

  • Voice of Reason

    What’s flawed here with both the post and the comments is the focus on money. If instead of being spent on pointless wars and tax cuts for the 0.0001%, the money extracted from working Americans was invested in educating health care and other professionals and equipping them to provide the products and services Baby Boomers – and everyone else – either need now or are going to need, money (debt-based or otherwise) wouldn’t matter that much.

    What is important is not so much the way money is created as the purposes for which it is used. Money invested in using the world’s dwindling resources more efficiently can even pay a little dividend to financial parasites – or the rest of us taught to save so we can live off our capital if not our interest. The problem here is that we have all been taught to think of money as wealth. It is not; money IS debt. For the last century the West has – very successfully! – been focused on producing more debt, not more wealth. In fact, whenever one of the so-called Industrial Democracies began producing too much wealth, the powers that be became hell-bent on getting that wealth out of the country by exporting it to foreign markets, loaning it or simply using it to blow up competitors in the debt-creation race. The problem here is that genuinely wealthy people don’t need money, debt-based or otherwise.

    “So that it comes about that by far the great part of what the modern world regards as wealth, and what is a perennial source of wealth to individuals, is not wealth but a consequence of lending or having lent wealth, and is in fact a form of national or communal debt. The intense competition for foreign or overseas markets in time of peace, aggravated by the home market drying up through the loss of purchasing power of the unemployed, is not due to any altruistic or missionary spirit of the industrialised nations in wishing to unload of their abundance for the enrichment of the newer and less
    industrialised nations, but to the necessity of finding new debtors, with good future prospects of being able to pay interest, to whom to lend their wealth. The prospects and capacity of those at home in this respect diminish steadily as the days go by.

    … The glut of wealth, that in time of peace cannot be profitably exchanged, is now owed for as it is produced by the nations as such Along with the flower of the country’s manhood, it is destroyed as rapidly as the most powerful modern engines of destruction allow. The dead do not return, but the wealth destroyed discards its corruptible body to take on an incorruptible. It, is national debt, better than wealth to individuals, a permanent source of wealth, defying the passage of time and the ravages of rats and worms.”

    MONEY versus MAN: A STATEMENT OF THE WORLD PROBLEM FROM THE STANDPOINT OF THE NEW ECONOMICS
    FREDERICK SODDY, London : E. Mathews & Marrot, 1931, pp. 27-28

    • jadan

      The issue is money, not the allocation of it. There are two types of money: private money and money as a public
      utility money. The Federal Reserve Note is private money. The Greenback
      issued during the Lincoln Admn was public utility money. Private money
      is debt. It is borrowed from the wealthy by government and spent into
      circulation. The cost of this money is a tax and adds to the ever
      growing national debt. Public money is free money, like coins, and no
      debt is required to get it into circulation. The allocation of money in a
      private money system is determined by the “market”, a fantasy construct
      that serves the interests of the creditor class. Public money is
      allocated by rational policies determined by representative governments.
      In a public money system, social security is not funded by debt. It
      becomes one of the ways government spends money into circulation. It
      does not pay its own way, so to speak, like a business because it was
      never funded by debt. The point is that you cannot allocate private
      money. The allocation is always determined by the rich, the ultimate
      creditors, who invoke the “market” when they want to put your
      grandmother out of her home.. Public money is a different ball game
      altogether. It’s not a game the US, since it became a sovereign nation,
      has ever played. That is why it is so little understood. But when money is understood it becomes a revelation. The rich understand money which is why they own and control the world. Your average person does not.

      • Voice of Reason

        If people like you don’t get it, there is little hope. THE issue is the allocation of society’s wealth. If money is used to allocate and distribute that wealth, then yes you have to come up with a monetary system that accomplishes those purposes in a sustainable manner. Money is above all else a medium of circulation. If you buy into the idea that it should be able to ‘store value’ any longer than necessary to facilitate the production of real wealth, then you buy into the status quo with all its wars and waste – all so that people with more wealth than they could ever use can continue to ‘store (ever more) value’. Their 0.0001%’s ‘value’ is YOUR or your children’s debt. The rich may understand money but they apparently don’t have a clue what real wealth is, how it is produced and what they are going to have to have if their vast sums of money are going to be worth a plug nickel. It is just like Oscar Wilde said “They know the price of everything and the value of nothing.”

        Until you ‘get’ that money is not wealth – and that includes the $20 trillion the Fed has created since 2008, there isn’t a lot of point in continuing the conversation. Both the species of monetary reformers you describe don’t ‘get’ it. They continue to worship a money-based status quo in the vain hope their favored flavor of reform will save the world. It won’t.

        Without some fundamental reforms, without some idea of what constitutes real wealth, how it is produced and how much of it any one generation is entitled to enjoy, our civilization will continue to go as Soddy phrased it “off the rails”.

        (Did you even make a minor attempt to understand what Soddy was saying in the two supplied paragraphs?)

    • ax123man

      “money IS debt”

      How do you come to this conclusion without defining “money”. Are gold coins used prior to the introduction of fiat currency the same as thing fiat? I understand that the federal reserve creates money out of nothing and fractional reserve banking multiplies that creation thru debt issuance. But is that what money is supposed to be? No. Money is nothing more than a medium of exchange. By calling fiat currency money, you are playing into the hands of the same people I assume you despise: that is, elite bankers. Money as a medium of exchange simply makes it easier to trade goods. That is all.

      Money is not debt. Debt is debt. And in fact, with the system we have today the debt you describe here isn’t even really debt as I would define it. Why? Because it’s never paid back. It is continually inflated and will continue to be inflated until it collapses like all fiat. In my mind, a debt is paid back. Simply paying on the interest while the debt grows exponentially is not the same as paying it back.

      “For the last century the West has been focused on producing more debt, not more wealth”

      Yea, sort of. The problem is that keynesian economics thinks you can create wealth by spending, not matter where the source of funds for that spending (so by all means create it out of thin air). They think you can create demand. They treat our economy like an engine that is already fine-tuned and simply needs to be started. Perhaps if liberals would stop fawning over Paul Krugman for 5 minutes and try to understand some basic economics, we could find a solution.

  • dougdiggler

    Nonsense. If we get rid of the contribution limits for Social Security and have no upper limit for rich folks to contribute into the SS general fund, Social Security would be solvent for the next 75 years.

  • If social security is a “ponzi scheme”, then it’s within the BIGGER ponzi scheme of capitalism or “crony capitalism” whatever you want to call it.

    Don’t worry, if social security doesn’t work out, rich people will help their fellow Americans out, like they AREN’T right now. Like they DIDN’T during the great depression. Like they DIDN’T until social security was invented. What was right before social security was invented? Oh, yeah, the great depression. What’s preventing super-rich people from solving these problems in this system where everything was funneled up to them?

  • wunsacon

    Chris’s analysis and theories sound reasonable in a world without “artificial” intelligence. (I use quotes here because intelligence based primarily on digital circuits and carbon atoms is no more “artificial” than ours.) Now, add artificial intelligence in and practically everything changes.

    As just one example, what’s the cost to Medicaire and “taxpayers” when the path to “training a doctor” changes from:
    a. student attends K-12, college, medical school, and residency
    to
    b. add another blade to a server chassis and provision it some working memory
    ?

    With the advent of AI, medical costs are going to plummet. People projecting “medicare will bankrupt us in 20 years” remind me of “generals fighting the last war”. Yes, their theories sound logical and fact-based. Problem is: in the (near) future, the facts are changing.

    With AI, demographics don’t matter. The young won’t be supporting the old. Because they’re far less efficient than AI, the young will simply be unemployable. Along with everyone else.

    At least, that’s the best case. Of course, humans being stupid and all, we can easily screw it up. For instance, are we building machines that are “3-laws safe”? No, it appears we’re building smarter weapons — in an all-out, enduring race for dominance in the Global Protection Racket.

  • Tyler Healey

    Please stop giving this author a platform. He does not understand Monetary Sovereignty.

    He needs to visit mythfighter.com.

  • fred

    What a stupid presumptuous bunch of drivel…..if the program had not been Criminally Robbed it would be solvent….putting damn IOU’s in there while ” appropriating ” the money is the deal, not young people “paying ” for old people……duh

  • ahuxley

    Any article that attempts to address any socioeconomic ailment without a healthy focus on our nefarious banking/currency/financial system is intellectually bankrupt. Virtually every modern socioeconomic woe can be laid at the feet of the global banking oligarchy. Debt-based currency creation, fractional reserve banking and rigged financial markets are the economic-WMDs of the elite. Articles such as this one only foment inter-generational hostility and misplaced blame, while diverting attention away from the machinations of the elite/parasite-class.

    Get a clue, Chris…