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
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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.