Joe’s Journal: The Next Generation’s Mountain of Debt

Posted on Jan 22, 2013 | 4 Comments

In the developed countries, the dominant factor in the next society will be something to which most people are only just beginning to pay attention: the rapid growth of the older population and the rapid shrinking of the younger generation. The shrinking of the younger population will cause an even greater upheaval than the growing number of older people, if only because nothing like this has happened since the dying centuries of the Roman Empire.

—Peter F. Drucker

The United States has had a long history of passing on a brighter future to our children and grandchildren. But we are now rapidly passing on enormous debt to the Millennial generation in this country, which is unfair.

The political realities are such that the older generation is either unable or unwilling to help fight the war on entitlements—Social Security and Medicare—and prevent the wave of debt we’re leaving behind. We seem to be in denial and are not paying attention to what is happening to the nanny states of Europe.

Only the most productive European nations— Germany, Switzerland and the Scandinavian countries—are able to come close to supporting their social welfare benefits for retirees.

Sadly, the mountain of debt we’ve created for future generations, with attempts to keep bolstering programs for retirees, is only part of the story. It also has become very difficult for many college graduates today to find suitable employment, and they as a group are carrying the biggest student loan burden of all time.

I borrowed $500 for my undergraduate room and board. Today, carrying a debt burden in the $75,000 to $100,000 range is not uncommon. And in the professions requiring advanced degrees, it is even worse.

Who is speaking out for the younger generation? Where is the political will aimed at relieving this pressure? Certainly younger people are beneficiaries of what previous generations have made available, but they are also paying a heavy price.

It seems inevitable that these mounting tensions will be produce the “upheaval” that Peter Drucker predicted in his book The Unseen Revolution. Perhaps we will see continued public outcry—or even a new political party take root.

—Joe Maciariello

4 Comments

  1. Marion E. Houser III
    January 23, 2013

    none of this is surpring when “the best way to destroy the capitalist system was to
    debauch the currency.” which results in “inflation’s potential to destroy the fabric of society.”

    Excerpts from The Economic Consequences of the Peace by John Maynard Keynes, 1919

    see:
    5. Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly. … Karl, Karl Marx.

    note: Moses had 10 big ideas as well. do the juxtaposition and see which ones are more to your liking. just sayin’.

    Reply
  2. Joshua Lee Henry
    January 25, 2013

    A Millennial myself, I appreciate Joe Maciariello’s sage advice as a senior observer of the current economic climate, and how the poor decisions of previous generations will create either an employment crisis or catalyst for education, fiscal, and perhaps even political reform. I do think the public outcry and dissatisfaction will create the need for a new political party to take root. Western society is at a hinge point in history. No one should be surprised by the rapid shifts in social, economic, and even spiritual values our country will make and is making now.

    Reply
  3. Pam Watson
    January 26, 2013

    Rather than attacking successful programs to protect the elderly in their retirement years, why would we not attack a tax system in which hedge fund managers have bullied Congress into taxing their carried interest at 15% while those of us who earn wages pay 30 and 40 and 50 percent (when state taxes are factored in) ? The level of inequality in this country is at historic levels. To use Obama’s idea, when so few are doing so well and so many are barely getting by, something is not going according to plan.

    Reply
  4. Jeffrey Smyth
    January 26, 2013

    Joe, you get what you pay for. Check the tax rates in Scandinavia.

    Reply

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