In the aftermath of Charlottesville and all the hate we’ve been receiving from the people we’re trying to help, it’s useful to keep in mind that the system they’ve been brainwashed into defending will overcome itself. This peak degeneracy and leftist insanity will be complemented by an unprecedented financial failure with profound social and political implications. Our parent’s generation (the irony is rich) will be what unintentionally brings it down.
The term “baby boomer” applies to those born from the end of WW2 to 1964. During this time, there was a huge increase in population as traditional values, lack of birth control, and a thriving economy propelled optimistic and prosperous white Americans to reproduce in large numbers. Roughly 76 million of them were born. Of that population, around 65 million are still alive. Immigration brings the total to around 80 million people. Around 10,000 of them are retiring every day. Most are compelled to retire by age 70.5. Once a person reaches that age, the IRS requires them to withdraw at least 5% of the value of their retirement plans such as IRAs or 401(k)s. Pew research found that 1.5 million Americans reached the age of 70 last year, a trend that will continue for the next 15 years.
Public Pensions Are Wildly Underfunded
Many boomers are depending on pensions from state and local governments. Unfortunately, these plans will be unable to deliver on what they promised. Naturally, the failure is currently commencing in blue states such as Illinois and California, and will ensue in red states later on. The question isn’t if, just when.
The failure of these plans is inevitable for three reasons. The first is that they’ve been deliberately underfunded by grossly overestimating the rate of return on investments. Underfunding costly pensions enables states to temporarily maintain the illusion of balanced budgets. A massive crisis later (hopefully when you’re out of office) is always preferable to the risk of losing now by raising taxes or cutting spending. This is the nature of politicians.
The second is that fund managers favor purchasing public debt. Government bonds are considered safe and have predictable yields over a defined period of years, making them ideal for pension plans. Thus, along with Social Security, they own around 50% of the national debt. The problem is that government debt is now so high that only minuscule interest rates are possible or else debt service would render many governments insolvent. This is the toxic relationship: Pension plans need healthy returns on their government bonds (5-8%), but they can’t get them without bankrupting their own deeply indebted governments.
Third, there will simply be too many retirees taking from the systems to be supported by the younger workers paying into them. We can’t subsidize our own parents, let alone the Coalition of the Ascendant brought into displace us. Pensions were always envisioned as being a means for a smaller number of elderly to be supported by a much larger pool of young contributors. That’s not going to be the situation in the future. This reason alone guarantees failure at some point, even if reasons one and two didn’t exist.
Private Savings Are Woefully Inadequate
Less than half of boomers have actually saved anything for their retirements. Those who did have generally worked in the private sector without a traditional pension plan. This is the first generation relying on individually funded retirements through IRAs or 401(k)s. As with public pensions, many of these will be totally inadequate. It’s hard to quantify precisely, because a small group has saved a lot while it seems that a larger group hasn’t saved nearly enough. As with public pensions, toxic relationships will come into play: Boomers will need to sell at least 5% of the value of most private plans each year. This enormous volume of retirees annually dumping equities onto the market will lower the prices of equities, thus lowering the value of the plans they need to survive on. This may lead many to sell their homes for more affordable accommodations. This will lead to a stiff decline in home prices, thus reducing the value they can get out of their homes.
There’s Always Social Security, Right?
As private, state, and local pensions fail, many will look to the federal government in the hope that Social Security payments would allow them to at least survive at a subsistence level. The reality is that worker contributions were exceeded by payments to retirees back in 2010, and it’s only going to get much worse. Last year the program (disability payments included) already cost around 950 billion, nearly a quarter of the federal budget. Each year, it runs a deficit of around 75 billion dollars, which will mount steadily as more and more boomers retire. Don’t look for any cuts because boomers are the pivotal voting bloc. Once more, a toxic relationship is at play. As the government continues to rack up debt in order to cover shortfalls such as SS, the massive cost of debt service grows, thus eating up more revenues that could have been used to prop up the program. The program itself owns around 3 trillion worth of the national debt, which it is depending on for full repayment. Medicare is a comparable nightmare, which I’m skipping over for the sake of brevity.
Consumption Will Sharply Contract
When a person retires, their income is reduced and their spending decreases. For people depending on private savings, this phenomenon is most dramatic. They have no idea how long they will live, thus no way to accurately predict how many years they can live off their dwindling savings. Thus, they sharply curtail non-essential spending. As the enormous demographic of retired boomers find themselves in this situation (particularly since they will be forced to rely on SS), American business will suffer a nasty decline in customers. This will further exacerbate economic woes induced by diversity, huge debt, and declining white reproduction.
Bailouts Spell Disaster
As the crisis begins to set in, the Federal government may seek to bail out individual public programs based on political expediency. This will prop them up in the short term, but only delay the inevitable. It’s possible that this could be attempted on a national, comprehensive scale. Our national debt stands at nearly 20 trillion, increasing by roughly 1 trillion each year. Debt service already eats 6% of the budget, even though interest rates are below 2%. There isn’t a defined limit on how much debt the US can take on, but doubling or tripling the debt just for pension bailouts would eventually push us over the invisible line of confidence. Nobody is sure where it is, but it’s out there. After it’s crossed, a debt crisis will ensue. This is especially serious for retirees since SS and pension funds own so much sovereign debt.
What If There’s a Market Crash?
In 2008, governments and central banks were able to avert a depression and the failure of every major bank by borrowing trillions to bail them out, slashing interest rates to zero, and creating money to buy up trillions more in assets to artificially keep prices high. This was a temporary fix (they’re still doing it) that has set the stage for a bigger calamity in the future. When the next crash inexorably arrives, they will be unable to employ this strategy a second time.
This could happen in 2 years or 2 days but it will eventually occur. As before every crisis, the dominoes are in place. What tips them over and when is unknown. It could just as easily start in Europe as the US. The consequences will be as unprecedented as they are profound. In the very least, many retirees will see the value of the pensions and private plans they depend on plummet. The ability to fund SS will also come under pressure. Many people will feel desperate and cheated, with nothing to lose. Rocky times are ahead.
Why is this Never Talked About?
I really doubt that rising presidential hopefuls like Kamala Harris or Cory Booker even understand compound interest to the point where they could perform a simple calculation. Many others understand that this issue is a real downer. “MAGA” or “I’m with her” sound much better than “You’re screwed and I have no solution”. The MSM is reluctant to discuss it because underfunded pensions implicitly call into question the wisdom of gibs and expensive 3rd world population transfers. However, the Alt-Right should be focused on it. We’ve grown exasperated watching the latest Islamic atrocity or chimpout fail to move the needle. The sheep must be impoverished in order to become receptive to reality. Cheer up. Angry, destitute retirees are our army of White Walkers waiting to bring a rotten, unsuspecting world to an end.
-By Tom Shackleford