The Boomer Tsunami and the Generation Wars

In our last post ("The Impending Generation War"), we alluded to the rising crescendo of Boomer bashing, replete with generational stereotypes of Boomers as selfish and self-absorbed creatures of 1960s hedonism who sold out their counter-culture ideals, became a generation addicted to mass consumption, and spent, borrowed, and defaulted the U.S. economy into its economic predicament.

That argument is purely anecdotal. There is no question that American consumers in general spent too much and saved too little, but I have yet to see any persuasive evidence that Boomers were any more profligate than any other generation -- in particular, that they were any more profligate than the younger generations from whom most charges of Boomer bounderism emanate. The charges may prove to be true -- I just haven't seen them substantiated.

True or not, we expect to see a ratcheting up of intergenerational rhetoric as the United States hits the wall in its ability to borrow its way out of the entitlements crisis. Politics is a zero-sum game. For every winner, there is a loser. When there's not enough money to fulfill all the promises, either Boomer retirees have their lifelong expectations dashed, or younger generations of workers see their payroll taxes increase.

In that context, I find it interesting to read a recent blog post by Boomerologist Carol Orsborn with VibrantNation.com. The word "entitlements," she contends, has negative connotations. But is it helpful to characterize Boomer expectations about their retirement benefits that way? Writes Orsborn:

We concede to let the government withhold a substantial portion of the money we have earned from every single paycheck in exchange for benefits to be paid to us down the road.

I remember the very first time I received a paycheck, when I was in my early 20's. I'd been counting on every penny of my slim salary for living expenses. What a shock to see how much had been taken out for this then too-remote-to-even-conceptualize notion of "retirement." I must admit that on some levels, the amount taken out for Social Security, taxes, healthcare, 401(k)s and God knows what else, has never lost its shock value.

But here's the thing: I may have disliked the chunk of income that went missing from my paycheck every other week. But I never thought to question that grandma and grandpa and later mom and dad weren't deserving of their Social Security benefits. Society acknowledging the reality of physical and mental diminishments that come with age, and taking care of the elderly was the reality within which our generation was raised.

As a Boomer, I'm well aware that the age wave will do to the American social safety net what the Sumatra tsunami did to the coast of Thailand. But Boomers didn't set up the system, and we didn't resist tooth and nail efforts to reform it. Furthermore, we've been paying into the system our entire working lives -- we're not getting the same free ride that the early generations of beneficiaries did. Are Boomer expectations so unreasonable?

The only thing unreasonable about Boomer expectations is that they fly in the face of the irrefutable reality that Uncle Sam can't afford to keep the promises made by an earlier generation of politicians. Something has to give. As part of any entitlement overhaul, Boomers will have to work longer, have benefits curtailed and/or pay more into the system. I think they'll be willing to make those sacrifices. But it sure would help if the Boomer bashers dialed back their rhetoric. Demonizing a single generation won't get us any closer to reform.

Update: Regarding my assertion above that Boomers were no more profligate than any other generation, the McKinsey Global Institute's 2008 study, "Talkin' 'bout My Generation," does say that Boomers spent more of their income at comparable stages of the life cycle than the Silent Generation did. This is undoubtedly true. But McKinsey is silent on the issue of Gen X and the Millennials, whom, I would suggest, were as derelict in salting away savings as the Boomers were.