Caitlyn Gaugler- "Sponging Boomers"

Prior to social reform brought on by Word War II changing the dynamics of domestics of the USA, the concept of battle of the sexes when it came to jobs was not unusual. Now, almost 50 years later, the US is pulled into a similar social struggle, but this time, it’s between the Baby Boomer generation and the generations which followed. So, what’s so troublesome about the generation of aging baby-boomers? Their retirement may bring economic growth to a screeching halt.

In the mid-1960s, the baby boomers became a generation so large that they accounted for 41% of the total population, thus forming an entity large enough to exert both political and economic gravity. In their beguiled lives, they have enjoyed low taxes, excellent education, and were able to easily top previous generations in income earned at an early age. All of these distinctions, however, came with a big bill for younger generations. With retirements off-setting the earlier labor-force surge, the ability to educate current generations has become increasingly difficult and less profitable. Paired with the continual battle in Congress, the boomer generation has expanded the deficits by voting on benefits with inadequate premiums.  To make things brief, the boomers are leaving behind a bill much larger than the amount they've ever paid in taxes.

There are several proposed options:
1. Faster growth
2. Austerity
3. Inflation

           Faster growth would offset the debt left by the boomers, but increase unemployment due to the already existing slow recovery of the economy. The labor force is slow to expand anyways.

Austerity is another option, but the consolidation would be immense. With existing fiscal imbalance, this would require up to 35% cuts in transfer payments and 35% rise in all taxes—something neither generations would like to see with an already shaky economy.

Inflation—as disdained as it is—could potentially reduce household debts faster, but it’s a hard plan to sell. With younger generations typically existing as debtors who would like to see interest rates fall on their debts while the boomers would prefer to see interest rates increase on their savings, there’s a conflict of interests. Inflation could act as a wealth redistributor yet pressure on the Fed for expansionary measures continues to benefit the boomers.

So, what are we to do? With the shift in voting demographics, the boomers will continue to have a strong-hold in Congress in which they have the ability to continue to vote for benefits for themselves, but the deficits which come from these benefits is strangling future economic growth. A tax hike to accommodate incurred debts could potentially cave an already creaky system, but a cut in transfer payments would decrease perks to the boomers. The most appealing of options is surprisingly inflation which would drive down interest rates on debts and potentially encourage private investing to pick-up once again. Regardless, the US is looking at a set-back in GDP which is undesirable from either side of the age spectrum. In my personal opinion, it’s time to stop appeasing a past generation who enjoyed many “free lunches.”

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