Today’s young graduates are not only the most heavily indebted in history, but also the least likely to be able to pay their debts. Median wages have been going down since these graduates were about five years old… So have economic growth rates.
Eventually, there is not enough new money coming into the system to meet social security’s obligations. This point was reached in the US system in 2010. Since then, the system has been running an annual deficit.
You’ll see why in the chart showing the retirement-age population.
We focused on the economy. We might just as well have looked at education, health care, human liberty, safety, politics or war. Almost everywhere you look things appear to be degrading. We are less rich, less free, less safe and probably less smart than we were 15 years ago.
There are more than 100 million people in some kind of federal welfare program, 64 million on Social Security, 54 million on Medicare and 70 million on Medicaid.
Just when debt-addicted American companies were starting to worry that Federal Reserve Chair Janet Yellen was going to take their proverbial punch bowl away, along came Mario Draghi.
The European Central Bank president has made borrowing so cheap in the region that foreign corporations are selling record amounts of debt.
Since the 21st century began, the average US household has lost income. Why has this happened? One answer we proposed to readers of our new monthly publication, The Bill Bonner Letter, was that three of the leading economic zones – the US, Europe and Japan – have come to be dominated by old people.
Each year, Americans collectively leave billions of dollars in Social Security benefits on the table.
And you could be missing out on thousands… maybe even tens of thousands… of dollars in guaranteed Social Security income.
First, because debt is higher today than it was then. Six years ago, the official public debt in the US was under $10 trillion. Now, it’s about $18 trillion. Total debt is higher too – about $50 trillion in 2007; it’s now closer to $60 trillion.
In the U.S., older voters control both political parties. They control most major corporations. They dominate all major industries. They have their pensions… their health care programs… their stocks… their bonds… their place in the sun.
All over the developed world, the policies that failed are not being thrown out; they’re being stepped up. Stupid. We recognize that our views sometimes seem contradictory. For example, we see central banks pushing up stocks. But we still advise readers to get out.