• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Chart Of The Day: This Is What "Generational Theft" Looks Like

Tyler Durden's picture


Much has been said about the key aspect of the Ponzi scheme behind America's welfare state (if not enough where it matters as the three living Fed Chairmen currently joke around during the Fed's shindig on the central bank's 100th anniversary), namely that all those who have paid in money to entitlements, are entitled to benefit from entitlement distributions in the future. On paper this is absolutely correct, and in an efficient market, without capital allocation distortions this would work (ignoring that a Ponzi scheme, is, by definition, a Ponzi scheme and is reliant on ever greater inflows of money and participants or, as some may call them, suckers). More importantly, this is also fair. Sadly, as recent experiments within the Obama administration and elsewhere, most notably France, when the entire developed world has hit "peak debt" levels, the fairness doctrine no longer works, especially if and when it is enforced upon a destitute population.

Since we don't live in a paper world, one should be able to quantify the disparity between the "haves" and the "have nots" when it comes to entitlements. This is precisely what Larry Kotlikoff did in August 2013 in "How the millennial generation will pay the price of Washington's paralysis." The results, charted, show what JPM's Michael Cembalest has dubbed, accurately, "generational theft", or the difference between how much excess some Americans will have received in government benefits (the older ones), compared to how great the funding deficit is for others - mostly young Americans, those who are about to graduated from college with record amounts of student loans (on average) and those yet unborn.

Cembalest's summary:

After you graduate, the US will be in the thick of the “generational theft” issue; here’s a heads-up on what this is all about. Generational accounting is an estimate of who benefits from and who pays for government programs. As shown in the first chart, the average person in the generation that turned 65 this year received $327 thousand dollars more in lifetime government benefits than they paid in Federal taxes. On the other hand, children born in the future (e.g., yours) will have a lifetime deficit on this basis of -$421 thousand dollars. If it sounds unfair, it is.

It seems that these days few things are fair. Which is perhaps why the rulers are desperate to do everything in their power to "enforce" their idea of fairness on everyone.

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 12/16/2013 - 15:41 | 4251339 hedgeless_horseman
hedgeless_horseman's picture



I am no technical trader, but it looks to me like therte is plenty support for Bitcoin at $200, then again around $100.

Mon, 12/16/2013 - 15:40 | 4251349 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Wrong thread occured?

Mon, 12/16/2013 - 15:45 | 4251360 hedgeless_horseman
hedgeless_horseman's picture



Wrong thread occured?

Kinda...sorta...but not really...

Which is perhaps why the rulers are desperate to do everything in their power to "enforce" their idea of fairness on everyone.


Mon, 12/16/2013 - 15:52 | 4251396 Richard Chesler
Richard Chesler's picture

To QEnfinity and beyond!


Mon, 12/16/2013 - 16:05 | 4251463 malikai
malikai's picture

$100 bitcoin would be a gift from the gods that I would rejoice.

Mon, 12/16/2013 - 16:13 | 4251493 Transformer
Transformer's picture

This article is BS.  Average 65 year old rc'd $327K more than they paid in?  No proof or explanation is offered.  If you're talking Social Security, the congress stole $2.6 Trillion and spent on their usual fare.  Social Security would be funded for another 10-15 years at least if Congress hadn't stolen all the funds.

You see this kind of shit all the time.  It's part of the divide and conquer meme.  Turn the young people against the old.


Mon, 12/16/2013 - 16:18 | 4251513 somecallmetimmah
somecallmetimmah's picture

Ugggg.  Where do I begin with this one?!?  Probably not worth our time.

Mon, 12/16/2013 - 16:25 | 4251532 Patriot Eke
Patriot Eke's picture

Regardless, I pity the people who depend on government assistance to either eat or stay warm.  They are going to die.

Mon, 12/16/2013 - 16:39 | 4251585 somecallmetimmah
somecallmetimmah's picture

"They are going to die."


Mon, 12/16/2013 - 17:35 | 4251825 madcows
madcows's picture

That's a question for the obama death panels... AKA Kathleen "Terminator" Sebelius

Mon, 12/16/2013 - 21:48 | 4252550 Manthong
Manthong's picture

Orange is a good color as they zap you then plop you on to the conveyor.

..then as a good commodity, you go green. 

Mon, 12/16/2013 - 22:03 | 4252588 Harlequin001
Harlequin001's picture

Yeah but unborn children don't vote, so it's fair... isn't it?

Mon, 12/16/2013 - 22:10 | 4252603 BLOTTO
BLOTTO's picture

We're 'living the dream' boys and gals...just unfortunately, its not ours.

Tue, 12/17/2013 - 06:53 | 4253392 GetZeeGold
GetZeeGold's picture




It's easy to steal candy from babies......cause they're really little.


We're not talking a high degree of difficulty here.


If you do it the right way.....most of them won't even notice it.

Mon, 12/16/2013 - 22:12 | 4252609 Manthong
Manthong's picture

c'mon..  Power Rangers.. save the planet.. Ninja Reptiles to save the next generation..

Dont'cha get it? Geez, like tune in.. plug in.. absorb the surveillance.

Mon, 12/16/2013 - 22:07 | 4252602 Boris Alatovkrap
Boris Alatovkrap's picture

Green!? As is in "Soylent Green"?

Mon, 12/16/2013 - 22:32 | 4252635 Manthong
Manthong's picture

as Boris is might say. is big green tasty circle.. maybe is chlorophil simulated, hypothecated, synthesized circle jerk?

Tue, 12/17/2013 - 02:19 | 4253153 yogy999
yogy999's picture

Awesome!! :-)

Mon, 12/16/2013 - 19:23 | 4252172 SilverRhino
SilverRhino's picture

Not soon enough.  

Mon, 12/16/2013 - 21:01 | 4252416 Patriot Eke
Patriot Eke's picture

When either this whole economic system collapses or a world war makes it collapsing the least of our concerns.

Tue, 12/17/2013 - 02:26 | 4253164 scrappy
scrappy's picture

You mean our ultimate destination, Amen.


Mon, 12/16/2013 - 16:43 | 4251599 Anusocracy
Anusocracy's picture

"what JPM's Michael Cembalest has dubbed, accurately, "generational theft"

Which was preceded by an earlier form of theft: governmental theft.

The latter wouldn't occur without the former.

Mon, 12/16/2013 - 22:35 | 4252688 HiHoAg
HiHoAg's picture

I got some bad news for you patriot.

Ain't none of us getting out alive...

Mon, 12/16/2013 - 22:50 | 4252707 Manthong
Manthong's picture

hi ho.. hi ho.. keep Ag and Au you know.

We knowing one's must keep the faith..

Hi ho, Hi ho..

Mon, 12/16/2013 - 16:53 | 4251635 Anusocracy
Anusocracy's picture

Start with those who were responsible for SS and then go to those who won't get rid of it.

Mon, 12/16/2013 - 16:24 | 4251539 YC2
YC2's picture

The proof and explanation, I would guess, is in the link to the 40 page report.  

Mon, 12/16/2013 - 17:24 | 4251793 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

but i won't be able to keep my biased opinions if i actually read the data... come on now... what fun is there in that? /sarcasm 

Mon, 12/16/2013 - 21:53 | 4252565 Mr Pink
Mr Pink's picture

Are you trying to say that highly informative and detailed bar graph didn't prove anything?

Mon, 12/16/2013 - 16:43 | 4251592 madcows
madcows's picture

The money the boomers paid in didn't go into some lock box for dispensation at retirement age.  It went right to the Boomer's parents.  But, there are a shitload more boomers than there are boomer parents, so the "pay-in" was rather reasonable.  It's easy for the boomer parent to live large until they died at the ripe old age of 55. 

Meanwhile, the Boomers are retiring with far fewer Gen-x-Y-millenials paying in, and are receiving benefits for 30-40 years.  Clearly, that is a problem that the Government did not want to prepare for.

Mon, 12/16/2013 - 16:55 | 4251618 Anusocracy
Anusocracy's picture

The SS recipients are usually quite hawkish, so give them the choice of receiving their payment and defense losing that amount, or having it applied to the defense budget and not receiving SS.

Same for the other welfare recipients.

Mon, 12/16/2013 - 16:56 | 4251671 max2205
max2205's picture

Ben blew up 401k's by the millions 3 times in 9 years....what the fuck do you all expect....Ben...ben?

Mon, 12/16/2013 - 17:35 | 4251828 madcows
madcows's picture

what does ben have to do with SS?

Mon, 12/16/2013 - 16:49 | 4251615 Papasmurf
Papasmurf's picture

This is the second time this month this falacious reasoning has been presented.  When doing these "paid in" calculations, compound interest needs to be applied at the inflation rates through all the years.  The social security accounts would have grown larger than the payouts if congress had not misappropriated funds to spend on pet programs.

Mon, 12/16/2013 - 16:56 | 4251659 max2205
max2205's picture

moar brown people please

Mon, 12/16/2013 - 22:12 | 4252604 JohnnyBriefcase
JohnnyBriefcase's picture

I was under the impression that brown people are undocumented and therefore don't pay taxes/SS or they make so little(above the table) that they don't pay taxes/SS.

Mon, 12/16/2013 - 23:59 | 4252932 ServingMyKing
ServingMyKing's picture

Simple, make them citizens. /sarc

Mon, 12/16/2013 - 22:43 | 4252703 centerline
centerline's picture

math isn't your strong suit, is it?

ever heard of a ponzi scheme?

Mon, 12/16/2013 - 17:07 | 4251714 Offthebeach
Offthebeach's picture

All SS ( State Sheeple ) funds go into the general fund.  There is no trust fund.  Also, no one is owed anything.  Nada.  Zip.  Zero.  SS is a plain ordinary tax.  Everything else is boob bait for sucker old gummys.

Obamacare is the same.  A plain ordinary tax with some health mumbo jumbo palaver for idiots. 



Mon, 12/16/2013 - 17:18 | 4251769 mumbo_jumbo
mumbo_jumbo's picture


i agree, no mention of how they did these calculations...here's my numbers, i have 20+ years left till i could think of retirement and SS has stolen $200K from me...... and counting.

Mon, 12/16/2013 - 17:22 | 4251775 Oldwood
Oldwood's picture

This is bullshit! No explanation? What ass did they pull these numbers from? Most people I know will be lucky to retire at all much less at 65. Exactly how are we extracting this precious money from anyone. I know from government statements that I have paid in $250,000 or more and as far as I know have not yet received a thin pre 65 dime from them yet. Don't even get me started on my $40k/yr property taxes that I'm paying in to educate illegals and all the rest. Generational theft my ASS!

Mon, 12/16/2013 - 22:49 | 4252723 centerline
centerline's picture

All depends on where you are on the "wave" (timing per se) I suppose.  But, really this is not about generational theft.  This is about being lied to over and over.  Centuries of bankers raping the world.  Governments run amok (we were warned by our own founding fathers of course).  Just another cycle in the grand scheme of things.


Tue, 12/17/2013 - 05:07 | 4253314 Oldwood
Oldwood's picture

This is about distractions and division. Our glorious and generous leaders have robbing us blind for years while using a cut of the take to addict citizens and illegals to to "entitlements". Now they have a society that senses the gig is about up and they are trying to focus them on anyone but the actual thieves. There is no way in hell that any generation will be able to fund the stolen money, not in real value anyway. Articles like this just annoy the shit out of me. Boomers know they were robbed and the money isn't there, but they are going to raise hell and demand it if nothing else because society does not understand actions of principle, and if we do not demand the money and make a big stink about it, it will go the way of fast and furious, IRS scandals and Benghazi. After all, "what does it matter, anyway?". This will all have to get really ugly and irrational before anyone pays attention.

Mon, 12/16/2013 - 19:01 | 4252116 doctor10
doctor10's picture

Income tax and payroll deuctible is just too distracting for the clowncar brigade  on Capitol Hill

Mon, 12/16/2013 - 21:12 | 4252436 TheFourthStooge-ing
TheFourthStooge-ing's picture

"Those goddamn socialists in DC and their goddamn socialist lobbyists better not mess with my monthly government check! I'm callin' the AARP, goddamn it! Hey, you kids get offa my lawn!"

If you're talking Social Security, the congress stole $2.6 Trillion and spent on their usual fare.  Social Security would be funded for another 10-15 years at least if Congress hadn't stolen all the funds.

Social Security is, and always has been, a tax. If you fell for the story that it's some kind of fund that you've paid into and that you can expect some kind of return on, well, sorry to rain on your parade but, like millions of others, you've been had.

You don't expect someday to receive a monthly check based on the amount of other taxes you've paid over your life, do you? The only difference between SS and other taxes is the lies told to justify it.

You see this kind of shit all the time.  It's part of the divide and conquer meme.  Turn the young people against the old.

...and the old against the young. You are, unfortunately, correct.

Mon, 12/16/2013 - 22:49 | 4252725 centerline
centerline's picture

Yup.  The truth hurts.  If the money flows to the government, it's a tax.  Got to love those SS statements though.  Almost makes it feel like it's your money!  lol.

Tue, 12/17/2013 - 02:31 | 4253165 scrappy
scrappy's picture

This is ZH.

Stop thinking within the present "system"

We can do any social construct we wish.

It is our true power, if you embrace it.

It's called Liberty.


Tue, 12/17/2013 - 04:41 | 4253296 AldousHuxley
AldousHuxley's picture

present system was built over 1000s years.


you want true liberty, start your own society on mars and cultivate it for 1000 years.

Mon, 12/16/2013 - 21:46 | 4252537 ncdirtdigger
ncdirtdigger's picture

you, transformer, are a special kind of ignorant.

Mon, 12/16/2013 - 22:47 | 4252718 starfcker
starfcker's picture

really, dirtdigger? that's what's wrong with america, the people who worked hard and paid taxes for the last 40 years are getting 1200 bucks a month? cut them off and all is well? how many months of 1200 dollars does it take to get to 300 grand? and you call transformer ignorant? 

Tue, 12/17/2013 - 02:35 | 4252862 scrappy
scrappy's picture

Still the trend is there, let's ally ourselves with the millenials, and the new artist generation (4th turning) and ALL that follow...

It is our ancient and time tested true DUTY as a society.

Come together, right now, over me.



Do NOT follow this link or you will be banned from the site!