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.

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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.

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.


malikai's picture

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

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.


somecallmetimmah's picture

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

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.

somecallmetimmah's picture

"They are going to die."


madcows's picture

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

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. 

Harlequin001's picture

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

BLOTTO's picture

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

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.

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.

Boris Alatovkrap's picture

Green!? As is in "Soylent Green"?

Manthong's picture

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

Patriot Eke's picture

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

scrappy's picture

You mean our ultimate destination, Amen.


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.

HiHoAg's picture

I got some bad news for you patriot.

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

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..

Anusocracy's picture

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

YC2's picture

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

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 

Mr Pink's picture

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

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.

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.

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?

madcows's picture

what does ben have to do with SS?

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.

max2205's picture

moar brown people please

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.

ServingMyKing's picture

Simple, make them citizens. /sarc

centerline's picture

math isn't your strong suit, is it?

ever heard of a ponzi scheme?

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. 



mumbo_jumbo's picture


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

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!

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.


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.

doctor10's picture

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

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.

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.

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.


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.

ncdirtdigger's picture

you, transformer, are a special kind of ignorant.

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? 

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.