22 Facts About The Coming US Demographic Shock Wave

Tyler Durden's picture

Submitted by Michael Snyder of The Economic Collapse blog,

Today, more than 10,000 Baby Boomers will retire.  This is going to happen day after day, month after month, year after year until 2030.  It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it.  We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep.  Even if we didn't have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself.  During the first half of this century, the number of senior citizens in the United States is being projected to more than double.  As a nation, we are already drowning in debtSo where in the world are we going to get the money to take care of all of these elderly people?

The Baby Boomer generation is so massive that it has fundamentally changed America with each stage that it has gone through.  When the Baby Boomers were young, sales of diapers and toys absolutely skyrocketed.  When they became young adults, they pioneered social changes that permanently altered our society.  Much of the time, these changes were for the worse.

According to the New York Post, overall household spending peaks when we reach the age of 46.  And guess what year the peak of the Baby Boom generation reached that age?...

People tend, for instance, to buy houses at about the same age — age 31 or so. Around age 53 is when people tend to buy their luxury cars — after the kids have finished college, before old age sets in. Demographics can even tell us when your household spending on potato chips is likely to peak — when the head of it is about 42.

 

Ultimately the size of the US economy is simply the total of what we’re all spending. Overall household spending hits a high when we’re about 46. So the peak of the Baby Boom (1961) plus 46 suggests that a high point in the US economy should be about 2007, with a long, slow decline to follow for years to come.

And according to that same article, the Congressional Budget Office is also projecting that an aging population will lead to diminished economic growth in the years ahead...

Lost in the discussion of this week’s Congressional Budget Office report (which said 2.5 million fewer Americans would be working because of Obamacare) was its prediction that aging will be a major drag on growth: “Beyond 2017,” said the report, “CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades [due in large part to] slower growth in the labor force because of the aging of the population.”

So we have a problem.  Our population is rapidly aging, and an immense amount of economic resources is going to be required to care for them all.

Unfortunately, this is happening at a time when our economy is steadily declining.

The following are some of the hard numbers about the demographic tsunami which is now beginning to overtake us...

1. Right now, there are somewhere around 40 million senior citizens in the United States.  By 2050 that number is projected to skyrocket to 89 million.

2. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

3. One poll discovered that 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.

4. According to a survey conducted by the Employee Benefit Research Institute, "60 percent of American workers said the total value of their savings and investments is less than $25,000".

5. 67 percent of all American workers believe that they "are a little or a lot behind schedule on saving for retirement".

6. A study conducted by Boston College's Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.

7. Back in 1991, half of all American workers planned to retire before they reached the age of 65.  Today, that number has declined to 23 percent.

8. According to one recent survey, 70 percent of all American workers expect to continue working once they are "retired".

9. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

10. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

11. Today, only 10 percent of private companies in the U.S. provide guaranteed lifelong pensions for their employees.

12. According to Northwestern University Professor John Rauh, the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

13. Right now, the American people spend approximately 2.8 trillion dollars on health care, and it is being projected that due to our aging population health care spending will rise to an astounding 4.5 trillion dollars in 2019.

14. Incredibly, the United States spends more on health care than China, Japan, Germany, France, the U.K., Italy, Canada, Brazil, Spain and Australia combined.

15. If the U.S. health care system was a country, it would be the 6th largest economy on the entire planet.

16. When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around.  Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

17. It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

18. At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for every single household in the United States.

19. In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

20. Right now, there are approximately 63 million Americans collecting Social Security benefits.  By 2035, that number is projected to soar to an astounding 91 million.

21. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

22. The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead.  Social Security and Medicare make up the bulk of that.

So where are we going to get the money?

That is a very good question.

The generations following the Baby Boomers are going to have to try to figure out a way to navigate this crisis.  The bright future that they were supposed to have has been destroyed by our foolishness and our reckless accumulation of debt.

But do they actually deserve a "bright future"?  Perhaps they deserve to spend their years slaving away to support previous generations during their golden years.  Young people today tend to be extremely greedy, self-centered and lacking in compassion.  They start blogs with titles such as "Selfies With Homeless People".  Here is one example from that blog...

Selfies With Homeless People

Of course not all young people are like that.  Some are shining examples of what young Americans should be.

Unfortunately, those that are on the right path are a relatively small minority.

In the end, it is our choices that define us, and ultimately America may get exactly what it deserves.

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therevolutionwas's picture

I have a 94 year old mother in law that is on the internet daily.

WillyGroper's picture

In 1997 I spoke with a 95 yr old college professor that did nothing but rave about the internet. 

Don't sell them short. Some actually can get beyond the flashing 12:00 on a VCR.

phaedrus1952's picture

Of course I up arrowed you, Wiley, but I gotta call you on that VCR thing. I was around when they were first introduced and I have NEVER met anyone who was able to stop that eternally-blinking 12:00

wtf1369's picture

Black electric tape worked wonders.

vortmax's picture

My grandmother is 82 and spends more time online than I do. It's 2014, how difficult is pointing and clicking?

Zwelgje's picture

For Romanians it is quite a challenge so it seems.

kareninca's picture

My father-in-law is 89 and is perfectly comfortable with the internet.  He just finished self-publshing his third (fourth?) ebook using Amazon; they sell tolerably well.  He's nearly vegan (some fish), has practiced caloric restriction for decades, and is as mentally sharp as anyone I know.

Leraconteur's picture

This is what older folks refer to when we discuss you young idiots.
You, and your bias and your stupidity.

You see, 'you know' that NO ONE 70 can understand computers. Too difficult, old people are stupid and don't use electricity. 

Unfortunately for you, you are wrong.

 

"I am not young enough to know everything" -- Ernest Woolley as an Oscar Wildean character in JM Barrie's 1902 play "The Admirable Crichton".

 

 

 

merizobeach's picture

"We PAID for social security."

And all of the wars, corruption, usurpations of liberty, etc, and you just kept on loyally paying.  Fuck you brainwashed taxpayers for relentlessly funding the evil that your government perpetuates on the entire world.

chinoslims's picture

More people retire means less people buying mutual funds/stocks/ETF's in retirement accounts.  The great deflation is gonna come whether Janet Yellen or her successors like it or not.  No central bank can fix demographics unless they start producing human baby factories.  Oh, didn't they have that in the Matrix?

Professorlocknload's picture

Or maybe some massive immigration?

Dr. Destructo's picture

"Alchahol"?

Idiots are more prevalent in my generation due to a decline in quality of education. Many learn only what the institutions teach them -the lies, the pat on the balls, the 'free' money for college that gives them no practical information for their chosen trades.

What these idiots in the picture (and the one taking the picture) above don't realize is that the homeless man passed out in the streets can very easily be a window into their future. Who's going to hire these asshats in the private sector? A temp agency perhaps if they are lucky. Though the girl might make a pretty good prostitute. Though the military is always looking for compassionless killing machines for it's next overseas 'adventure' *cough* Syria and Iran.

A lesson I learned long ago is reality, like payback, is a bitch. These douchebags will learn that the hard way, and it will make them humble like it did for me. But luckily I learned that lesson before I went full douchebag.

edotabin's picture

"Idiots are more prevalent in my generation due to a decline in quality of education"

 

Families have been obliterated and that plays a huge role as well, including being one of the many reasons for failing education.

Grande Tetons's picture

Doc Destructo,

Humility is the breaking system on the douchebagmobile.

Good for you, doc, for applying the brakes before skidding off into shithead cavern. 

 

Dr. Destructo's picture

Don't lose hope, as more will follow down the road when the state of affairs worsen.

FreedomGuy's picture

I like the article but it misses the core problem: collectivism. None of these demographic booms or busts is a problem in a society where we are responsible only ourselves. Virtually every single social program is either a transfer which is theft or a ponzi like Social Security and Medicare where ever larger and more prosperous generations pay for their predecessors. When the number of people putting money into the systems fails to increase while the number demanding the return of their "investment" then the Ponzi unravels. When this unravels it will be quick, brutal and I think, unexpected. We got a small glimpse in the last downturn when all the numbers went into the red.

Congratulations, America. You have joined all others in falling for the empty promises of collectivism. But, hey...we fell last!

LetThemEatRand's picture

If the problem is collectivism, shall we all individually fight those who took the money?  How is that individual fight against the oligarchs working out for you and mankind throughout history?  Here's a little hint for assessing your ideology.  The people who own all the wealth consistently tell us that they earned it by individual achievement and that to take it from them would be socialist.  They laugh at you while you tell We The People to fend for ourselves and leave them alone. 

nowhereman's picture

Seems like they just decided to take the money and then tell us it's our fault for expecting our money was there in the first place.

therevolutionwas's picture

Who took the money?    Government, the State.   Get rid of the State.

The people who  "own all the wealth" don't  "all" deserve it.  Some do, some don't.  Some earned it, some did not.  I don't have much money but I will tell you to "fend for" yourself and leave me alone.  There are certain truths out there.  Discover them.

FreedomGuy's picture

That is a typical stupid collectivist argument. You might have made this argument in the age of monarchs and privelage where wealth generally derived from your place in government. Today, you have a job unless you started your own business. You made an agreement for the wages you got. Most wealthy people in America actually did earn it. Some are lucky like Paris Hilton and get it from dad and granddad's earnings but it is still family property. Frankly, we all need someone like the Hiltons, Ray Kroc, Steve Jobs or any number of innovaters who make millions of jobs producing things for our fellow man. Most of us do not have the initiative, energy, and expertise, much less capital to start a railroad, coffee house or robotics factory. I am not poorer because Bill Gates is fabulously wealthy. A whole raft of people got wealthy from their association with Microsoft. In the future they could go bankrupt.  

The problem is government. Walmart cannot raise your taxes, force you to register your car, require passports, force others to bail out your business or even monitor your PC. That is all the stuff of government. Government legally steals at least half your income...by law and you seem to be okay with that, EatRand. You worry about some nameless group of wealthy people you think stole your money while government confiscates your earnings for anything they damned well please in front of your face. They tell you they will take more if they like and this is okay. You will also buy car insurance, health insurance, shares in GM, Solyndra bonds and fund cow fart studies...or else.

So, let's assume you believe some banker, wealthy, crony-socialist conspiracies. Where do they get the power to steal and rig or fix the system to their advantage? Yes, government gives them this power. Government has the guns, money controls and surveillance networks to make it all work. All theft requires force and government has a monopoly on force.

Raging Debate's picture

To FreedomGuy - Ding ding ding we have a winner! Congress can end the Fee anytime they so choose. It was politicos that had to sign off on the bailouts in 2008. It was politicos that repealed Glass-Steagall and other market protections from the predation of banking in 1998.

There is still so much money sloshing around and for most people getting to a the truth is difficult, even though the public is now finally wide awake (always seems to happen after the looting and human nature guarantees this for the masses). At the federal and state level elections mean nothing. At the local level they still do and it is far easier to find info on the local politician than others. Get involved. Try Rotary club for example to get your feet wet. Sure, it may be twenty years before you can run for Senator and really influence things but by then it will take more than money to win elections. As things continue stagnating necessity to move forward creates innovative ways to deal with. Plus at local level you meet new friends and create ways to increase income through networking. Just being here is a contribution, call it influencing the influencers (investment communtiy).

Knowledge is power so sites like these are great but the personal activity locally rounds out the rewards in trying to help. Start at an hour a week at Rotary or town hall meeting, or do some charity work like soup kitchen. I say this because its rewarding you get much back.

Professorlocknload's picture

The corrupt took the wealth enabled by the  protection of the State.

Professorlocknload's picture

Sorry freedom, I replied before scrolling down to your reply. You said it bettter than I could have.

Amazing how far this experiment has strayed from such simple principles!

Harry Dong's picture

Collectivism is where we give the top .1% and their top 10% technocrats more and more? Maybe I'm confused.

kurt's picture

Collectivism rhymes with Jism, but you should know this, Dong.

nowhereman's picture

Wait,wait wait!

It seems to me that for my whole working life a portion of my income was witheld from me to fund my social security.  And during the 70s when interest rates were upwards of 20% those monies were doubling every 3 to 5 years.  Hell, I was rich.  I had no worries.  I was taken care of.

What happened to all that money? 

Let's not look at who stole the money, let's blame the boomers for actually expecting the money was there in the first place.  Let's blame them for actually believing the government was managing their money for them. 

Now the money isn't there. 

Do the math  How many working people were paying into the system through the 50's, 60's, 70's, 80's, 90's?  How much money in payroll deductions were collected during those many decades? 

Where did all that money go?  If it was invested on our behalf there should be plenty to go around.  The economy was booming.  Interest rates in the 70's should have ensured enough money for decades to come.

But, hey, it's all the boomers fault.  We were gullible enough to believe that the government and the social security administration were doing their job.

So to all you morons out there that think the boomers are to blame, grow up, get a grip, and stop falling for the neo-liberal bull shit that parades as ZH articles these days.

TBT or not TBT's picture

It went into the lock box. The Dems told you so over and over. Until the debt crisis last year when Obama hit the TelePrompTer to tell you social security checks were threatened. I guess Ted Cruz stole the key to the lock box or something, because your money was in there, multiplying just like you imply throughout the 70's.....or was that sarc on your part. I'm two drinks in here this evening.

Professorlocknload's picture

Good thing you weren't allowed to put all that SS money in the S&P at 138 with dividends reinvested or in the Long Bond at 20%, back then. What would you do with all that money now?  Sarc/

 

Dead Man Walking's picture

Simply a story of exponential growth.  It's actually much worse than you say, consider the exponential consumption of resources-water, oil, power,etc.

see "The most IMPORTANT video you'll ever see" great visualization of exponential growth-

https://www.youtube.com/watch?v=u5iFESMAU58

Cacete de Ouro's picture

"There was a time when you didn't WANT me to change" - Ron Jeremy - early years appearance

monad's picture

Arm the seniors!

Dr. Destructo's picture

I'd go with arming us Millennials -we have 10+ years of combat experience underneath our belts as a generation, and a good number of us veterans have woken up to the reality of the times.

Hengist's picture

Yes but you all voted for Obummer twice, has it finally dawned on you that this was a bad idea?

Dr. Destructo's picture

I didn't vote for Obombya at all.

I saw through that charade, but I agree with you that many of us did vote that asshole in -but that was mainly college students that were more excited of having the first black (mulatto) president instead of one that would get the job done i.e.  none of the above.

My American history teacher made this nausiating speech about how she was proud of us because we made history by electing that tyrant.

However, I would argue that voting really didn't matter, as we were choosing between a shit sandwich and a bucket of piss. It's a rigged process since the candidates are bought off by both sides and the 'representatives' rely on donations to measure progress instead of how well they represented their constituents. I decided by not voting I remove my part of the endorsement to a corrupt system.

kurt's picture

Attention all Geezers. Stay in shape. We PAID for Social Security. 

They say old boxers have One More Good Hit in them.

We may have to get together and smash em up once more.

Geezer Army of the Republic

GooseShtepping Moron's picture

And this is just in America.

Demographics all over the world are in an absolutely miserable condition from the "growth" perspective. There will not be any more growth; there cannot be any more growth. Both the quantity and the quality of the human population is in absolute decline. Of course I'm not saying anything new here, but it bears repeating.

therevolutionwas's picture

Yeah, but China and other countries don't have social security and medicare to worry about.  Those folks are on there own and set aside for it. 

TBT or not TBT's picture

Us ZH posters on the other hand, we are improving every day.

drendebe10's picture

It's Bush's fault.

TBT or not TBT's picture

Fertility changes depending on genital shaving fashions? Maybe. There was a tremendous amount of bush in the 70's, but I'm loathe to collect more data further back or much into the 80s either.

Atomizer's picture

Fact 23)

How much longer do you think you can poke holes in a leaky mess within this administration?

 

10 February 2014 |Request to Caitlin Hayden for Full NSA Comments

Submitted to the White House, 10 February 2014, 16:15.

To: Caitlin Hayden, National Security Council:

Hayden has been quoted in a recently published book, "The Snowden Files: The Inside Story of the World's Most Wanted Man," as responding to inquiries from the Guardian newspaper concerning disclosure of classified NSA documents, and quoted as well in a news report today, 10 February 2014, "The NSA's Secret Role in the U.S. Assassination Program," by Jeremy Scahill and Glenn Greenwald, concerning release of classified information about alleged NSA role in drone strikes. It would be beneficial for the public to have access to Hayden's full remarks in both these cases rather than snippets favoring the news outlets' side. I would like to publish Hayden's full remarks on the public education website, Cryptome.org, of which I am the administrator, which since 1996 has provided information on intelligence agencies. Thanks very much.

http://cryptome.org/2014/02/caitlin-hayden-wh.htm

Dear NSA,

You tell the African American in WH office, he has lost his mind and the credibility within the global community has vaporized. Economic terrorism resides from within this administration. Kindly show your taxpayer investment by protecting our country against a multi-national globalist take over.

Leaf of Tree's picture

I always wondered why the term African-American when speaking about black people.

When whites use supposedly politically correct expression African-American, instead of American or simply black, I always interpreted that as a subtle way of saying you are African first, and then American, understand that boy. You don't belong here boy.

And blacks are too stupid to even see the subtle malicious connotations in that supposedly politically correct expression.

Black people in USA are American. Period.

They are not African - American. 

 

Ask someone whose ancestors came from Scotland to America 400 years ago if he names himself Scottish-American or simply American. Or just white.

Why do blacks in USA fall for these tricks?

Clowns on Acid's picture

Seriously...do you really want to know...?

Leaf of Tree's picture

Give it your best shot. After all, your ID is Clowns on acid.

This should be interesting.

TBT or not TBT's picture

The mean in the distribution of their IQ's is to the left of that for the general population?

Negative1's picture

I've got the answer right here...excuse me while I whip this out...

Professorlocknload's picture

Political divide and conquer techniques are most convincing. They are as old as political science.