Sunday, July 30, 2006

Boomers Won't Drive US to Financial Ruin

The United States General Accounting Office recently debunked the myth that the retirement of the boomer generation would drive the stock market into a crash.

The theory goes like this: 78 million Americans are in the boomer demographic, between the ages of 60 and 42. When the boomers hit the retirement age, they will begin cashing in on their 401k plans which are mostly composed of stocks. This will create mass sell-off in stocks which will drive a stock market crash that may lead to a depression.

However, the GAO determined that there is no reason to worry. It seems that the Boomers generally have failed to save for retirement, so they don't have the stocks necessary for a massive, market-crashing sell-off. What a relief!

Of course, this thinking rests on the proposition that we can count on the boomer generation to be morally courageous enough to avoid the temptation to call for massive increases to Social Security in order to fund the retirements for which they failed to plan. Or that our politicians won't pander to a powerful but irresponsible voting demographic that hopes to get a free ride on the backs of the productive members of society who are less mobilized to vote.

I will stop now, as I need to lay on the floor in the fetal position and weep for a while.


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