10,000 baby boomers shall retire today, tomorrow and every day for the next 16 years. The greatest demographic tidal wave in the history of the United States has caught America totally unprepared. Tens of trillions of dollars in entitlements these boomers thought shall be there for them won’t be. When you combine this retirement crisis with all the other economic woes the future is not bright no matter how many "Talking Heads" tell you otherwise on CNBC-TV.
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 debt. So where in the world are we going to get the money to take care of all of these elderly people?
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.
The following are some of the hard numbers about the demographic tidal wave which is now beginning to overtake us...
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.
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.
One poll discovered that 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.
67 percent of all American workers believe that they "are a little or a lot behind schedule on saving for retirement".
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.
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.
According to Northwestern University 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.
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.
Incredibly, the United States spends more on health care than China, Japan, Germany, France, the U.K., Italy, Canada, Brazil, Spain and Australia combined.
If the U.S. health care system was a country, it would be the 6th largest economy on the entire planet.
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.
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.
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.
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.
Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
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.
In fact, the percentage of Americans that are receiving government assistance is now at an all-time record high. This is not a good thing. Sadly, the number of people on food stamps has increased by nearly 50 percent while Barack Obama has been in the White House, and at this point nearly half the entire country gets money from the government each month.
Besides this sure to be aging crisis, I find many other factors quite troublesome and justify my very bearish stance
Real disposable income in the United States just experienced the largest year over year drop that we have seen since 1974.
Median household income in the United States has fallen for five years in a row.
The rate of homeownership in the United States has fallen for eight years in a row.
In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be "lower class". In 2014, an astounding 49 percent of them do. I find that ironic as this age group was one of Obama’s biggest supporters for his election.
Incredibly, 56 percent of all Americans now have "subprime credit".
Total consumer credit has risen by a whopping 22 percent over the past three years.
Overall, U.S. consumers are $11.3 trillion in debt.
The U.S. national debt is currently sitting at 17 trillion, and it is being reported that is has grown by $6.6 trillion during the Obama years so far. Most of the burden of servicing that debt is going to fall on the middle class (if the middle class is able to survive that long).
According to the Congressional Budget Office, interest payments on the national debt will nearly quadruple over the next ten years.
More Americans than ever find themselves forced to turn to the government for help with health care. At this point, 82.4 million Americans live in a home where at least one person is enrolled in the Medicaid program.
There are 46.5 million Americans that are living in poverty, and the poverty rate in America has been at 15 percent or above for 3 consecutive years. That is the first time that has happened since 1965.
Approximately one out of every four part-time workers in America is living below the poverty line.
Only 35 percent of all Americans say that they are better off financially than they were a year ago.
Only 19 percent of all Americans believe that the job market is better than it was a year ago.
While Barack Obama has been in the White House, social benefits as a percentage of real disposable income has risen from about 17 percent to nearly 21 percent.
While Barack Obama has been in the White House, median household income in the United States has fallen for five years in a row.
Workers are taking home the smallest share of the income pie that has ever been recorded.
One recent study found that about 60 percent of the jobs that have been "created" since the end of the last recession pay $13.83 or less an hour.
Only 47 percent of all adults in America have a full-time job at this point.
It is being projected that health insurance premiums for healthy 30-year-old men will rise by an average of 260 percent under Obamacare.
The U.S. national debt is on pace to more than double during the eight years of the Obama administration. In other words, under Barack Obama the U.S. government will accumulate more debt than it did under all of the other presidents in U.S. history combined.
According to a recent CNN poll, 70 percent of all Americans believe that "the economy is generally in poor shape".
According to another poll that was recently released, 70 percent of all Americans do not have confidence that the government will make progress on the important problems and issues facing the country in 2014.
So Yellen is right to be worried about jobs. But she’s wrong to think the Fed can do much about this.
Holding back growth and jobs are a series of tax and regulatory barriers that must be fixed if we are to move from secular stagnation back to traditional American prosperity. Obamacare is at the top of the list. The CBO puts the essential job loss at 2.5 million. It will be worse unless Obamacare is repealed.
Perverse Obamacare incentives will penalize industrious people as they climb the ladder of opportunity. They will lose their health-care subsidies and land in higher income-tax brackets. This steep subsidy cliff is a work trap that becomes a poverty trap.
If it pays less to work, people will work less. The Fed can do nothing for this.
But there’s more holding back the economy than Obamacare. A recent report by Tax Foundation president Scott Hodge shows that the U.S. has the worst corporate and capital-gains tax structures among the OECD developed countries. The EPA is going to destroy the coal industry. The Obama administration refuses to open up federal lands for oil-and-gas fracking and drilling, even though the energy revolution is a high-paying job creator. And the National Labor Relations Board is pushing for snap “ambush elections” to promote unionization.
These are all job killers, but the Fed can do nothing for this.
Speaking of the FED, their most recent minutes earlier this week had a most interesting sentence. They said “ that risks to financial stability should appear more in the list of factors that would guide decisions about the federal funds rate once the unemployment rate threshold is crossed”
What this means is that the Fed's 6.5% unemployment threshold is dead and buried. The Fed is now suggesting that it will be guided more by intangible factors: like "risks to financial stability”. I think what they’re not saying they’re going to make the level of the stock market their real agenda. To me, this was a shielded admittance they created yet another bubble.