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The Fiscal Cliff – Part 2 vol16

December 20, 2012

Welcome back to Boomers – wtf blog, and our attempt to stay positive in the face of overarching changes in our world. Staying positive is the mission of this blog, but we need to deal with our social and economic environment first.

The pessimists today are harping on the lack of good paying jobs going forward, as we export work to China, automate everything else, and try to sell each other lawnmowers. To be clear, we are losing jobs because we are burdening them with increasing social costs. These jobs then head overseas. The struggle becomes finding the optimum balance of profits and social costs that, in our capitalist system, allows continued economic growth. Just look at what is happening to the United States.

A major belief is that the US will decide on the next round of economic rules, tax rates, and social services that can be afforded. Boomers the world over await the outcome, and the rest of the countries will soon use whatever logic the US uses to convince their own populations that change is essential. Part of the problem with the European financial issues is that their leaders can not sell their people on a solution to all the debt that has been incurred. They try, but no-one believes that they are part of the problem, so why should they be part of the solution ?

There was a study done last year, asking Europeans who were the hardest working people. Everyone in all the surveyed countries, except one, picked the Germans as the hardest working peoples. The one country who thought they were more industrious than the Germans ? The Greeks ! Enough said…

In the US, the struggle continues in the form of an economic fiscal cliff. The wrangling is basic to our beliefs. Conservatives are solidly resisting new and continued government spending as being detrimental to our growth prospects and the resulting new jobs that could be possible. Liberals look at all the people who are facing huge job cuts, food stamps, and foreclosures, and insist on short term funding. Really, this fight is a bit of a misnomer, as you first have to realize that the US government’s revenues this year will be at record levels. Imagine, record revenues and still huge deficits.

The real fight is over the rapidly growing social costs for Boomers, and the fact that all politicians are simply scared to discuss the truth. So, we are looking at a trade-off, getting all the healthcare and social security we will need to maintain subsistence levels of life, in exchange for no hope for future gain in the form of jobs . 

If Boomers are to live another 40 years, how will you afford to eat if our governments have no money ? If you are not sure of this statement, ask a Greek ! 

The USA is also undergoing many other changes, leading to the idea that Conservatives are slowly being marginalized. Consider the push to legalize same sex marriage, legalized pot, a growing gun control lobby, and a solution to immigration. Wow, what ever happened to the US of the wild west, winner take all, “in your face” attitudes ? Are Boomers the reason ?

I know, we are not Greece, but consider the economic picture going forward. All this talk of the fiscal cliff is very European. Watching the EU try to climb its way out of the financial hole is rewarding in only one instance. That instance is to allow us to determine which of the countries would you rather live in, because that represents the range of choices now available under Capitalism.

Of course, we could choose to throw off the Capitalistic rules, but no-one seems willing to propose an alternative – better said, such proposals are available, but are not gaining any traction with the masses. For example, there are right wing groups in many countries fighting immigration, but they are failing to convince enough people that their cause is justified.

So, how about Denmark ? Greece ? Germany ? Canada ? Which model should the US adopt, as it is only a matter of time. Frankly, you could argue that Capitalism is actually making most countries, slowly, become mirror images of each other, but lets keep the US as an outlier for now.

Is Germany the best choice, the one most similar to the US ? Ignoring the language issue, Germans have attitude, respect their farmers, fight the good fight against pollution, and are hard working. They expect social benefits and lots of holidays, but realize that they have to work for them. Labour works with Business to survive, and is doing a good job keeping its economy going.

Is Canada the right choice ? Conservative type values, lots of energy, a reasonable immigration policy, protestant work ethic, a cheaper medicare system, and a banking sector that is the best in the world.

It’s a fun parlour game to discuss these choices, but the real point can not be lost – Boomers will have to choose, because a good retirement and sitting in our lawn chairs are mutually exclusive choices.

Consider this statistic before you decide that you are not part of the issue.  If you add up all the 2012 US states unfunded public pensions for nurses, teachers, police, and firemen, its over $1 Trillion dollars. Unfunded, never to be funded. Cities going bankrupt in California are just the start of a domino game that will only grow. Scary ? Yes, in the short term, but solvable in the timeframe Boomers have, if we start soon.

Next time on Boomers – wtf !, why television is ruining our future.

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