Billionaire Preaching Doom for Social Security and Medicare

[jkapp]

Talk amongst yourselves...I'll give you, yet, another topic

www.msn.com/en-us/money/retirement/billionaire-preaching-doom-for-social-security-and-medicare-is-he-right/ar-AAeRgI4

It's not every day that a billionaire comes out and states publicly that Social Security and Medicare are doomed. It's rarer still for that same individual to preach to an entire generation -- millennials in this case -- that they are being swindled by their own government on a massive scale. And yet Stanley Druckenmiller, a former hedge fund manager worth over $4 billion at last count, has been traveling the country giving speeches to college students and expounding these beliefs to huge audiences for over two years.

Druckenmiller made his fortune as a "macroeconomic" trader, betting on not only stocks and bonds but also commodities and currencies, but he has turned his sights to entitlement reform since retiring in 2010. When you look at Druckenmiller's record, many of his calls seem prescient -- which is why every American should be interested in his views on the future of U.S. entitlements, specifically regarding Social Security and Medicare.

To start, Federal Government Entitlement Transfers as a percentage of Federal Budget Outlays have risen from 28% of the total budget to nearly 70% of the budget over the last 50 years...

The troubling conclusion is that these payments are being made instead of investments in research, infrastructure (think America's roads are bad now?), and education. Mr. Canada, one of America's pre-eminent educators, noted that the damage of our government's failure to invest adequately in education will be huge in itself. These investments are, after all, the future of the United States. As Druckenmiller pointed out, government spending has yielded NASA, the semiconductor, the Internet, the Interstate Highway System, and GPS, just to name a few modern benefits we all enjoy. Think for a moment where would the United States be today without these advances.

This massive increase in entitlement spending, which in the coming years will grow worse due to the rising number of retirees per employed worker, has led to a transfer of wealth on a massive scale from the young to the old over the last 27 years...

The bottom line: An average 29- to 37-year-old today has a 21% lower net worth, adjusted for inflation, than the average 29- to 37-year-old did in 1983. An average 74-year-old today, however, has a 150% higher net worth, adjusted for inflation, than the average 74-year-old did in 1983.

Sound crazy? It is.

This massive wealth transfer happened because entitlements to the elderly continued to rise while expenditures to the young (and their children) stayed flat or even fell. One reason for this, as put forth by Druckenmiller, is that elderly Americans vote in greater numbers than the young, leading politicians to focus on them as a voting block in order to protect their own positions of power.

It's about to get a lot worse (see article for more).

[Value Buy]

The bottom line: An average 29- to 37-year-old today has a 21% lower net worth, adjusted for inflation, than the average 29- to 37-year-old did in 1983. An average 74-year-old today, however, has a 150% higher net worth, adjusted for inflation, than the average 74-year-old did in 1983.

Sound crazy? It is.

This massive wealth transfer happened because entitlements to the elderly continued to rise while expenditures to the young (and their children) stayed flat or even fell. One reason for this, as put forth by Druckenmiller, is that elderly Americans vote in greater numbers than the young, leading politicians to focus on them as a voting block in order to protect their own positions of power.




Part of that wealth transfer came from the generation before them. Many inherited a ton of money from their parents. If they did not spend it, they still have it.
Entitlements might have played a part, but not as much as the inheritances.

[Deleted]

Good luck to him.  Anyone who thinks someday America will have to pay for bad choices today is ridiculed as a pessimistic loser.

[djAdvocate]

Medicare is on a collision course with reality.

SS will be fine, with some minor tweaks.

[fishy999]

We should all listen to billionaires, they have our best interests at heart. 

BTW it is every other day that some billionaire comes out about something-  world did not end after the blood moon either.

[fishy999]

Sept 28, 2015 18:53:18 GMT -5 Value Buy said:

The bottom line: An average 29- to 37-year-old today has a 21% lower net worth, adjusted for inflation, than the average 29- to 37-year-old did in 1983. An average 74-year-old today, however, has a 150% higher net worth, adjusted for inflation, than the average 74-year-old did in 1983.

Sound crazy? It is.

This massive wealth transfer happened because entitlements to the elderly continued to rise while expenditures to the young (and their children) stayed flat or even fell. One reason for this, as put forth by Druckenmiller, is that elderly Americans vote in greater numbers than the young, leading politicians to focus on them as a voting block in order to protect their own positions of power.




Part of that wealth transfer came from the generation before them. Many inherited a ton of money from their parents. If they did not spend it, they still have it.
Entitlements might have played a part, but not as much as the inheritances.

So which one of you are advocating screwing our elders?  Sound kind of jelly

[Deleted]

Sept 28, 2015 21:44:57 GMT -5 fishy999 said:

We should all listen to billionaires, they have our best interests at heart. 

BTW it is every other day that some billionaire comes out about something-  world did not end after the blood moon either.

People take sources too seriously.  Some guy says it is his opinion or analysis.  It should either stand or fall on what is said, not on who says it.    It is different is you are judging the person, but why would anyone want to judge some billionaire they never heard of?

[Value Buy]

Sept 28, 2015 21:47:55 GMT -5 fishy999 said:

Sept 28, 2015 18:53:18 GMT -5 Value Buy said:

The bottom line: An average 29- to 37-year-old today has a 21% lower net worth, adjusted for inflation, than the average 29- to 37-year-old did in 1983. An average 74-year-old today, however, has a 150% higher net worth, adjusted for inflation, than the average 74-year-old did in 1983.

Sound crazy? It is.

This massive wealth transfer happened because entitlements to the elderly continued to rise while expenditures to the young (and their children) stayed flat or even fell. One reason for this, as put forth by Druckenmiller, is that elderly Americans vote in greater numbers than the young, leading politicians to focus on them as a voting block in order to protect their own positions of power.




Part of that wealth transfer came from the generation before them. Many inherited a ton of money from their parents. If they did not spend it, they still have it.
Entitlements might have played a part, but not as much as the inheritances.

So which one of you are advocating screwing our elders?  Sound kind of jelly

Not me.
Just because we have more elderly today than we had twenty or forty years ago does not mean it is a wealth transfer to the elderly, per se.
Of course the total dollars sent out is larger. There are a lot more of them (elderly) than before.
Same for the young on welfare and foodstamps.
The generation having babies after WWII are dying and leaving everything to the babyboomers, thus, a lot of assets have been transferred to the youngest of the elderly.

[Value Buy]

Part of the economic problems of the younger generation is also caused by all the illegals in the country.
If an illegal has a job, they are taking them from our young citizens.
Look at the construction industry in housing. How many crews are basically Spanish speaking?
These are jobs that pay fifteen to thirty dollars an hour, or more, depending on the craft.

[fishy999]

Sept 28, 2015 22:13:19 GMT -5 Value Buy said:

Sept 28, 2015 21:47:55 GMT -5 fishy999 said:

So which one of you are advocating screwing our elders?  Sound kind of jelly

Not me.
Just because we have more elderly today than we had twenty or forty years ago does not mean it is a wealth transfer to the elderly, per se.
Of course the total dollars sent out is larger. There are a lot more of them (elderly) than before.
Same for the young on welfare and foodstamps.
The generation having babies after WWII are dying and leaving everything to the babyboomers, thus, a lot of assets have been transferred to the youngest of the elderly.

I was jelly and still am to a point- my parents grew up in the days of cheap housing and pensions- they don't get what I have to go through just to hope and pray I can take care of my spouse if things go bad.  The boomers had it all- while their parents fought the war.

They have retirement pensions, medical pensions, and more.  Regular American citizens get jack shit

[Value Buy]

Sept 28, 2015 22:32:48 GMT -5 fishy999 said:

Sept 28, 2015 22:13:19 GMT -5 Value Buy said:

Not me.
Just because we have more elderly today than we had twenty or forty years ago does not mean it is a wealth transfer to the elderly, per se.
Of course the total dollars sent out is larger. There are a lot more of them (elderly) than before.
Same for the young on welfare and foodstamps.
The generation having babies after WWII are dying and leaving everything to the babyboomers, thus, a lot of assets have been transferred to the youngest of the elderly.

I was jelly and still am to a point- my parents grew up in the days of cheap housing and pensions- they don't get what I have to go through just to hope and pray I can take care of my spouse if things go bad.  The boomers had it all- while their parents fought the war.

They have retirement pensions, medical pensions, and more.  Regular American citizens get jack shit

I retired without a pension. I did work until 66 to build the nestegg a little more
Medical, quite frankly Medicare works out better for my wife and I than any insurance policy I ever had during my working career. I was shocked how good it is.
If you invested a little every year in the stock market, you wound up with a fair nest egg, and could be better than many pensions, unless you were a true bigshot in corporate.
My first house cost me $52,500, sold it for double seventeen years later and moved up.

[happyhoix]

Sept 28, 2015 22:13:19 GMT -5 Value Buy said:

Sept 28, 2015 21:47:55 GMT -5 fishy999 said:

So which one of you are advocating screwing our elders?  Sound kind of jelly

Not me.
Just because we have more elderly today than we had twenty or forty years ago does not mean it is a wealth transfer to the elderly, per se.
Of course the total dollars sent out is larger. There are a lot more of them (elderly) than before.
Same for the young on welfare and foodstamps.
The generation having babies after WWII are dying and leaving everything to the babyboomers, thus, a lot of assets have been transferred to the youngest of the elderly.

Not necessarily. My dad had alzheimers and my mom now has dementia and is living in an assisted living facility for $6000 per month. She's already spent down about 2/3  of her nest egg paying for the assisted living facility over the last four years, and in 2 years will be out of money completely. Even if she passed away tomorrow, not much wealth left to transfer to the kids.

As deaths from heart failure and cancer drop due to new technologies and medicines, people are living longer, and many of them end up requiring some kind of assisted living/nursing home care, so there will be fewer people able to leave anything to their kids, over the next decades. This is going to trigger a healthcare melt down, IMHO, especially when people start hitting the system who have no pensions and who didn't bother to save any retirement money for a nest egg.

[happyhoix]

I agree that we need to be putting our money into infrastructure and education. I don't think Mr Drunkenmiller will like my solution, though - tax hikes for the ultra wealthy, including those who made fortunes as hedge fund traders.