We have survived the Cold War and Nuclear threat, but will we survive the Gray Bomb, the most dangerous threat to the USA

The world stands at the edge of a cataclysmic financial abyss, and no i am not talking about the current housing and liquidity crisis, i am talking of something a little further away and somewhat grayer (excuse the pun). Although the drop to 12800 is 1200 off the high, nearly 10% as i predicted back in August (month off due too Bernankes pointless meddling)

The financial and social timebomb is the graying population of the industrialized world. I have coined the phrase the "Gray Bomb" to categorize this impending threat.

We live longer, live better, consume more and expend more. If you sit down and read the social security/ welfare document sent each year to every tax paying American, you will also see that the US welfare system is budgeting to run out of money within the next 20-30 years!

Yes

You heard me

Thats correct, they "admit" quite openly that their coffers will have run dry and they will not be able to provide for anyone properly after that time, without a drastic increase in taxes (probably to a scandanavian style 60+%) Why is this, because the Baby Boomer's will mature, the first of them passed 59 1/2 in 2005 and thus over the next 10-15 years there will be more people claiming social security pensions than people working and paying into the system, creating an insurmountable deficit.

What do i propose or advocate as a solution, don't just throw stones i hear you cry, give us a solution! I hope to provide suggestions that will spark open debate and could ultimately lead to some kind of resolution.

So lets try this, Romania "i believe" recently told its populace they would not be paying for their retirement, people had to plan for it themselves! I think that the social security system is somewhat archaic and grotesquely mismanaged and rather that continue it, make everyone more that 25 years out responsible for their own retirements!!! These people must take financial responsibility and accountability now and start saving.

Several things that need to happen to help society survive;

The government find ways to become more financially efficient and stop or even reverse inflation.

reduce dependency on oil as it is a finite supply and prices will continue to rise even on the exaggeration on the speed of reduction of this decreasing supply. Like Diamonds, it isnt as scarce as prices would indicate, but neither is its supply going to last out our lifetimes!

My solution will have several consequences, many of which i think are inevitable either way, that will be interesting;

The first being that as a collective generation, those that come after the baby boomers will probably be poorer than their parents!

The second that property values will fall significantly as more housing stock is returned to the open market with less inhabitants!

Immigration will increase from countries such as China and India that will become overly populous and lower more affordable prices will draw people in. These countries will ultimately come to resemble Japan and Tokyo in terms of density and expense.

Our generation will have significantly fewer children than our parents as we will simply not be able to afford them.

Copyright Jonathan Rose 2007 - Creative Commons License





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