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The boom could lead to bust

As government at all levels continues to trim budgets and deal with deficits and shortfalls, an ominous shadow looms in the background, ready to fall over the fiscal landscape.

In short: The puppy is in the python.

By this, we mean a crowd is making its way to the forefront of budget and social situations. The more attention paid to it now, the better.

This is the year the first of the Baby Boomers hits retirement age. You remember the Baby Boom — the surge in births between 1946 and 1964 (an estimated 79 million births).

From this year on, for a couple decades, members of this often self-indulgent and self-satisfied “generation” will cross over from the productive class to being members of that segment of the population that rides through their final years on a wave of investments, pensions, social security payments and Medicare.

It is said a key measure of a society is how it treats the very young and the very old.

Our society will soon be put to the test.

While members of the Baby Boom generation were privileged to be raised in the ’50s and ’60s, in times of unprecedented growth and in a prospering middle class, not all Boomers are now flush with the fruits of a lifetime of labor. Many have not planned their end games. The fact that many of the Boomers will enter this final phase of life absent the financial muscle needed to carry them through will make our fiscal problems more complex.

Significant numbers of Boomers took a big hit during the current financial crisis. Too many have little in the way of substantial investments, sound retirement plans; too many entered the last five years with only one asset — their home. Home values took a nosedive in the recent crash and foreclosure deprived many Boomers of that sole investment. Too many Boomers are set to rely primarily, if not solely, on Social Security and Medicare.

Too many also cling to a dangerous illusion: that of the perpetually healthy senior. The illusion is propagated in the media, prompted by Big Pharma. The tune is comforting, the lyrics: “Sixty is the new forty, you are as young as you feel.”

For a while, the song will resonate with many Boomers. They will jog, work out, dance, ski, feel some aches and pains, and forge on, comfortable in the illusion.

But, for all, the parade will come to a dead stop. The reality is the end game for most humans, even the privileged, is not bathed in a golden glow. If we live long enough, we take ill, the body breaks. And the process is costly — for the individual, couple, family, and society.

The question is, Who is going to bear that cost, when individual funds run dry, when there is no family support?

Our budget cutters must reckon with this eventuality. They make a big show now of cutting things from the smallest, most vulnerable portions of the budget, yet they shy away from serious cuts to the monsters in the room — in particular the defense budget. They trim funds from education (thus hampering the progress of the generation that will, inevitably, be called upon to provide funds needed in the future), but they shy away from the possibility that additional taxes, and renewed taxes on certain, wealthy segments of the population, will be necessary.

It will be interesting to see how they deal with the puppy in the python, now and in the future. It is on its way through, and its arrival will be messy.

Karl Isberg

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