So, I just watched the 30 minute version of “I.O.U.S.A.”, a documentary about the Federal debt. It was mixed – I enjoyed parts of it, they have some excellent high profile interviews, etc. I’m not super impressed with how they treat Medicare (minimal discussion, even though it supposedly makes up over half of the US Gov’ts liabilities right now), and I think they didn’t do a good enough job pointing out Republican (e.g. Reagan, Bush II) hypocrisy on budget deficits and the connection to increased debt.
In any event, I was thinking about the impending retirement of my parents’ generation and what that will mean for me and for the Federal debt. Personally, I will likely be entering the academic labor market in 5 years or so, and so if the baby boomer professors would start retiring en masse, that would be much appreciated*. On the other hand, the demographic shift in the U.S. towards more retirees and fewer employees is why Medicare and social security have such large forecasted shortfalls. Ok, so far nothing new here. But what impact will the financial crisis have? The Dow is sitting around 8600 right now, off from a high of over 14,000 in October 2007. For my parents, and many others near their age, the sudden reduction in savings invested in the market could delay their retirement for several years. So, I wonder, will the financial crisis end up ameliorating (albeit only a small amount) the fiscal crunch created by the baby boom retirement?
* Although, worryingly, professors seem much less inclined to retire at 65, 70, 75 or even 80 than almost anyone else I can think of. Well, except Senators**.
** And Supreme Court Justices, of course.