What incentive do we have then, to not forcibly extract that wealth from the previous generation? To me it seems that if we need to de-leverage, why on earth should we pay these people their pensions? All the intergenerational trust and good faith is already gone anyway.
Note: the views casually related above may or may not represent the actual considered opinions of the management.
>"What incentive do we have then, to not forcibly extract that wealth from the previous generation?"
We do have the incentive. And we will extract that wealth. But it takes time, since "they" currently have the political power.
What you describe is what is happening in the real world. Reform everywhere so they get the pensions and benefits, but nobody after them will. This is happening both publicly and privately. Even unions are stiffing new members.
We'll have the last laugh, though. Eventually the boomers will need to divest. At that point they'll find out we don't have the money to buy their assets.
>We'll have the last laugh, though. Eventually the boomers will need to divest. At that point they'll find out we don't have the money to buy their assets.
Hadn't thought of that. Might be quite funny...
I suppose they'll just give it to their offspring. So for now... kill rich kids? Just brainstorming here.
It's interesting. I believe it's going to be a crisis, at least here in Canada, where our boomer bulge is the largest in the world.
Much like our southern neighbours, our soon-to-be-retirees don't have much in savings, and the vast majority of their net-worth is tied up in their homes. Unlike the US, we haven't had a housing price adjustment yet. So these boomers are counting on having the current value of their home as their future retirement fund. But as we've learned, that number may as well be fairy dust until someone hands you a cheque.
So what happens when these boomers go to retire, and they find out nobody can afford (or wants) to buy their $500,000 McMansion? When every boomer actually has half, or worse, the amount of money to retire as they thought?
Note: the views casually related above may or may not represent the actual considered opinions of the management.