Those of you who made it through your youth during the late 1960’s and 1970’s, like I did, probably remember a song released in 1977 by Crosby, Stills and Nash called “Just A Song Before I Go.” While it wasn’t one of their biggest hits, it did make it up the charts quite a ways. Well, I’ve been suffering a bad case of writer’s block lately and I’m leaving for a conference in San Francisco and I need “Just A Blog Before I Go.” So, hopefully a little karma from Dave Crosby, Steve Stills and Graham Nash will help.
You know what’s really bothering me lately? It’s the fact that when I look at my kids and grandson, I don’t see them having as good of a standard of living as Deb and I do (and we’re not wealthy). My son has a bachelor’s degree and has been producing TV news for 10 years now. My daughter-in-law holds a Master’s degree and while she is a home mom now, if employed, I still don’t think their combined lifetime wages will get them a standard of living equal to ours. First off, kids in this generation are coming out of college with a tremendous debt burden due to the ease and abundance of student loans. This causes them to delay in accumulating assets such as a house or setting aside money in savings and investments.
Another thing they can look forward to is stagnant wages. The American worker is the highest paid worker in the world. Since labor is a commodity and if skills and such are equal, it will go to the least expensive source. Until we can produce higher quality products that the world wants and can afford, jobs here will continue to be lost to overseas competitors and we’ll have an abundance of unemployed workers, keeping wages stagnant.
Taxes are another reason that my kids’ standard of living will be lower. Due to a lot of factors over the past 50 years we’ve accumulated more debt than I can even imagine. And we’re not done yet. Our entitlement programs are continuing to expand. More people qualify for food stamps now than ever before. Medicaid enrollment is up significantly thanks to the Affordable Care Act (Obamacare to some of you). Plus we’re giving tax subsidies on health insurance premiums to millions of others. Not only is the next generation, and the one after that and the one after that and so on, going to pay higher taxes to cover the interest on the debt (much less pay down any principal) and the cost of all these welfare and entitlement programs, but there may come a time when they are paying high taxes and all the entitlement programs come to a screeching halt because no one will loan the U.S. any more money. (Think Greece a couple of years back).
It’s sad that we (and a couple of other generations) have put them in this position and it’s even more of a crime that our leaders just keep moving us down this path. The Greatest Generation (those that fought in WWII) is nearly all gone now. Maybe my kids generation will wake up and come together to fight the battle to rein in spending and become known as the Smartest Generation.
Mike Berry is a Registered Representative offering securities through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Legacy Wealth Management, LLC and Cambridge are not affiliated. Cambridge does not offer tax advice.
Copyright ©2014 Mike Berry. All Rights reserved. Commercial copying, duplication or reproduction is prohibited.
