GenY – Think about It

When I was in grade school, we had the student candidates give speeches on what they would do if elected Student Body President or whatever other office they were running for.  I remember some candidates promising to make the drinking fountains dispense soda.  Since I liked soda more than the luke warm water that came out of the drinking fountains (they had no coolers for the student fountains, just the ones in the faculty lounge), I usually voted for the candidates who made this promise.

Sadly, I never once went to a drinking fountain and found Coca-cola or Sunkist coming out of the spigot.  Just the same luke warm water.

I soon came to realize that the Student Body President had no authority or capability to install soda in the drinking fountains.  Just because it sounded like a good thing to me didn’t mean that I would get it if I voted for them.  They were promising more than they could deliver.

Political candidates now are promising far more than they can deliver as well.  They are promising low-cost, universal, high quality healthcare, money for retirement, free student loans, free childcare (Headstart Preschool), long-term paid time off for maternity, low-cost prescription drugs for seniors, and many other benefits.  Generation Y seems to be getting sucked into this rhetoric.  For example, President Obama’s poll number rose quickly among the 20-29 year-old group when he promised to hold down student loan interest rates and simply forgive them after a period of time.

Generation Y (and Generation X), you should be the maddest people of all right now.  We are sitting on over $15 trillion in debt, with a couple of trillion dollars being added on each year, and you are going to be the ones paying for it.

The money to pay for these things will come from the general population – the 70%, not the 1%.  The idea that you could pay for everything by simply taxing some rich folks is laughable.  Even if you took all of the wealth of the top 1%, it would only pay a few percentage points off of the debt.  Everything that the government provides is paid for through taxes on the middle class – you are simply having them handle the logistics iinstead of paying for things directly yourself.  Also, the generation who allowed the debt to get to these levels is going to die off (or be living in retirement with no income), leaving you to pay for it.

The new “benefits” being promised should also not excite you.  The whole idea of the healthcare law is to have the young and healthy who use little healthcare (you) pay into the system just as much as older people using lots of healthcare to fund the healthcare of everyone else.  If you got back as much as you put into the system, it wouldn’t work.

Because, like social security, the program is a pay-as-you-go system (meaning that any money left over after paying for all of the healthcare of current enrollees is spent on other things in the general fund), the money you are paying into the system will be long spent before you need it.  You will be relying on others who come after you to pay for your healthcare.  If there is not enough money coming in, you will need to go without.  If they choose not to continue to pay into the system, you will go without.

Existing programs should not excite you as well.  The money paid in to Social Security and Medicare by those now retiring was spent long ago.  With a huge number of people retiring, you will be the ones “saving Social Security” and paying for their benefits.  Because there are more of them than there are of you, the amount you pay will likely go up and the amount of money spent on other things you do use, like parks, schools, and roads will likely decline.  You will be paying more than the last generation and receiving less.   Also, because you are vastly outnumbered, it will be difficult to change anything because the number of retired voters will vastly outnumber the number of young, working voters.  Plus, they actually vote, while you tend not to.  You will end up their slaves, seeing all of your disposable income and then some going to taxes.

Worst of all, it will be very difficult for you to get ahead as your parents and grandparents did.  By sending your money in and having services provided rather than paying for your own services individually, very little extra income will remain for you to invest and prosper.  You will have no choice on whether to live a healthy lifestyle and keep your medical costs low.  You will be paying more for gasoline, electricity, and food as the government uses inflation to reduce the amount it owes.  You will have little money left over from each paycheck after taxes and other expenses.

Right now if you were able to invest your Social Security taxes you would retire a multi-millionaire and make about ten times per month more than what you currently receive.  Likewise you will pay more for healthcare and receive less, more for education and receive less, and more for food, clothing, and transportation and receive less.  The idea that the little guy can’t get ahead that keeps generating votes for the tax-the-rich politicians will become a reality.

It is time to get mad and demand a plan be put in place to pay down the debt and ween the public off of the government tit.  You should reject any new proposition for the government to provide something you could provide for yourselves and cut as many programs that are doing so as possible.  This is a battle for your freedom and your quality of life.  It is time to stop voting for people promising soda provided by the drinking fountains and expecting anything but luke warm water.

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Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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