[Zyst]

That's an interesting take I haven't heard ever before. I'd love to ask some questions if you happen to know the answer:

- Since people are constantly retiring, and selling the stocks they are holding at that point: Wouldn't that balance out the limitless demand problem? Boomers/Gen X/Millenials/Gen Z all have around the same segment of the population according to (https://www.statista.com/statistics/296974/us-population-sha...) wouldn't things earlier generations sell get distributed among the next generation, preferentially going to Gen X who will be at their peak earning potential at that point. (Which in turn will sell to Millennials and so on) - How would you actively force money into an economy?

[di4na]

1. They don't sell that much, and more importantly they sell at a far higher price because the market went up. So they comparatively sell more. Studies we have on older people is that they do not actually liquidate theory holdings. What they do is get more loans to invest in rent, backed by their holdings. Or they reduce their money need, by stopping investing in their holdings.

2. Most Boomers are only starting to retire. And they have enormous needs. Plus university endowments, charities funds, etc also are institutional investors. The problem is do they sell. These days usually they only sell to shares buybacks, which actually reinforce the problem.

3. Move pensions to a government tax funded redistributive system, so the income of today pay the pensions of today. Tax land and housing ownership heavily, except for primary house (with a limit based on family size probably for primary house). Heavily (massively. Like 90% at least) tax inheritance. We have good economics support for these, even in heavily capitalistic and neoliberal economic circles. The problem is political. The Boomers will not vote for it, it would take away from them.

[throwaway5959]

I’ve only worked for 15 years but I already know if the inheritance I’ll be leaving to my nieces and nephews will be taxed at 90% I will just retire sooner. And I’m center-left.

[di4na]

That is not a problem. As long as you spend that money.

Our problem right now is that the money is not spent. The earlier you retire to spend it the better we are as an economy. So yes. Go for it. That is the point :)

[jjav]

> The earlier you retire to spend it the better we are as an economy. So yes. Go for it.

A problem in the US is that the system essentially forces people to hoard more and more and more because there is no useful social safety net. So you are forced to constantly think what if. What if I live longer than average? What if there are unexpected expenses? So the only responsible answer is keep working and hoarding for those what ifs. It's not a healthy system since it encourages the hoarding but also because it prevents people from enjoying a longer retirement.

[throwaway5959]

It’s weird that not spending every dime you make is being characterized as hoarding. My wife and I spend to our level of wants and needs and invest the rest. We’re not hoarding, we’re planning.

[jjav]

> It’s weird that not spending every dime you make is being characterized as hoarding.

That's not at all what I meant. Maybe hoarding is the wrong word, couldn't think of another one. Saving is great, but what is the amount one needs to save?

What is your target amount in investments to be able to retire?

What I mean is that in the US there is a neverending pressure to save more and more because you never know what might happen and there is no social safety net so it's all on you. So you must keep working and saving to cover every conceivable future edge case, so it feels like no amount will ever be enough.

[wonderwonder]

How do you prevent massive inflation as everyone dumps their money into buying goods and services instead of saving? Kind of like we have going now after the covid money and economic boom

[di4na]

You invest in productivity. The inflation is due to a sudden spike in consumption after decades of limits.

[prennert]

Or you start giving earlier (depending how presents are taxed), and your nieces and nephews receive the support when they are young and strapped for cash. I think this would help stimulating the economy much more than if your heirs are in their 50s+, when they (on average) don't need any money and just keep hording it.

[throwaway5959]

I’m not hoarding anything. They’re getting checks regularly. They’d be getting a lot more if I weren’t taxed at obscene rates relative to billionaires.

[wonderwonder]

I'm not a boomer, and there is no way I would vote to tax what little I am able to leave my children at 90%. I got nothing from my parents and worked hard since i was 15 to scratch out an existence and provide more for my kids than I got. Not a chance I think that the government can do a better job for my kids with what I was able to save by throwing it into a pot than I could

[di4na]

Note that the goal is not for the government to get it.

The goal is for you to spend it. Because hoarding it like this to pass it to your children actually make it harder for them to have a good life and for the economy to grow.

[throwaway5959]

How do you think intergenerational wealth is created? Most people don’t work hard to make the economy perform better, most people work hard to provide for themselves, their family and (through charity) their communities.

[di4na]

Yes. That is the whole point. It makes it worse. I understand wanting it. I understand how we cannot do it.

But i can also promise you that the economics are definitely supporting this reading.

[wonderwonder]

Your argument is that if I give my kid 100k they will be worse off for it? Does this scale? So if someone gives their kid a million will their kid be 10x worse than mine? How about a billion? Sorry friend, this argument does not really land.

Your argument also fails to account for inflation. More money spent instead of saved means more competition for the same amount of goods and then we get what we have now, increasing rates and cost of goods.

[cagey]

> And [Boomers] have enormous needs.

I extrapolate this to be saying "Compared to other named generations, Boomers have much higher per capita needs". How so?

Or are you rather saying the size of the Boomer generation, being enormous, causes them to collectively have "enormous needs"?

[di4na]

The second. The cost of the aging of such a large cohort will have massive effect on the economy. For western europe, current estimates is that a quarter to a third of the workforce will be in direct support and aid of old people. Caregiving. These jobs are badly paid, highly dangerous (yes).

On top of this, their healthcare will also heavily tax the healthcare system.

Both combined will generate a heavy toll on the economy. Faaaar worse than what Japan have been dealing for.

And yes. They also expect far higher standards of living than in the past.