Nearly five years ago MIT Press published "The Coming Generational Storm," a book I co-authored with economist Laurence J. Kotlikoff. We shared a deep foreboding about the implicit debt of our government and the burden it put on the young. We thought tough times were coming.
And they have.
But there is a silver lining--- if we are daring enough. Listen to this recent interview with professor Kotlikoff.
Kotlikoff: Our fears have been confirmed. The country has entered a great depression. Fortunately, the depression is mental, not economic. So far the nation has lost its mind, not its wealth.
What do you mean, the nation hasn't lost its wealth? House prices have fallen by one-fifth. The stock market is down two-fifths since last October!
Kotlikoff: Look around. You'll see the same equipment, factories, and office buildings we had a year ago. You'll also see the same people with the same skills available to work with these tools.
But the stock market drop has wiped out the savings of millions of Americans.
Kotlikoff: Yes, and that's horrible. But the economy's real wealth hasn't changed.
If total wealth hasn't changed and tens of millions are poorer, who's richer?
Kotlikoff: Current and prospective buyers of houses and stocks can now buy up these assets at deep discounts.
But this isn't fair-- the sellers are old and the buyers are young.
Kotlikoff: Nothing is fair in love or money.
http://assetbuilder.com/blogs/scott_burns/archive/2008/10/31/social-security-for-the-young.aspx
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