Ich bin ein Boomer. The most privileged, most profligate generation in human history – my generation, the baby boomers (most often defined as those born 1946 to 1964) – drove the world for the past decade to this moment of reckoning, running up a gigantic bill that has now come due. Responsibility for this bill lies mainly with the boomer-and-bust generation, but the cost will be borne by all.
The three great economies of the advanced world – the US, the European Union and Japan, with their 940 million people – did not get to the level of debt stress and wealth destruction we are witnessing without being made to pay a real price. That price is structural change, a decline in expectations and lower living standards.
We will see a return to the more frugal times of previous generations, when expectations were lower, houses were smaller, and consumption was fuelled by what we could afford, not what we could borrow.
Economies do not spend and borrow their way out of problems caused by spending and borrowing, especially when much of the borrowing was used to fund consumption and a culture of entitlement. The process of restoring the overall balance sheet of the West will take time. Japan was first to inflate an asset bubble and its economy has been stagnant for more than a decade.
We are now in the fourth year of a financial contagion that began in the US in 2007, spread to western Europe and, because of political failure on all sides of the Atlantic and Pacific, is larger now than when the global financial system melted down briefly in 2008.
That crisis was urgent and dramatic …
Read more: http://www.theage.com.au/opinion/politics/greed-of-boomers-led-us-to-a-total-bust-20110925-1krki.html#ixzz1Z0BtOsnd
