Milennials

[eyeball]

If I was a Millennial I'd be telling whoever let the boomers rack up so much debt to go talk to the boomers about it and leave Millennials out of it.

The advice I give Millennials is to screw us before we screw you, and we will.

[Moonlight Graham]

If I was a Millennial I'd be telling whoever let the boomers rack up so much debt to go talk to the boomers about it and leave Millennials out of it.

The advice I give Millennials is to screw us before we screw you, and we will.

If millennials force boomers to pay back the debt then millennials will have no inheritance. So looks like they're screwed either way. Maybe millennials should support lots of immigration from the Muslim middle-east, make them pay for it, then deport them all because of "anti-Muslim nationalist fervor".

[eyeball]

It may well be the only way to maintain the inheritance is to behave in the same manner it took to create it.

It'll take an even more egregious attitude to deal with the deficits in natural and social capital.

I'm looking forward to being at the tail end of the boomer generation with a little trepidation myself.

[msj]

Well yes millennials will inherit the assets and the cascading benefits that all that debt bought, but they also will have to pay off the debt and the interest payments while boomers will have to do neither. So somebody is getting a free lunch.

Maybe millenials will just pass it on to their kids/grandkids. But at some point sh!t will hit the fan and the debt will need to be paid off. Whichever generation(s) have to do that, well they're screwed.

You clearly don't understand time value of money and the relationship between assets, liabilities, revenues and expenses.

You forget that gen x and millennial get to use highways, schools, universities, hospitals, bridges etc etc that were built 1/10/50 years ago.

If you can't factor into your analysis the benefits of existing assets as you blame someone else for getting a free lunch then you just are not getting it. Period.

Oh, and no, the debt does not need to be paid off. It just needs to grow at a lower rate than economic growth (and even that depends on the stage of the economic cycle).

Assets grow while debt grows. It's an important correlation to understand.

And no, this does not mean we go out and borrow a ton of money. Of course there is a limit to effectively grow an asset base and get a decent IRR from that debt. No one is claiming we borrow to the sky.

But right now with low interest rates, crumbling infrastructure and a private sector that is far too heavily indebted - well, the government better be thinking about picking up the slack when private demand falls off a cliff in Canada because too many people just had to own too much house and have racked up huge debt to get it.

And that can benefit every generation.

[bush_cheney2004]

It may well be the only way to maintain the inheritance is to behave in the same manner it took to create it.

It'll take an even more egregious attitude to deal with the deficits in natural and social capital.

Boomers did not invent inter-generational "theft"....the self congratulatory "Greatest Generation" (don't know what they are called in Canada) set themselves up very well after living through far more significant world cataclysms.

I'm looking forward to being at the tail end of the boomer generation with a little trepidation myself.

It's great ! Being a middle Boomer myself and recently retired, I would have to buy a brand new Porsche 911 Carrera S each and every year to screw up my retirement portfolio. Boomers rule !

[Moonlight Graham]

You clearly don't understand time value of money and the relationship between assets, liabilities, revenues and expenses.

You forget that gen x and millennial get to use highways, schools, universities, hospitals, bridges etc etc that were built 1/10/50 years ago.

If you can't factor into your analysis the benefits of existing assets as you blame someone else for getting a free lunch then you just are not getting it. Period.

Yes, I agree, that's what I meant when I said "Well yes millennials will inherit the assets and the cascading benefits that all that debt bought".

Oh, and no, the debt does not need to be paid off. It just needs to grow at a lower rate than economic growth (and even that depends on the stage of the economic cycle).

Assets grow while debt grows. It's an important correlation to understand.

At some point, debt can become a bad deal when you factor in the interest you have to pay on top of that debt...which only adds to the debt and the interest to be paid.

Keynesian economic theory WWII era meant for it to work work this way: during the bad economic times (recessions), you lower interest rates and you run deficits to help spur growth and jump-start the economy, and then during the good times you raise interest rates again and run a surplus in order to pay back the debt incurred during the recession. We were mostly doing that until Trudeau and Mulroney thought it a great idea to just keep running deficits in the good times too, and the voters loved the handouts and didn't want to give them back.

It's very scary to think that Canada and the US's GDP growth rate has been declining slowly but steadily over the past 50 years, but both countries have taken on more and more public and private debt in order to maintain that minuscule yet declining economic growth. Our economy is largely and increasingly driven by debt. That is, we don't really own much of anything anymore, we're living a fantasy land, and much of that is also to blame on the younger generations too, who want to own a home, a nice car, travel the world etc. just like they did in their early 20's living with their parents but not put in the decades of wealth-building their parents had to do to get to that point, but instead slap it on their credit cards in order to enjoy that high standard of living they're accustomed to. One day sh!t is going to hit the fan and the economic bubble will pop. This is not sustainable.

Edited September 28, 2016 by Moonlight Graham

[kimmy]

You forget that gen x and millennial get to use highways, schools, universities, hospitals, bridges etc etc that were built 1/10/50 years ago.

Ok, and since you're the accountant here, can you now factor depreciation into that analysis? Infrastructure build back in the free-spending hey-day of Boomer Fun Times is now crumbling due to the spending cuts of the past 20 years.

Hospital beds and schools now being shuttered due to cost-cutting measures, tuition fees in Canada have gone up by a real-dollars factor of 4 or 5 in the past 20 years... this great infrastructure that we've been handed down by the Boomers reminds me of my first car, my mighty Dodge Reliant that was older than me and needed continual maintenance to keep functional.

-k

[bush_cheney2004]

... this great infrastructure that we've been handed down by the Boomers reminds me of my first car, my mighty Dodge Reliant that was older than me and needed continual maintenance to keep functional.

Perfect example of Millennial entitlement expectation....they want an Audi A4 !

[msj]

Sure there is depreciation/amortization that needs to be considered.

But look at a highway: you have the base level which is graded and allows the other layers to sit on top of it.

That lasts what? 80 years? 100?

Then it's just maintenance after that.

Pure economic benefits flowing from that highway everyday that we take for granted.

I'm sure 50 years ago people took for granted the infrastructure then.

But a lot of it was built on the boomers watch and historically ignorant punks seem to forget that part too.

[Smoke]

Hospital beds and schools now being shuttered due to cost-cutting measures, tuition fees in Canada have gone up by a real-dollars factor of 4 or 5 in the past 20 years... this great infrastructure that we've been handed down by the Boomers reminds me of my first car, my mighty Dodge Reliant that was older than me and needed continual maintenance to keep functional.

-k

But Kimmy, why are you blaming boomers for that? Let's get to the real problems....one is public service unions and their overly generous benefits. Anyone in private industry will tell you that one of their biggest costs is employees and benefits. Yet public service unions do not play by the supply/demand rules, they hold governments hostage and rape the taxpayer instead. Another one is gov't. waste on ridiculous programs and overpaying their political donors for various projects.

p.s. did you not factor in the costs of maintaining that old reliant, when you decided it was too expensive to buy a newer vehicle?

[cybercoma]

Perfect example of Millennial entitlement expectation....they want an Audi A4 !

Right, because the "logical" alternative to a car that requires constant maintenance is a luxury car. Kimmy really sounds like the type to want to roll around in an Audi A4. Have you ever read her posts?

[dialamah]

But Kimmy, why are you blaming boomers for that? Let's get to the real problems....one is public service unions and their overly generous benefits.

Having now worked in both the public sector and the private, I can tell you that the public sector benefits aren't significantly different than what I was getting in the private sector. The pension benefit in the public sector is different: it takes about the same off my check as what I paid in the private sector, although it's not voluntary. Both employers match my contribution, but I don't know if the outlay for the employer is any different. I do know that I'm putting about the same amount away for retirement. I'm also making considerably less than what I made previously, and the CoL increase won't be as high as it was in my previous job. After hearing all my life about the great-paying government jobs with great benefits, I have to say the reality is not quite so rosy, so much so that I'm looking for a second job.

Of course, my experience may be atypical, but from talking to workmates, they believe they could do better in terms of wages and as well as benefits in the private sector. Pension benefits for long-term employees are no doubt also important, but no-one I talked to specifically mentions that. They do specifically mention feeling like work in government is more meaningful than work in private sector and for the ministry I'm in at least, the work atmosphere is great. For younger employees, there is also a lot of opportunity and support for growing your career without having to change employers, too.

[BC_chick]

Sure there is depreciation/amortization that needs to be considered.

I would never argue for the ridiculous notion of a loose term like a 'generation' carrying its own debt, but you do have to consider that budget deficits were not entirely investments. They also included period costs.

[msj]

I would never argue for the ridiculous notion of a loose term like a 'generation' carrying its own debt, but you do have to consider that budget deficits were not entirely investments. They also included period costs.

Yes, of course,

Operating deficits have been incurred in the past, in the present (even under Harper) and will be in the future.

The key is to keep the balance between operating deficits, infrastructure deficits (which don't get reported on very often), tax revenues and tax mix, and spending (operating and capital).

Which means understanding things like assets, liabilities, revenues, expenses, projected cash flows etc etc.

I think very few on here, in this thread, are able to do a very good job of this for their personal finances never mind for a business or government operation.

Yet, here people are talking about it and then conflating it with time periods that span decades and multiple generations of people as if there is not too many parts for anyone but some kind of autistic rain man like genius to fully understand.

My point being: everyone talks about debt and deficits while completely ignoring the asset side.

If one is unable to bring that side into focus then that person deserves to be ignored for not even attempting to glimpse a very small piece of a very complicated puzzle.

Yes, you have caught me again with my sneering contempt but there it is.

[Argus]

Two of your sentences don't make sense. First you say boomers built schools and paid for them and then you said they didn't want to pay for them so they didn't build them. Which is it?

Read again. The Boomers' parents built schools. The Boomers weren't interested.

So I guess the thing to do was to vote in Justin Trudeau who will push our deficit to $30B+.

You must have mistaken me for a Trudeau supporter. I never supported his father and I don't support him.

[Argus]

Sure there is depreciation/amortization that needs to be considered.

But look at a highway: you have the base level which is graded and allows the other layers to sit on top of it.

That lasts what? 80 years? 100?

Then it's just maintenance after that.

Pure economic benefits flowing from that highway everyday that we take for granted.

I'm having a hard time remembering what great infrastructure projects the boomers launched. Maybe you can refresh my memory.

Seems to me that the roads and bridges their parents drove on were paid for by - their parents. Their parents didn't pass the bill down onto the boomers. Seems to me their parents also left the boomers a nice inheritance in the case of the middle and upper middle class, even though they paid their own way in life.

Most of the money the boomers ran up wasn't to pay for infrastructure. It was to give their society social benefits while not paying for them. And since social benefits are an ongoing cost the generations after the boomers not only have to pay for them now, but have to pay for the debt the boomers ran up to fund them in their own time.

[Argus]

But Kimmy, why are you blaming boomers for that? Let's get to the real problems....one is public service unions and their overly generous benefits. Anyone in private industry will tell you that one of their biggest costs is employees and benefits.

Virtually everyone in the Scandinavian countries has better benefits than Canadian public servants, and somehow the Scandinavians have afforded that for decades. How come we can't?

[Smoke]

Read again. The Boomers' parents built schools. The Boomers weren't interested.

You must have mistaken me for a Trudeau supporter. I never supported his father and I don't support him.

You are correct, I read it wrong. I know you are not are not a Trudeau supporter. It was meant collectively. As in here we are complaining about burdening our kids with debt and yet Justin Trudeau and his pledge to balloon the deficit to $30B gets voted in.

[Smoke]

I'm having a hard time remembering what great infrastructure projects the boomers launched. Maybe you can refresh my memory.

Seems to me that the roads and bridges their parents drove on were paid for by - their parents. Their parents didn't pass the bill down onto the boomers. Seems to me their parents also left the boomers a nice inheritance in the case of the middle and upper middle class, even though they paid their own way in life.

Most of the money the boomers ran up wasn't to pay for infrastructure. It was to give their society social benefits while not paying for them. And since social benefits are an ongoing cost the generations after the boomers not only have to pay for them now, but have to pay for the debt the boomers ran up to fund them in their own time.

Yeah I'm a tail-end boomer and my nice inheritance was $6500 stop the presses! But I do agree that in addition to salary/benefits for public servants and pet projects for political donors (on both the left and right) that social benefits programs are helping push our debt further.

[Smoke]

Virtually everyone in the Scandinavian countries has better benefits than Canadian public servants, and somehow the Scandinavians have afforded that for decades. How come we can't?

Not disagreeing but I would like to a cite for that.

[eyeball]

Which means understanding things like assets, liabilities, revenues, expenses, projected cash flows etc etc.

I think very few on here, in this thread, are able to do a very good job of this for their personal finances never mind for a business or government operation.

There are even fewer who seem to know what natural capital is.

[Benz]

Perfect example of Millennial entitlement expectation....they want an Audi A4 !

You are outdated. They want a Tesla

I think blaming one generation for everything is a clear abuse. It's the divide and conquered approach to make a diversion on the real source of the problem.

[BC_chick]

Most of the money the boomers ran up wasn't to pay for infrastructure. It was to give their society social benefits while not paying for them. And since social benefits are an ongoing cost the generations after the boomers not only have to pay for them now, but have to pay for the debt the boomers ran up to fund them in their own time.

I'll entertain you. How do you propose we make a 'generation' pay for its own debt?

Do we go by age? Voting age? Do we exempt those that did not vote for the party that garnered the deficits? Do we factor in the social services each member of the generation used?

Generations are loosely defined, the continuity isn't easily defined. How do you think it'll work out?

And lastly, are you willing to take your share of the Harper deficits because I don't think I should have to since I never voted for him.

[BC_chick]

I think very few on here, in this thread, are able to do a very good job of this for their personal finances never mind for a business or government operation.

Yet, here people are talking about it and then conflating it with time periods that span decades and multiple generations of people as if there is not too many parts for anyone but some kind of autistic rain man like genius to fully understand.

My point being: everyone talks about debt and deficits while completely ignoring the asset side.

If one is unable to bring that side into focus then that person deserves to be ignored for not even attempting to glimpse a very small piece of a very complicated puzzle.

Yes, you have caught me again with my sneering contempt but there it is.

Agreed on everything. I was just nitpicking because while demonstrating the asset side of things, it seemed you also ignored the expense side.

Also, I think you took my post about ageism and contempt the wrong way. I think this thread started off on a ridiculous premise and the fact that the OP didn't even stick around shows a bit about their modus operandi.

I was just stating that IMO it would have been better to ignore it than get baited into throwing back insults.

On proving ignorance wrong - contempt away. I enjoy reading your posts.

Edited September 28, 2016 by BC_chick

[?Impact]

why was Harper's proposed legislation limiting deficits to $3B ridiculed soundly by the left?

Anybody that runs up the worst deficit by far (almost twice any previous one) and then attempts to control future governments deserves ridicule.