Baby Boomer Time Bomb

     Earlier today, the Department of Commerce released the 2012 Quarter 4 GDP report. GDP showed a decline in economic output driven primarily by a 22 percent annualized decrease in defense spending. Despite sharp decreases in defense expenditures, new revenues accruing from a return to economic growth and the revenue effect of tax hikes that went into effect on January 1, the 2013 Federal deficit will nudge up against a trillion dollars, reflecting the immense burden of entitlement spending.
     Social Security and Medicare are the most expensive entitlements. Because the first baby boomers turned 65 in only 2011, Social Security and Medicare spending have just begun to surge. As the immense baby boomer cohort ages (5-year cohorts grow from around 10 million to near 20 million, see table below) retirements will cause massive increases in the number of beneficiaries on the Medicare and Social Security rolls. 
     There is no avoiding the entitlement tsunami. But you don’t care and the President you elected doesn’t care. You want to pass these costs along to your children until they finally wake up to reality and rebel. Party on seniors and enjoy the munificence while the getting is good.

US Population By Age 2011

Source:  US Census Bureau

(000s)

 

	Age	Both sexes
		Number	Percent
	All ages	306,110	100.0
	.Under 5 years	21,265	6.9
	.5 to 9 years	20,870	6.8
	.10 to 14 years	20,020	6.5
	.15 to 19 years	20,886	6.8
	.20 to 24 years	21,525	7.0
	.25 to 29 years	21,382	7.0
	.30 to 34 years	20,202	6.6
	.35 to 39 years	19,255	6.3
	.40 to 44 years	20,587	6.7
	.45 to 49 years	21,989	7.2
	.50 to 54 years	21,965	7.2
	.55 to 59 years	19,554	6.4
	.60 to 64 years	17,430	5.7
	.65 to 69 years	12,160	4.0
	.70 to 74 years	9,254	3.0
	.75 to 79 years	7,088	2.3
	.80 to 84 years	5,719	1.9
	.85 years and over	4,957	1.6