Only wars, royal marriages, coups and a few other major occurrences have caused large redistributions of wealth over history--think of the American revolution taking wealth from the United Kingdom or the Hapsburg royal family gaining wealth and land through marriage. But a redistribution of wealth on an unparalleled scale will start to occur in about 10 years and last for about 20 years. There will be lot's of dead bodies in this redistribution scenario but there will be no wars or coups. About 77% of the wealth in the US will be redistributed and probably similar amounts in other developed countries.
What is so earth shattering to cause this major, perhaps once in humankind occurrence...retirement and death from old age. Yes, just plain old retirement and simple death from old age of the largest and wealthiest generation in history--the Baby Boomers. Born between 1946 and 1964, the first of the boomer generation are now hitting 65 years of age. As boomers start to retire they no longer will be accumulating wealth and will be spending it, mostly to the benefit of younger generations. But more significantly, if you assume the average human lives between 75 and 85 years, the boomers will start dying off in significant numbers in about 10 years and most will have died 20 years thereafter, leaving their wealth to be be redistributed.
The boomers benefited from the greatest wealth creation period in history and amassed an disproportionate amount of the wealth. It's estimated boomers have 77% of the financial assets in the US but represent only 28% of the US population. Conversely, boomers also are responsible for authorizing and/or benefiting from much of the national debt accrued by the US government over the last few decades.
While healthcare spending will increase by boomers, most of the cost will be burdened by medicare, thus causing even more debt to be incurred. The voting and financial power of boomers will prevent politicians from making any significant changes to medicare and social benefits, so US government debt levels will probably increase even more over the next few decades (if the global economy can absorb it).
Thanks boomers...you generated more wealth than any generation in mankind but kept it mostly to yourself and you'll leave us with more debt than any country has ever accrued. It seems like the social revolution the boomers lead in the 60's was really a failure--selfish, short-sighted, non-communal behavior became the norm in the 80's that has been and will continue to be an economic nightmare and their children they leave behind (the y generation and millennials) have a high sense of entitlement, poor work ethics, lack of creativity, and short attention spans. Fun times ahead!
So what does this redistribution mean for the economy? Other generations? The government? I was surprised to find so little written about this coming redistribution. Will estate taxes collected from the redistribution be enough to pay off much of the government's debts? What will the younger generations do with the money they inherit? Spend it? Reinvest it? Will the boomers spend most of their wealth before death due to their traditional overly consumeristic behavior? Will the redistribution cause the middle-class to grow again?
Tell me what you think...
