…Then wonder no longer.
Annie Lowrey, “Younger Generations Lag Parents in Wealth-Building,” The New York Times.
A new study from the Urban Institute finds that [people] up to roughly age 40 have accrued less wealth than their parents did at the same age, even as the average wealth of Americans has doubled over the last quarter-century.
Because wealth compounds over long periods of time — a dollar saved 10 years ago is worth much more than a dollar saved today — young adults probably face less secure futures for decades down the road, and even shakier retirements.
“In this country, the expectation is that every generation does better than the previous generation,” said Signe-Mary McKernan, an author of the study. “This is no longer the case. This generation might have less.” The authors said the situation facing young Americans might be unprecedented. [Emphasis LSTB]
More accurately, most people in this generation will have less. Some people will inherit vast fortunes because some wealth is zero-sum, like land. The Urban Institute, much less the Times, won’t say that existing wealth has been redistributed to a handful of war generationers and boomers, even though they know that average wealth has doubled over the last 25 years. Rather, they believe that we’re failing to create the economic conditions that enable young people (now redefined as “under 40″) to thrive. To them, people work to accumulate wealth and hooray! We have more than people our age did thirty years ago. It’s magic.
And since magic is a fiction, so too is “upward mobility” a red herring concept. You can’t be upwardly mobile in a world of fixed opportunities and growing populations. This is why I think “young” Americans in particular should tune in to Henry George because they can expect to pay the following fees for the rest of their lives:
- Federal income tax (the all-time number one)
- FICA (probably worse than federal income tax, but no one cares)
- State income tax (usually)
- State and local sales taxes (almost assuredly)
- Local income tax (all too often)
- User fees (Go-Go Gadget transit hikes)
- Student loan graft (the crowd pleaser)
- All kinds of other windfalls, e.g. hospital chargemasters, patent rents, and interest on public debt for wars to spread democracy by shooting people
Do the monopolists pay these? Yes, but they get the rents and windfalls, which more than offsets the other costs.
Young Americans have the following options:
(1) Wait for their aging war generation or boomer parents to die and liquidate their assets (if available)
(2) Make way for the new aristocracy (if the previous option is unavailable or insufficient)
(3) Sail away
(4) Demand a tax shift
Me, I’m for the tax shift. The people interviewed by the Times should be too.