Baby Boomers control over 70% of the US economy. They have all the money. For the most part, SAVED UP. With no interest from CD’s or Savings, no safe investments, and deep fear of the stock market, they hold their money tight to their vest. Can the economy come back without the ‘boomers?’
Yep ‘Boomers’ are from 40′ to 60′s today. Some are already retired. Many own the major business concerns in this city and around the nation. They are the C.E.O’s of well over half our companies. Yet their spending habits have dropped way off. Why? Fear. They saw their stocks and 401K’s take huge hits these past ten years plus. Their CD’s pay almost nothing. Their children are in college or into the beginnings of their chosen fields. They are most of our nations ‘rich’ folks. Guess what, most of them feel they are nearly BROKE. Their bills are higher than their income. NO not all, but the majority. If they don’t spend,travel, go out or buy new homes, our economy may be on lock up.
You say ‘not true.’ Let me ask you this: Think of those you know who fit this picture. Almost all of them are still in that home they bought years ago, are saving for the future so their kids will have a nice payday when they are gone. The late middle agers worry about their health, are very interested in their medical situation, health and staying younger. It’s true for most it’s just in their heads. Lots of talk and not much action. One thing is for sure, they ‘ain’t’ spending any of those hard earned savings dollars anymore.
Sure the wife uses the credit cards, that helps, but even those days have limits. Vacations are way down. We live longer and most feel with little new income, the savings is for ‘old age and the kids.’
I have a few good buddy’s that have well over a million bucks in the bank. NONE of them will go on any meaningful vacations, rarely go out for anything past an early meal in the neighborhood and talk about doing all this in the future. WTF. The future is behind you people.
Example: I have a close friend who has 2 million in green backs put in the bank. He owns his home, paid for, is in great shape, divorced, has two grown children that are in fine jobs, but complains daily that he is broke. I asked him to go on a fun vacation with me several times and several locations. “No I can’t afford that right now, maybe in a couple years when my kids are better set and I’m not so busy with work.” He is semi retired, a millionaire and drives a leased two year old middle of the road car, lives in the home that he bought in the late 70′s and is always planning to move to a warmer, more exciting city. The guy has realtors in three cities sending him prices and locations for a ‘new’ home. He will never move to any other city or ever sell the home he is in until they put him in the old folks joint. By the way his ex wife is worth ten times his money, his kids are in better shape then he ever was, doesn’t matter….’saving for the future.’ Does this sound familiar?
Clearly banks will have to loosen up credit, big time, for the economy to really grow. CD’s have to have value and pay at least 4-6%. It’s true that people with less income and savings go out more, travel more and based on their personal self worth, spend more. I guess they are younger and feel, ‘what’s the difference.’ No they don’t go to exotic places but they will go somewhere.
I don’t see how this economy can really improve without the boomers feeling safer about their bank accounts. These Americans must start living again. They need to enjoy their hard earned dollars to a much greater extent. I believe they would if banks were paying them like they used to in the 90′s. It seems to me we need to open up credit for housing, credit cards with much lower interest rates and yes go back to some of the things that got us in this mess. Just be more careful. There is a happy medium. Giving back nothing on savings is NOT THE AMERICAN DREAM. It’s the American nightmare. It has not worked. We need everyone involved. Just because we get the national debt down does not mean people will go out and spend money again. The individual needs to feel he has protection and income.