The evidence is piling up that pre-baby boomers and the older baby boomers lived through the best time in America’s history if measured by the success rate in living the American dream and being able to comfortably retire while they still enjoyed good health ( often at ages 58 to 60). This article at Zero Hedge reports on a recent Gallop poll showing the average retirement age has hit a record high. Take a look at this graph. It shows in grey the increase in the workforce of people over 54 starting in 1999 to 2013 and in red the same information for those under the age of 55.
The Gallop poll asked the question; At what age do you expect to retire? Here is the result.
The article seems to put the fault for this situation directly on the worker by pointing out:
… the typical worker near retirement only has about 2 years of replacement income saved, or about 15 years short of the median lifespan post-retirement.
This humble observer of the asylum we all have live in doesn’t dispute that Americans in general have been poor savers. But, Asylum Watch believes that the fiscal and monetary policies of our federal government have made it hard for the American worker to save. Monetary policies have always been set to be at least slightly inflationary and inflation is always higher than our government claims it is. Since the Great Recession of 2008, the Fed’s Quantitative Easing Policy include keep interest rates near zero (ZIRP). ZIRP punishes savers and encourages taking on debt. And then, there is fiscal policy that adds to the cost of living of the American worker. For example, President Obama is keeping his promise to make electricity cost skyrocket through government regulations. Let’s talk about the hidden costs of government regulations because America, if anything, is a Regulation Nation.
From this Wall Street Journal On-Line article we learn:
Congress may be mired in gridlock, but the federal bureaucracy is busier than ever. In 2013 the Federal Register contained 3,659 “final” rules, which means they now must be obeyed, and 2,594 proposed rules on their way to becoming orders from political headquarters.
The Federal Register finished 2013 at 79,311 pages, the fourth highest total in history. That didn’t match President Obama’s 2010 all-time record of 81,405 pages. But Mr. Obama can console himself by noting that of the five highest Federal Register page counts, four have occurred on his watch. The other was 79,435 pages under President George W. Bush in 2008.
The one growth industry in America is the government regulatory bureaucracy. The author of the WSJ article points out that politicians and the media treat regulation as a largely cost-free public good. Many regulations, of course, are necessary and are for the public good; but they are definitely not cost free. The regulatory cost burden on businesses in America have to be covered one way or another. Most of the burden falls on the middle class. As corporate CEO’s and business owners watch their regulatory compliance cost go up, they naturally look for ways to reduce other costs. They hire fewer workers. they reduce wage increases, and they invest in automation or software to reduce the number of workers. As a result it is more difficult for people to break into the middle class, opportunities to progress for middle class workers are fewer and, saving for retirement is harder, Regulatory costs may be one of the highest taxes paid by the middle class.
The quality of life of America’s middle class was once the envy to the world. To a large extent it still is. But, this New York Times article informs us that things are changing:
The American middle class, long the most affluent in the world, has lost that distinction.
While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.
After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.
When will middle class Americans figure out that they can’t afford this nanny government of ours? That shinning city ona hill is looking a bit run down.
Well, that’s what I’m thinking. What are your thoughts?