I posted the other day about Ray Dalio and the post was not well received here. So I’ll try gain from another angle. My concern is that it really IS different this time. I’m 62 years old and remember how bad things where in 1979 when I was 19. Gas lines, inflation, crappy investment returns (although I wasn’t part of investing at the time and didn’t understand what happened until years later). I really thought my financial future would be bad. Despite everything, things turned out OK.
It sort of feels like 1979(ish) again as I approach retirement. For the past 40 years, it seems that the USA has a new crisis every few years and the crisis gets solved with an ever higher debt-to-GDP ratio. Basically 40 years of kicking the financial can. There was a short time around 1999-2000 where debt seemed to be headed in the right direction, but 9/11 revived the urge to borrow as the quick financial solution to whatever the problem du jour was. Along with a growing debt-to-GDP, all through these 40 years, we discussed and knew that Social Security and Medicare were not properly funded. But that, too, got kicked down the road with no solution. It seems that we might be at the end of our ability to print and/or borrow our way out. Even inflating doesn’t seem to be a solution because it causes higher rates to service the national debt and much higher Social Security costs (estimated to be up 8.5%ish Jan 1st).
So is the 2022 financial swoon (stocks and bonds down) the beginning of a huge decline in the standard of living that 62 year old won’t live to see fixed? Or is this just another crisis du jour that will work out somehow and we’ll muddle through? I’m generally not a doom and gloomer or an extremist. But I’m trying to see how this can turn out OK for myself and other affluent (but not filthy rich) Boomers heading into retirement. I’d bet that there are others here who share my concerns.