The Clash of Generations: Saving Ourselves, Our Kids, and Our Economy

by Laurence J. Kotlikoff, Scott Burns

Overview

How America went bankrupt and how we can save ourselves—as a country and as individuals—from economic disaster.

The United States is bankrupt, flat broke. Thanks to accounting that would make Enron blush, America's insolvency goes far beyond what our leaders are disclosing. The United States is a fiscal basket case, in worse shape than the notoriously bailed-out countries of Greece, Ireland, and others. How did this happen? InThe Clash of Generations, experts Laurence Kotlikoff and Scott Burns document our six-decade, off-balance-sheet, unsustainable financing scheme. They explain how we have balanced our longer lives on the backs of our (relatively few) children. At the same time, we've been on a consumption spree, saving and investing less than nothing. And that's not to mention the evisceration of the middle class and a financial system that has proven it can't be trusted. Kotlikoff and Burns outline grassroots strategies for saving ourselves—and especially our children—from what could be a truly catastrophic financial collapse.

Kotlikoff and Burns sounded the alarm in their widely acclaimedThe Coming Generational Storm, but politicians didn't listen. Now the need for action is even more urgent. It's up to us to demand radical reform of our tax system, our healthcare system, and our Social Security system, and to insist on better paths to investment return than those provided by Wall Street (mis)managers. Kotlikoff and Burns's "Purple Plans" (so called because they will appeal to both Republicans and Democrats) have been endorsed by a who's who of economists and offer a new way forward; and their revolutionary investment strategy for individuals replaces the idea of financial capital with "life decision capital."

Of course, we won't be doing all this just for ourselves. We need to fix America's fiscal mess before our kids inherit it.

https://www.youtube.com/watch?v=IMKw76lBn0k&feature=youtube_gdata_player

Product Details

ISBN-13:	9780262300797
Publisher:	MIT Press
Publication date:	03/23/2012
Series:	The MIT Press
Sold by:	Penguin Random House Publisher Services
Format:	eBook
Pages:	288
File size:	1 MB
Age Range:	18 Years

About the Author

Laurence J. Kotlikoff, one of the nation's leading experts on fiscal policy, national saving, and personal finance and a columnist for Bloomberg, is Professor of Economics at Boston University. His writings and views appear in Forbes, the Economist, the Financial Times, the Wall Street Journal, the New York Times, and other leading media outlets.

Scott Burns's personal finance column has been nationally syndicated since 1981.

Table of Contents

Acknowledgments ix

Prologue xi

1 The United States Is Bankrupt 1

2 Catastrophic Success 9

3 Living beyond Our Children's Means 23

4 Economic Fallout 45

5 Beatings without Bruises 69

6 Does It Pay to Grow Up? 81

7 The War on Our Children 99

8 Unsafe at Any Speed 109

9 Getting to Yes 123

10 There Must Be Some Way Out of Here 139

11 Time to Retire 153

12 Becoming Our Own Solution 167

13 The Power of Ordinary Living 201

14 The Coming Generational Storm 229

Notes 235

Index 253

What People are Saying About This

John Silber

Economics doesn't get better or more disturbing than this. The Clash of Generations will tell you things you never knew and hoped you'd never learn. They are straight truths about our country's relentless expropriation of the next generation that will either land young and old alike in an early economic grave or culminate in generational war. Read this book if you care about your children. Read this book if you care about yourself. And read this book if you care about our country.

William P. Bengen

A clarion call for those who love America, and wish to preserve its virtues for future generations. A look down into the abyss to which we are headed, and some serious, well-considered recommendations for getting us back on track. The Clash of Generations is a compelling and fluid read, a don't-put-it-down-till-you-finish-it book, at once both scary and hopeful.

George Akerlof

The Clash of Generations is so well written that Scott Burns and Laurence Kotlikoff should be considered the Stieg Larsson of economics. But there is one difference: the horror story they tell—about the debts that burden the young—are not fictional. This is a great book of great importance, and every paragraph contains some new and interesting observation.

William J. Bernstein

The United States doesn't have a problem with debt it cannot pay, but rather with promises it cannot keep—promises to older Americans that, as things stand now, will bankrupt younger Americans. Intensely informative and entertaining at the same time, The Clash of Generations will lead you through the fiscal minefield that lies in our nation's future path and show you the way safely out of it. If you care about your grandchildren and the nation they will inhabit, you owe it to yourself and to them to read this book.

Endorsement

A clarion call for those who love America, and wish to preserve its virtues for future generations. A look down into the abyss to which we are headed, and some serious, well-considered recommendations for getting us back on track.The Clash of Generations is a compelling and fluid read, a don't-put-it-down-till-you-finish-it book, at once both scary and hopeful.

—William P. Bengen , independent financial advisor

From the Publisher

The United States doesn't have a problem with debt it cannot pay, but rather with promises it cannot keep—promises to older Americans that, as things stand now, will bankrupt younger Americans. Intensely informative and entertaining at the same time, The Clash of Generations will lead you through the fiscal minefield that lies in our nation's future path and show you the way safely out of it. If you care about your grandchildren and the nation they will inhabit, you owe it to yourself and to them to read this book.

—William J. Bernstein, author of The Investor's Manifesto and A Splendid Exchange

Economics doesn't get better or more disturbing than this.The Clash of Generations will tell you things you never knew and hoped you'd never learn. They are straight truths about our country's relentless expropriation of the next generation that will either land young and old alike in an early economic grave or culminate in generational war. Read this book if you care about your children. Read this book if you care about yourself. And read this book if you care about our country.

—John Silber, President Emeritus, Boston University

The Clash of Generations is so well written that Scott Burns and Laurence Kotlikoff should be considered the Stieg Larsson of economics. But there is one difference: the horror story they tell—about the debts that burden the young—are not fictional. This is a great book of great importance, and every paragraph contains some new and interesting observation.

—George Akerlof, Nobel Laureate in Economics, 2001

A clarion call for those who love America, and wish to preserve its virtues for future generations. A look down into the abyss to which we are headed, and some serious, well-considered recommendations for getting us back on track.The Clash of Generations is a compelling and fluid read, a don't-put-it-down-till-you-finish-it book, at once both scary and hopeful.

—William P. Bengen , independent financial advisor

Editorial Reviews

Blame Grandpa for the coming economic collapse? That’s not what Boston University economist Kotlikoff and investment strategist Burns do in this compelling and well-documented follow-up to The Coming Generational Storm. Instead, as politicians legislate more goodies while leaving the bill to future generations, they see us creating “a generational time bomb.” Demographic trends indicate that within half a century, the number of elderly in the industrialized world will for the first time outweigh the number of children. Moreover, these young people will likely pay more in taxes during their lifetimes than they will ever receive in benefits. Kotlikoff and Burns provide chilling examples of the almost inexorable growth in spending: Medicare Part D, which covers prescription drugs, began paying benefits in 2006, but its unfunded liabilities today are trillion, nearly equal to the trillion unfunded liabilities of Social Security. Meanwhile, our national profligancy—“saving nothing and investing next to nothing”—exacerbates the dismal outlook. The authors conclude by suggesting reforms to the banking system and offering investment advice, but their dour first section is what lingers in the mind. As they note, in 1983 the Greenspan Commission “fixed” Social Security, but nearly 20 years later, it’s in worse long-term fiscal shape today. The issues they raise provide timely intellectual fodder for this election year. (Apr.)

Publishers Weekly

This is a truly important book, and I hope that it will be so widely read as to inspire a meaningful widespread dialog among individuals, families, and policymakers.

—Geoff Considine , The Portfolioist

From the Publisher

This is a truly important book, and I hope that it will be so widely read as to inspire a meaningful widespread dialog among individuals, families, and policymakers.

—Geoff Considine , The Portfolioist

Reviews

This is a truly important book, and I hope that it will be so widely read as to inspire a meaningful widespread dialog among individuals, families, and policymakers.

The Portfolioist - Geoff Considine