The Coming Generational Storm: What You Need to Know about America's Economic Future - Hardcover

Kotlikoff, Laurence J.; Burns, Scott

3.68

217 ratings by Goodreads

9780262112864: The Coming Generational Storm: What You Need to Know about America's Economic Future

Hardcover

ISBN 10: 0262112868 ISBN 13: 9780262112864

Publisher: Mit Pr, 2004

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One of Library Journal's Best Business Books of 2004, Winner in the category of Economics in the 2004 Professional/Scholarly Publishing Annual Awards Competition presented by the Association of American Publishers, Inc. and CHOICE Outstanding Academic Title for 2004

In 2030, as 77 million baby boomers hobble into old age, walkers will outnumber strollers; there will be twice as many retirees as there are today but only 18 percent more workers. How will America handle this demographic overload? How will Social Security and Medicare function with fewer working taxpayers to support these programs? According to Laurence Kotlikoff and Scott Burns, if our government continues on the course it has set, we'll see skyrocketing tax rates, drastically lower retirement and health benefits, high inflation, a rapidly depreciating dollar, unemployment, and political instability. The government has lost its compass, say Kotlikoff and Burns, and the current administration is heading straight into the coming generational storm.

But don't panic. To solve a problem you must first understand it. Kotlikoff and Burns take us on a guided tour of our generational imbalance, first introducing us to the baby boomers— their long retirement years and "the protracted delay in their departure to the next world." Then there's the "fiscal child abuse" that will double the taxes paid by the next generation. There's also the "deficit delusion" of the under-reported national debt. And none of this, they say, will be solved by any of the popularly touted remedies: cutting taxes, technological progress, immigration, foreign investment, or the elimination of wasteful government spending.

So how can the United States avoid this demographic/fiscal collision? Kotlikoff and Burns propose bold new policies, including meaningful reforms of Social Security, and Medicare. Their proposals are simple, straightforward, and geared to attract support from both political parties. But just in case politicians won't take the political risk to chart a new direction, Kotlikoff and Burns also offer a "life jacket"— guidelines for individuals to protect their financial health and retirement.

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From the Inside Flap:

"*The Coming Generational Storm* is one of the most important (and refreshingly irreverent) policy analyses of recent years. Laurence Kotlikoff and Scott Burns ask what will happen to our economy and way of life when the baby boomers meet the current Medicare and Social Security systems. Their answers, using the innovative techniques of 'generational accounting' developed by Kotlikoff and others, demonstrate how close we are to a genuine fiscal precipice and the hard landing that awaits us. For our current presidential aspirants, the authors also provide some provocative ideas for how to ameliorate the damage this storm will certainly leave in its wake."
--Robert J. Shapiro, Managing Director and Founding Partner, Sonecon, LLC, Senior Fellow of the Brookings Institution and the Progressive Policy Institute, and former Under Secretary of Commerce for Economic Affairs

"Among academic experts, Larry Kotlikoff has earned the title 'Mr. Generational Accounting.' His unfuzzy arithmetic decisively rebuts the Bush tax cuts, which are based on the delusion that 5 - 4 = 6, not 1. Read and judge for yourself the specter of our future: too many retirees dependent on too few working-age people. Fiscal imprudence now mandates broken promises later."
--Paul A. Samuelson, Institute Professor Emeritus, MIT, Nobel Laureate in Economic Sciences (1970)

"Kotlikoff has been one of the pioneers of the new economics of generational accounting. If anyone foresaw the deterioration of the U.S. government's fiscal health, he did. Now, with journalist Scott Burns, he has written a book that spells out, in crystal-clear layman's terms, the disturbing truth about the rising tide of red ink."
--Niall Ferguson, Stern School of Business, New York University, and author of *Empire* and *The Cash Nexus*

"I lie awake nights worrying about the fiscal crisis described in *The Coming Generational Storm*. This is by far the single most important problem in US economic policy. Every American should read this fabulous book."
--George Akerlof, Koshland Professor of Economics, University of California, Berkeley, Nobel Laureate in Economic Sciences (2001)

"*The Coming Generational Storm* is a well written summary of an impressive and important body of carefully documented research. The book demonstrates clearly the folly of existing tax and transfer policies in the face of the impending retirement of the baby boom generation. Anyone interested in the future economic viability of American society and the economic problems we are bequeathing to our children should read this study."
--James J. Heckman, Henry Schultz Distinguished Service Professor of Economics, The University of Chicago, Nobel Laureate in Economic Sciences (2000)

"*The Coming Generational Storm* documents in frightening detail America's reckless fiscal trajectory as it barrels toward bankruptcy. The need to revamp Medicare and Social Security is urgent. This book is a must-read for anyone who cares about our nation's future."
--Janet Yellen, Haas School of Business, University of California, Berkeley, Member, Federal Reserve Board (1994-1997), and Chair, Council of Economic Advisers (1997-1999)

"As someone who has written extensively on global aging and its profound implications, I was delighted to read *The Coming Generational Storm*. It is an extremely important and original contribution."
--Peter G. Peterson, Chairman, The Blackstone Group, and author of *Gray Dawn: How the Coming Age Wave Will Transform America--And The World*

"Kotlikoff and Burns document and analyze the most serious issue facing the American government today: the looming intergenerational conflict created by its gross failure to develop a consistent plan to fund and manage entitlements for the elderly, the cost of which will explode when the baby boom generation retires. This book is essential reading for those concerned about their own future and their childrens'."
--Daniel McFadden, Cox Professor of Economics , University of California, Berkeley, Nobel Laureate in Economic Sciences (2000)

"Brilliant insights on the me generation vs.the next generation. Better still, smart advice on equally vexing questions like whether to invest in a 401(k) or a second mortgage."
--Sylvia Nasar, John S. and James L. Knight Professor of Business Journalism, Columbia University, author of *A Beautiful Mind*

"No economist has thought more clearly or spoken more resolutely about our long-term fiscal challenges than Larry Kotlikoff. In plain talk backed by economic rigor and the powerful models that he and his colleagues have pioneered, Kotlikoff and co-author Scott Burns expose the shoddy thinking and false premises that lie at the heart of U.S. fiscal policy and that risk the economic well-being of future generations. They show how reckless George W. Bush has been with our economic future, but also show that the evasions from fiscal honesty extend well beyond the irresponsibility of this Administration. And they offer solutions that are clear, bold, and controversial. You may not accept them in full, but you will understand better than ever before the real choices that we face. This book is a must-read for a country adrift in fiscal shortsightedness and political spin."
--Jeffrey D. Sachs, Director of the Earth Institute, Columbia University

"If Stephen King wrote about economics it would look like this. Kotlikoff and Burns have gazed into our future and seen a nightmare. The authors describe that nighmare vividly and identify why our elected officials on both sides of the political aisle are too cowardly to save us. Every U.S. citizen should read and digest this book before it is too late."
--Kevin A. Hassett, Director of Economic Policy Studies, American Enterprise Institute, and co-author of *Dow 36,000*

"Between a rock and a hard place. We must all too soon realize that we want to spend more on transfers (Social Security, Medicare, Medicaid) than we are willing to pay in taxes. And the prospective $44 trillion shortfall is, almost literally, beyond ordinary comprehension. Documented diagnosis, along with suggested reforms, are first steps toward constructive dialogue."
--James M. Buchanan, Buchanan Center for Political Economy, George Mason University, Nobel Laureate in Economic Sciences (1986)

"There's a lot of frivolous criticism of our politicians, but this book hits the mark, convincingly documenting their biggest sin: the failure to account for the magnitude of a huge government deficit crisis. The accounting scandals of Enron, WorldCom, and Parmalat pale by comparison. Read this book so you can start preparing for much higher taxes in the future for you and your children."
--Robert J. Shiller, Stanley B. Resor Professor of Economics, Yale University, author of *Irrational Exuberance* and *The New Financial Order*

About the Author:

Laurence J. Kotlikoff is Professor of Economics at Boston University. One of the nation's leading experts on fiscal policy, national saving, and personal finance, Kotlikoff is the author of Essays on Savings, Bequests, Altruism, and Life-Cycle Planning (2001), Generational Policy (2003), The Coming Generational Storm (2004), all published by The MIT Press, and other books.

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