This time is different are the four most dangerous words any economist or money manager can utter. We learn new things and invent new technologies. Players come and go. But in the big picture, this time is usually not fundamentally different, because fallible humans are still in charge. (Ken Rogoff and Carmen Reinhart wrote an important book called This Time Is Different on the 260-odd times that governments have defaulted on their debts; and on each occasion, up until the moment of collapse, investors kept telling themselves “This time is different.” It never was.)
Nevertheless, I uttered those four words in last week’s letter. I stand by them, too. In the next 20 years, we’re going to see changes that humanity has never seen before, and in some cases never even imagined, and we’re going to have to change. I truly believe this. We have unleashed economic and technological forces we can observe but not entirely control.
I will defend this bold claim at greater length in my forthcoming book, The Age of Transformation.
Today we will zero in on one of those forces, which last week I called “the bubble in government promises,” which I think is arguably the biggest bubble in human history. Elected officials at all levels have promised workers they will receive pension benefits without taking the hard steps necessary to deliver on those promises. This situation will end badly and hurt many people. Unfortunately, massive snafus like this rarely hurt the politicians who made those overly optimistic promises, often years ago.
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Not quite sure what you are referring to.
ReplyDeleteAs long as the government can tax us to fund their generous pensions that they give to themselves, they will continue hand out the overly generous payouts. The day of reckoning has already hit the private sector, but because of the funding by tax dollars instead of investment returns, it will keep the government doing it to the taxpayers until the country is actually broke. But even then our corrupt politicians will probably pass laws protecting the overly generous government pensions that the private sector doesn't have access to. Those same corrupt politicians will kill Social Security, that the private sector has to pay into their entire working lives, while maintaining the government/taxpayer funded pensions for the government workers. The government WILL deliver on their promises to the government employees, and the hell with the ones who pay for it.
ReplyDeleteMy retirement maintains flush with the stock market,which in turn has kicked butt since Trump was elected,with no sign of letting up.
ReplyDelete9:02...you may want to reconsider that "no sign of letting up" thing. There are some alarming signs that it is about to begin "letting up".
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