The Coming Generational Storm: What You Need to Know about America's Economic Future | 
| Authors: Laurence J. Kotlikoff, Scott Burns
Publisher: The MIT Press
Category: Book
List Price: $18.95
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Avg. Customer Rating:  43 reviews
Sales Rank: 51079
Media: Paperback
Edition: New Ed
Number Of Items: 1
Pages: 302
Shipping Weight (lbs): 0.8
Dimensions (in): 8.9 x 5.9 x 0.8
ISBN: 0262612089
Dewey Decimal Number: 332.02400973
EAN: 9780262612081
ASIN: 0262612089
Publication Date: January 19, 2005
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Product Description
One of Library Journal's Best Business Books of 2004, A Forbes.com Top Ten Business Book for 2004, One of Barron’s 25 Best 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
This paperback edition of The Coming Generational Storm has been revised and updated and includes a new foreword by the authors.
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 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 Bush administration's spending and tax policies have charted a course straight into the coming generational storm.
Kotlikoff and Burns take us on a guided tour of our generational imbalance: 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. Kotlikoff and Burns propose bold new policies, including meaningful reforms of Social Security and Medicare, that are simple, straightforward, and geared to attract support from both political parties.
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| Customer Reviews: Read 38 more reviews...
 Excellent, Thought-Provoking Book October 29, 2007
This is an absolutely incredible book. Anyone who is interested in the future of our Social Security System and the Medicare and Medicaid systems must read this book. The authors provide good, documented evidence to explain what is broken in these vital systems. The authors explain why current politicians' plans for reform will not work and need to be revised. Most importantly the authors also give their suggestions on how to fix Social Security and Medicare and Medicaid. This was a required reading in my college Economics class and as soon as I finished it I mailed it home for both of my parents to read.
Essential Reading - Save Early and Save Often August 7, 2007
2 out of 2 found this review helpful
This book should be required reading for all high-school sophomores who are going to inherit the economic problems the authors lay out in the prologue. The more awareness my generation (x) and the younger generations get about the mounting economic conditions we will face within the next 25 years, the better prepared we will all be to fix, or at least adjust to them.
At times the book is a bit too academic and for that I give it only 4 stars but there are parts that you can skip and still not miss the authors' explanation of why we are doomed and what - possibly - we can do to mitigate the situation. Robert Shiller summarizes the points that the authors make below:
"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, Yale University, author of Irrational Exuberance and The New Financial Order
Perhaps the worst part of all of this is that we CAN fix the debt obligations that are hanging over us but doing so would require massive sacrifices on behalf of all citizens (unlikely since so many of us "expect" the government to play a role in financing our retirement and healthcare) as well as for both sides of the political aisle to work together (even more unlikely in these partisan times when all the Dems and Republicans want to do is blame one another). Failure to grasp the gravity of a $54 Trillion debt obligation and its impact on the quality of our lives will only continue to erode the value of the dollar as more developing nations such as China, India and Brazil increase their ownership of the US by buying up Treasuries that the government continues to issue. Not good, especially when so many of our middle class jobs are being lost to these countries at the same time.
This is perhaps the most important issue of our time. Until voters are heard and a real politician runs on a platform to fix the escalating economic crisis that awaits us all, do what you can to prepare yourself; save as much as possible in both tax deferred and taxed accounts (the latter of which will benefit you in the future since you will likely be in a lower tax rate today than you will 20 years from now when the govt. has no choice but to raise personal income taxes to finance the debt). Also, go to the gao.gov website and click on "Fiscal Wake Up Tour" in the left hand gutter, then click on the CBS New Program 60 Minutes hyperlink. If you dont have the time to read this book, at least read this article and watch the video interview with the head of the GAO office. By that time, the message and its implications should be painfully clear to you.
 Informative, but speculative January 10, 2007
9 out of 14 found this review helpful
Kotlikoff and Burns rightly portray congress, the president, judges, the AARP, and anyone else who favors increases, or even the status quo, of social security, Medicare, and Medicaid policies as truly irresponsible. The fact that these three entitlement programs will bankrupt the country within 50 years has been known for at least 10 years (when I started to pay attention to politics). Every year, reforms are spoken about, even good ones that would for the most part protect the programs. But every year, the situation becomes worse because nothing is done. And Bush II foolishly expanded Medicare.
On the flip side, economic predictions decades into the future seems fairly irresponsible as well. As is pointed out in this book, other countries are in far worse condition than the US for the same stupidly financed entitlement packages. They will go belly up first. While the US will certainly feel their pain as well since their economies are intimately tied to ours, we will learn from their mistakes and fix our own problems.
All my life, I've been listening that one disaster after another is going to crush us. In grade school, I learned that we would run out of food in the mid 80's through the 90's and billions would starve to death. Didn't happen. Humans now consume more calories on average throughout the whole world than ever before. Then in grade school and middle school I learned that we would run out of energy. Despite the blip of the last year, oil prices have steadily been dropping and they will continue to drop. We will never run out of oil or energy. Destruction of the ozone layer. It's still there. The depletion of our forests. The US today has more forest cover than 80 years ago. Foreign holdings of the US debt. Nuclear war.
And on and on, disaster after disaster that never materialized. Not because the harping drew attention to the problem, but because in the stating of every single problem, the assumption was that nothing would change. That the human response would not adapt as new information and incentives came about. Not a smart assumption.
We will solve the entitlement problem, but, yes indeed, we will have to feel the pain first. And so what? We'll still solve the problem. The sun will rise in the east and set in the west and the US will be around for a long time and in a dominant position, social security, Medicare, and Medicaid not withstanding. The US and the world will continue to become a better place, but in fits and starts.
I've always been an optimist. I really do believe in the power of imagination and human ingenuity.
Generational Fear Should be Great January 9, 2007
This book gives a great review of the issues facing America in this century due to government give aways. After reading it I found that several current news stories seemed to be confirming the predictions in the book. The numbers are 3 years old, but the suggestions for saving Social Security and Medicare still seem to be valid. I was a little disappointed in the funds listed in the book, but I have received updated listings by visiting the Scott Burns web site.
A Sobering Assessment December 5, 2006
6 out of 8 found this review helpful
Per Kotlkoff and Burns (who base their findings on Government projections), the present value of unfunded future liabilities for Social Security and Medicare is $45 trillion (some nine times the size of our "National debt"). The reasons: longer human life spans due to advances in medical science, retirement of the baby boomers, and the disconnect between the consumption of medical services and the responsibility for paying for them.
Drastic action would be required to close the gap now, e.g., (a) increase federal income taxes by 69%, (b) increase payroll taxes by 95%, or (c) cut Social Security and Medicare benefits by 45%. We could make even more drastic adjustments in a few years. Or, we could do nothing and let the U.S. economy go into a meltdown with double-digit inflation fueled by the Government printing money.
Our political leaders are trying to ignore the problem, and, as Kotlikoff and Burns explain, the fault is ours. "The last thing we want is Uncle Sam telling us to save now for a tidal wave of obligations when the baby boomers retire. So we make sure that doesn't happen. We hire [elect?] politicians who tell us what we want to hear."
The authors go on to present a plan for reform, but they don't expect their plan (or other reforms that could save the system) to be enacted. They end with advice as to how workers should attempt to look after themselves and their families if the politicians in Washington "miss this opportunity to save our ship of state."
One thing bothers me about the analysis. Accepting that the fiscal gap is every bit as bad as it is depicted, this problem was created by Government action. Why should we attempt to solve it by giving the Government even greater responsibilities, such as running the world's largest index fund, assessing the health risks of every senior in the country, deciding how much society needs to spend for health care, etc.? It might be more logical under the circumstances to move in the direction of less Government and let people make choices (such as how long should I work, what medical care do I and others in my family need, etc.) for themselves.
Even if the authors don't have all the answers, however, they have diagnosed the problem very well. "The Coming Generational Storm" is entertainingly written and refreshingly nonpartisan (lambasting both Republicans and Democrats with vigor). Don't miss it.
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