This Google site was created by Rob Perhamus. but allows others to actively participate and collaboratively contribute. The major thesis here is that people in their 50's should return to a full time university lifestyle to prepare for their encore careers. Go here to learn how you can contribute to building this site. This is a working site, so portions of it may be incomplete or in progress. There are many reasons to start an "Encore Career" Returning to college full time is an exciting path for many. Top 10 personal reasons to return to full time college life.
A short video on aging populations from the Economist is shown here. The population in the U.S. is aging and people live longer than they used to. This will have an impact on all of us, young and old, locally and globally. Some people plan and feel entitled to retire for much longer periods of time than in the past. But is this realistic, desirable and sustainable given different expenses that may occur during retirement? And more importantly, what will we do about it? What new opportunities should be explored? "We need to see the world as it is, not as we want it to be." , and, "The best way to predict the future is to create it." -Peter F. Drucker Data from the GAO From the Government Accounting Office showing some interesting projections on the growth in federal spending. The Medicare/Medicaid Issue. Our guiding principles are that we wish to:
We do not want to be:
It gets really boring from here down
Dear Sir, It is no news that Baby Boomers are approaching the traditional "retirement age". In the U.S. and in other developed nations, people live longer than they used to, and there are more of them.
Merkel is wise to recognize the aging population. Klein offers a solution to import youth. Why not dust off the old, and keep them working longer in new occupations, or take the old and ship them off to global locations where the cost is less? The underlying problem is the result of an aging population that is large in size and lives for much longer than previously anticipated. This is a global issue that may begin in different countries at different times, with different magnitudes, easily recognisable from demographics. An alternative path would be to increase the economic work life of the aging population to something closer to death. To accomplish this, would require focusing efforts on improving the mental and physical health of the aging 50 and 60 somethings, reducing long term health care costs while enabling elders to launch new and relevant careers, that are engaging, meaningful and contributing to society. Have them reconvene on campus to work on projects to "save the world." or prepare them for employment in noble occupations in Education, Health Care and NGO's, or Government where the tasks are "knowledge work", rather than physical. This would be a reset button for employment entitlement costs, allowing fully qualified, healthy, retooled elders to re-enter the workforce, rather than becoming an ever expanding burden. Have classes with grades based on demonstrated health improvements, proving they have been reguvenated and are probably good for another 20 or 30 years of work, doing what they love to do. To accomplish this, create modern day dormitories at urban universities, with a smaller personal footprint, more shared space, lower energy consumption and create a social environment for elders to return to a university lifestyle with peers. Urban environments reduce transportation and energy costs, through walking, biking, public transportation. The elders would add the experience factor to the quality of the education of youth, through in inter generational classrooms. If it is not a good time to sell the home, have industry or government lease out your home, while you are away at school for 4 years. Educate youth to understand they will live to 100, and encourage them into more physically demanding, innovative and engaging lines of work, confident that they can retool and do the knowledge work later in life. Show youth, 20-50 year olds, that now is the time to grow up with their children. Another alternative is to send your old people offshore, where a little money, goes a long way. It rebalances the demographics. The underlying issue that is plaguing the U.S., is the aging of baby boomers. There is a large number of them and they live longer than they used to. Society is ill prepared to handle this demographic change. Although we have been aware of it for although we have known about it for a long time. We must find creative ways to keep this older p Economics The Real Issues
How would this manifest itself?
What to Do:
What are the benefits of this plan?Participants
Business
Government
Education
Political Objections:Participants
It seems that all cultures at some point struggle over what to do with their elders. It was a relatively small issue, when people would work until close to death, or there were only a few people, that only lived a few years, at a low cost before death. However, For the past 50 years, there has been reasonable stability in the number of people over 60. When you consider the ratio of those over 60, to those of working age as 15 to 59, it has been constant at 3 out of 10. During the next 20 years, this will increase to 5 out of 10. the ratio of those over 60 to those 15-59 has been , the population over 60, was less than 30% Ideally, everyone over the age Economics, Aging Technology and Jobs The key to economic growth is to keep everybody working, spending and paying their share of taxes. The critical factor is to keep older people working longer. We are all aware of the baby boomer years(1946 to 1964), when birth rates were higher than normal. This formed a population bubble, or as some call it, the age wave. The average life expectancy has increased from 68 to 80 over the past 60 years and some forecast an increase to 100 by the year 2030. When the average lifespan was 68, it was possible for those working to support the burden of a small portion of retirees for a few years before death. However, it is not sustainable, when a much larger percentage of the population lives up to 35 years beyond retirement age. If people will live to 100, they need to work until they are 97, and we are ill prepared for this at this time. It would quite normal if people projected they would retire at the age of say 65, to begin looking for ways to spend less and conserve more, in order to make what they have last for the duration of their retirement. With this cultural expectation, it should be normal to expect some changes in consumer behavior, to downsize cars, houses and remove funds from riskier stock markets in favor of more conservative investments. And long as people feel they are going to fall off their economic cliff and into conserve mode, they will not begin spending again. Structural unemployment Given only 2 choices, where older people either stay at their jobs or retire, creates quite a dilemma. If they were expected to leave the workforce, but don't, either the number of jobs created will have to grow much more, or there will be no jobs for youth. In case 1, if 2 million retire at 65, and 3 million younger people join the job market, we need to create 1 million jobs. However, if 2 million do not retire, and 3 million enter, we would need to create 5 million jobs to break even and not see an increase in unemployment. And if the economic pie, is only so big, who should get the welcome to Wallmart job, the young or the old? The key would be to increase the expectancy of how long a person will work, and create low cost, low income, engaging and economically contributing jobs for older people. Isn't it exciting when young people leave home for college. Obviously, the technology is available, and rapidly deployable to have every young person attend college on line. But there is a social element to attending college. College is a boot camp, where they are stripped of most personal belongings, and live in relative poverty, while they train for the future. College students don't often own their own home in the suburbs and have multiple cars in the driveway. They socially engage and interact, with words, sounds and body language. Which came first, the chicken or the egg? The egg came first and grew into a chicken, but where did the egg come from if there was no chicken to lay the egg. Therefore, the chicken came first. But if the chicken came first, where did it come from? Chickens come from eggs, so the egg must have come first. Quite a dilemma! "Chickeneggonomics" is an approach to evaluate economic dilemmas and provide some incite on potential solutions. When it comes to understanding economics, many of the famous scholars of the day, looked first to the impact of technology and demographics. Ultimately, is seems to me, that those who look and these first, turn out to be the ones who were right. Those who proposed solutions that resulted from their understanding of these were the heroes, those who did not, were the villains. Demographics: 2009 view. In the 1980's, the boomer wave was passing through the economy. Leading edge boomers aged from 35 to 43 years old. It was a great time of prosperity, as this bubble was busy spending and buying everything in site. Roll forward to the 1990's. Lead edge boomers are now 45 to 53, still spending away, having kids buying houses. Roll forward another 10 years and the same happens. Now consider the 2010, the leading edge boomers are now 64, will they keep spending and buying and having children and buying cars and flocking to the good schools of the suburbs? Most would say, they stop spending. They would take their money out of stock markets in favor of safer investments. They would stop buying big homes in the suburbs with the good schools and big yards for the children to play in. Their children are going out on their own now. It is not their priority to have these things. As a nation, the question of what will we ever do with all the retiring boomers. How much will they cost us? How many of them are their? They have accumulated all the wealth in their homes and savings, so what if they stop spending, stop working, stop buying While the discussion at hand compares I prefer to call it Chickeneggonomics, which came first, the chicken or the egg. Reaganomics and Obamanomics have a completely different sets of conditions, that require completely different solutions. Reagan was faced with the leading edge of the boomer population wave, who were, at the time 35 years old. With an explosion in the number of 35 year olds who aged to 43 during his administration, how could you go wrong? These guys buy everything in site. Obama is faced with the leading edge of the age wave at 63, who will age to 67 or 71, depending on his length of office. When you consider the ratio of the number of people over 60, to the number of people from 20-59, the percentage over 60, has been stable between 25 and 30%, for the past 50 years. During the next 20 years this will increase to 50%. Health Care: Older people generally have higher medical expenses than younger people, and when their are more of them, the cost is that much more. With the boomer age wave, a lot more. Reagan did not have to deal with this. This is a new condition for Obama. Stock Markets: Older people generally try to hang on to what they have, rather than gamble as much as they do when they are young. They withdraw from riskier stock markets in favor of safer investments. If a larger portion of the population, who have accumulated more wealth decide to play it safe and exit stock markets, wouldn't it , drive demand and prices down?. If all the 20 year olds, made a joint decision to get out of the stock market, I doubt we would even notice. This is new for condition for Obama, not enjoyed by Reagan. Housing: Isn't in normal for people in their 60's, who wish to hang on to what they have, to stop buying large homes in the suburbs that have good schools for their children? Not too many in their late 50's and 60's start families and buy into neighborhoods with good schools. Obama gets this one, where Reagan did not. Automobiles: When it comes to buying cars, how many older people will still want to buy a bus (that we call an SUV) to drive back and forth to the grocery store? Obama gets this one, where Reagan did not. Credit Crunch: People take their excess money and give it to the bank. The bank, in turn loans the money out to someone else and charges interest. They keep some for themselves and give some to the depositor. But if the depositors are older, wouldn't they say whatever you do, don't loose the money I gave you? Don't risk it! Wouldn't a bank, with a responsibility to their customers, get more conservative with who and how much they will lend to? This is new for Obama. The point is that what worked before, will not work again, primarily because of demographics and changing technology. I am pretty confident that solutions will come out of looking closely at these issues, as they seem to hold true. Hopefully, someone will step in with an Ah Ha! and say let's build some college dorms and get the older people, as a group to move back in for a while. Students live relatively inexpensively, they consume less by sharing housing, waking, biking, etc. This reduces the barriers to entry. Let's make them retool for things needed today and tomorrow, not yesterday. Let's make them improve their health while on campus, put them on diets and make us quit smoking. This won't happen by taking a class or two at a community college. To become functional, they need to do some of that economic "creative destruction" and get rid of their old burdens that increases their geographic mobility and go where the jobs are now. Let's get them to buy into the greater purpose, the meaningful careers, the encores, the save the world types of occupations that they have always wanted to do but didn't. Let's put them in groups on campus, combining their life experiences as well as sharing their knowledge with so they can work on problems together and with youth, making this a social thing as well. Let's keel them them physically and mentally healthy and happily working until close to death. If we don't do this, expect a growing burden of costs placed on future generations. make them think this is a time to solve the problems of the world and continue to work until close to death, because it is meaningful and engaging. Make us older folks, get healthy at school, put us on diets and make us quit smoking. As a result of the "baby boom" (1946-1964), this percentage will increase to 50%, by 2030. The age wave, as some call it, has been known for quite a while. The thing I find most unusual is how little it is directly discussed as a major contributing factor to what has recently occurred, and what we can expect to occur in the future. It's not like it used to be, when older people would fall off a cliff, ending their economic life, then pass away soon after. For whatever the reasons, probably technology, people live longer now, they don't fall off the cliff, they remain a part of society.
In 1981, the baby boomers were from 17 to 35, and by the end of the Reagan years, they were 43 to 25 years old. So consider what might happen with a swell in a population of 25 to 43 year olds. People might buy homes, start families. The number of people over 60, relative to those working was constant at around 30%. How much government is needed to take care of the needs of 35 to 45 year olds-not much. Carter got stuck with an overall decline, based on the In 2009, however, we are faced with those baby boomers reaching retirement age. How might this age wave effect housing, financial markets, GDP growth rates, health care? or to What happens when people approach 60? This is what I would expect:
Reagonomics 1981-1989 versus Obama Everyone is aware of the baby boom 1946-1964, where birth rates were high. The leading edge of the age wave in 1981 was 35, and aged to 43 during this time frame. The burden of an aging population was not an issue, as it was stable at 28 to 30% throughout the 70's, 80's, 90's and 2000's. During the next 20 years, the 1981-1989 Why For the Boomer
The major issues of the day are
Aging of Baby Boomers. Economics: We built more homes than we needed to and paid too much for what we bought. Now we have too much inventory. Everything else is a ripple. Falling home prices, unemployment, foreclosures, high credit risks, reduced spending, reduced tax revenues, bailouts, blaming Wall Street, Government, Politicians, Insurance Companies, Media etc. The end game is to reduce the housing inventory. So, how do we get rid of the excess inventory. Create jobs, so people can buy them, Stop building new ones, until we get rid of the ones we already have or get someone to buy them, on the condition, they will be removed from inventory. You can do this by creating jobs, so people can buy the homes and reduce the inventory. Or, you can figure out ways to get investors or taxpayers to buy up the inventory. Old people don't look to buy a home to raise a family in a suburb with good schools and a yard for the kid's dog to play in or the 3 car garage to put the SUV's in We also have another event that is occurring, the aging of the population is upon us. Health Care costs more for old people than young people. The number of old people will triple. Who will pay for this? Education Energy Taxes Housing prices and Stock Market Prices Declined Dramatically I have a theory, just like many others do. But my theory will lead to a different course of action. America is aging, and we need to adjust. We have too many houses on the market for sale. It was a nice thought that everyone could own their own home, but the pace was too fast. And now we sit on a high inventory. It is based in the numbers that suggest that people over the age of 55, who make up some 16% of the population and control some 70% of the wealth, are rapidly becoming a larger percentage of the population. This is a result of the high baby boomer birth rates, that lasted from 1946 to 1964 and are just reaching the retirement age. People who approach retirement, will prepare to retire, by downsizing their homes, reducing their spending and withdrawing from the risks of stock markets. We have too many homes for sale or in default on the market. Why? Did boomers get ready for retirement? Did they downsize, stop spending, withdraw from the stock markets for safer havens? Are there too many homes on the market. Do we have more than we need? The population is growing at a rate of leave the market? Boomers have the money, and their are more of them, than there used to be, so Give money to the insurance companies Give money to anyone who can create jobs now Give money to help people last until employment opportunties start Buy up the excess inventory of houses. But this will only work, if someone stops people from adding to the inventory with new homes. Keep people from selling their homes. People try to accumulate wealth, through homes and capital markets, until they reach a point when the change their focus and try to hang on to what they have. People over 55, plan to fall off a cliff. The current theory of economic downturn starts with housing. We let people get into houses, that could not afford them. We built too many houses. . We have information that could tell us what might be expected in the future regarding Historically, people who are 55 and older control 70% of wealth, primarily in home values and markets. When people approach retirement, concerns switch from increasing wealth to preservation of wealth. Children leave home, they downsize their housing and exit risky stock markets in favor of more conservative investments. One would think that an economy would reach a steady state, with youth entering the population and older people exiting. However, demographics of an aging population have changed that. The boomer bubble is upon us. That large title wave of people in their 50's that are approaching retirement is much larger than it has been, and they plan on living longer that previous generations. As the older boomers a larger portion of the population, with a larger percentage of the wealth makes ready for retirement, the magnitude or amplitude of the impact would be greater. More people, would downsize, increasing housing inventory and drive prices down. Suburbs, with the good schoolsinventory. More people, with more money would flee the markets for safer investments Should Baby Boomers return to a full time university lifestyle in midlife? Can we afford to leave boomers behind? Should the new mantra be NBLB? No boomer left behind? We often focus on the education of our youth, to make them functional and enjoy the benefits of higher incomes, greater social and geographic mobility, and enable them achieve a higher standard of living. Education has been widely accepted as a contributor to economic development and can produce both public and private benefits. New, more advanced economies are often a function of a nation's human capital, that is, what is contained within the minds of it's "knowledge workers", it's citizens and their ability to contribute towards the relevant needs of a society. Many innovations including the printing press, steam engines, semiconductors, automobiles, shipping containers, the Internet and others have changed the economics of the world. We have created new forms of education in community colleges, universities, advanced professional degrees and continuing education opportunities. We now have more efficient methods of delivery of digital educational content, through ever expanding distribution channels using low cost computers and the Internet. We are now approaching a new demographic condition, the aging of society, that will create new challenges and opportunities. The oldest of the baby boomer generation in the United States has now turned 63 years old. Over the next 20 years, there will be an unprecedented number of people entering the traditional retirement age. More specifically, the percentage of the population over 60 expanded from 12% to 18% over the past 60 years. It is expected to grow another 7%, during the next 20 years, 3 times the rate we have experienced over the last 60 years. Following World War II, from 1946 to 1964, the large increase in birth rates created this "population bubble" of 78 million people in the U.S. In addition to the number of older people, these boomers are expected to live longer than previous generations. When "Social Security" began, the average life span was only 68, followed by a few brief years of relaxation and comfort prior to death. Average lifespans are now 78 and some researchers say that by 2030, it could increase to 100(1). The population over 60 will grow from 18% to 25% by 2030, and both the boomers themselves, and society are ill prepared for this. What shall we do with all the old people? We have been diligently working on the problem in the background for years. We have expanded our health care systems, and built active adult and retirement communities. We have encouraged youth to train for careers in health care. We have advocated and launched new campaigns to promote second or third careers to keep people working longer. We provide incentives for working longer and have promoted savings in 401Ks and industry pension plans. We are marketing volunteer and civic responsibility opportunities to promote more "meaningful" causes. Unfortunately, the recent downturn in the economy has dramatically reduced the wealth of many boomers and their ability to sustain a reasonable standard of living for their extended lives. Home values and savings falling in some cases have fallen 30 to 40%. As a result, our economy faces the tremendous potential of an expanded social burden to support and care for boomer needs, unless something is done. It is, of course, conceivable, that the current recession is actually the result of older boomers exiting the market to preserve their wealth in anticipation of an extended retirement. Many speculate that people are sitting on their money in the sidelines, waiting to get back into the game. Another possibility is that they have decided to leave the game altogether. Did those in their 50's who have accumulated a larger portion of the wealth over the past 30 years, suddenly decide to reduce their spending, sell large homes, move to smaller apartments, and withdraw investments from stock markets? I seems like the classic chicken and egg debate. Who stands to benefit from a University Lifestyle and why?
http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth.html http://www.census.gov/hhes/www/housing/hvs/historic/index.html 65 to 75% of wealth is held by people over the age of 55. This paper examines expanding the path for those in their 50's to return to a full time, resident university lifestyle for a few years to retrain and launch new careers in fields that will be needed for the next 30 or 40 years. The reasoning behind this approach will be discussed. To be relevant and not a burden To contribute in a meaningful way. Entitlements. Aging boomers must find ways to remain healthy, and contributing to the economy for extended periods of time. Rapid integration of technology and globalization have resulted in faster structural changes in the economy than ever before. A person can no longer assume that they will remain within an industry for a lifetime, simply because that industry may not be around as long as their working lifespan. Former arguments that we we always need food, and we will therefore always need farmers, no longer applies, as employment in agricultural occupations has declined from 80% to 2% of the population. We can no longer count on a career for life in manufacturing , where employment has declined from nearly 40% to less than 10% over the past 60 years.Those who hang on tightly to these false beliefs of their own economic value, often become recipients of social welfare through political advocacy. "Save the Farmer" and "Made in America" , as hard as we try, do not appear to be sustainable in the long term. It is doubtful that entitlements to 30 years of golf will continue, as hard as we may choose to believe. It is highly unlikely, that this increase in the rate of aging will go without consequences, with business as usual. It is more likely to result in structural economic changes. What should we do? What is our mission? Our mission is to create a new and sustainable mid-life "university campus lifestyle" Our purpose is to: Create a sustainable point of re-entry to a mid-life university lifestyle to remain healthy, relevant, independent and contributing to society
One path is to move back on to campus, live a university lifestyle for a few years, then relaunch their lives for the next 30 years. As a culture, we have to revise our thinking so that older citizens remain economically functional in society until they are close to death. Expectations of 20 to 30 years of financial support
Most of us attempt to create a better future, for ourselves, our families, our communities, our regions, nations and the world, in that order, ............when we can. We reverse it, when we can't. Ideally, our prosperity and quality of life will expand and steadily improve. We all hope that our work is engaging, contributing and rewarding. We want to increase our wealth over time, primarily through higher incomes and an increase in the value of our homes and investments. However, things don't always work that way... do they. Recently, we have fallen into another recession, a downturn in the economy with high unemployment, declining home and stock market values and a slow down in business. We have been busy implementing our solutions, based on our assumptions of the causes. We do this based on what we have learned from our mistakes of the past, right? I will create a new word here, as that seems to be the scholarly thing to do that creates an income from websites and interviews and new diplomas of higher education. I hereby dub this new field of study "chickeneggonomics" To become a renowned expert in this advanced and most prestigious of disciplines requires years of research and intense thought related to the advancement of chicken and egg arguments as related to economics, politics, government, higher education, global warming, business, non profits, religion, national security...... etc, etc, etc. I offer the following to illustrate the power of chickeneggomonics, by relating it to current economic conditions. Let the games begin!
But what if there was a different reason-right in front of our eyes, but we missed it? What if the real problems were simple? Did you ever notice how those famous, really smart, Nobel Prize winning economists, seemed to figure out..... the really simple and obvious stuff... but after the fact? Is it too absurd to think that our current experts and economists have become so competent in the details........ that they have forgotten to look at the big picture of what's really going on? Where has the discussion , debate, analysis and impact of baby boomers gone? How did they disappear from the discussion? Have we put the blinders on or what?.........Think about it! We have recently developed this large pile of old people(forgive me, I am one of them), that are about to, or at least thinking about this thing called "retirement". You know, retirement, a couple of years on the dole before you die. Most people know that when social security started, you could expect to retire at 65, .......when the average lifespan was 62. In case you weren't listening, you would die before you started collecting. Not a bad deal for taxpayers, right? But things are different now. We live to 85 or 09. We seem feel to feel entitled to 30 years of leisure at the expense of those who work. The benefitsteachers and We have even higher expectations and feelings of entitlement if we have been educators, government employees, politicians, in the military We have never had such a pile. seem to prove their theories based on it? What if the real problem is the boomer bubble? Or the long recognized tidal wave of older people approaching retirement age? An more importantly, what should we do about it? Should we do things differently? Are the solutions different? Generally, when the assumptions change, the solutions change. Are we making the correct decisions, doing the right things? We make some basic assumptions like what goes up, must come down, but then it must swing back up, because it always does. But what if there are reasons that would prevent a speedy upswing? 79 million baby boomers were born between 1946-1964, meaning that the oldest of the group is just beginning to retire, or at least thinking about it. This is a historically new condition in that the magnitude of the boomer bubble or boomer tidal wave that is approaching retirement age is much larger than we have experienced in the past. I would assume there is a distribution of wealth by age. People gain wealth as they age, up to the point when the retire, when they begin to use their wealth up. They often have larger disposable incomes as they move up the cooperate ladder. They tend to find ways to spend less, conserve more. They move their investments out of the risky stock market and into safer income investments. They may downsize their homes, because they no longer need room for the kids. They may move out of suburban areas because they are less concerned with the higher quality education thought to be provided in suburban schools. They no longer need SUV's to transport a boat load of children to events. Let's look at some basic demographics.
The second implication is that if you assume that the majority of home buyers are in the age group of 25 to 60 years old, that the demand for homes will be much slower than it has been over the past 40 years, since 1970. There has been a housing boom for 40 years, that you could anticipate slowing for the next 20 years, or through 2030, before picking up the pace again. em and the percentage of people over 60 will increase from 16% of the population to 25% of theThey are placed in this group because there was an exceptionally high birth rate that occurred during these years. The earliest of this group is now 63 years old. We talk of housing bubbles, and market bubbles, but perhaps we should be dealing with a boomer bubbles, or, as I prefer to visualize it, as a boomer tidal wave, just hitting the shore.-"Retirement" From 1950 to 2000 It took us 50 years for the over 60 crowd to grow from 12 to 16% (4% in 50)of the population. Over the next 20 years, the over 60 crowd will grow from 16 to 25% (9% in 20) What can we say about boomers? They are older and as a result have accumulated more wealth than younger people Housing, Children, Cars and Investments Boomers are downsizing and moving out of the larger homes in the suburbs. Who wants 4 bedrooms or to pay for the utilities for it. Why water the lawn that was meant for the children, only to pay a gardener and then pay to have it hauled away. The good schools, are no longer valued, because their children are launched. Boomers want smaller vehicles because they are no longer hauling their kids around to school, sporting events and other family activities.
What if the people who were at the peek of their accumulated I think of this as a large tidal wave, that is just landing on the beach. People over 50 often start to think about retirement. Several things should be noted about them. This group has been buying the big homes and cars for years. They have been investing in stock markets and 401K's. They have been driving the economy up for the past 20 years. It is this group that has accumulated a relatively larger share of the wealth. They are the CEO's, Presidents and Vice Presidents who, are the top income earners, decision makers, owners in business, banking, government, education, health care and all other sectors. What happens to people when they are say 55 years old? There children leave home. They think about downsizing. They buy smaller homes. They buy smaller cars. They take their money out of more risky markets and look for safer investments.
has their theory on wich cam first, the chicken of the egg. But what if this problem is different from historical ones, or if the real root cause of previous problems was not really found. In this current situation we have come to some conclusions
We relaxed lending criteria that lead to more people getting into homes that could not afford them. We built too many homes. We built the wrong kind of homes. . t The population in the United States is aging. A large increase in birth rates following world war II, that lasted from 1946 to 1964 is referred to as the Baby Boom. that I will only attempt to suggest minor solutions to some of the problems that we face. in the direction of human nature goals. have no intent here to solve all the issues, but would like to offer a path for a few, that hopefully expand . However, we are not as successful Unfortunately, we all realize we are less than perfect. are less than perfectrealize that we are not close to achieving this. Bardach's procedure is as follows:
This is a result of the higher birth rates experienced during the baby boomer years(1946-1964) and longer life spans. In the U.S., the percentage of people over 65 will grow from 18% to 25%. Here is a graphic illustrating how our population is projected to change. Additional information on aging demographics can be found here. We have recently experienced a housing bubble, followed by a stock market bubble, destroying a tremendous amount of wealth, with increasing unemployment. Many who predicted these events were apparently not heard or were misunderstood. The heated political debates continue regarding the best alternatives to solve these problems. But I rarely hear about the issue of the boomer-bubble which could be directly related to the current problems. You do not have to be the sharpest tool in the shed to know that those approaching retirement have generally accumulated more wealth in stock markets and home values than younger people. Obviously, if the older group removes savings and downsize their homes and choose smaller vehicles that fit their needs, it would have a greater economic impact than if young people with nothing decided to do this. I am sure there are some conspiracy theorists who are saying we destroyed the wealth of those approaching retirement, to keep them working longer. Others will blame those darn baby boomers for downsizing and withdrawing from markets for safer investments. The chicken-egg debate will go on for years to come. On the radar of issues, of course are health care reform can we do to prevent it. We also have an aging population bubble that will have result in many economic changes. But if we know this, can we do something about it? My suggestion is that those who are 50 or so, should return to a full time, resident university lifestyle. They should leave their old lifestyles behind to start a new one. Why a resident student rather than attend community college or school at night or weekends? It allows a new beginning and it is an inexpensive, affordable option for many. Who would do this? Baby Boomers(1946-1964) There are 79 million baby boomers, and for many, their family raising days have ended as they have launched their children. "Empty Nesters" who are done driving their children to events, watching and volunteering to coach are likely to look for something new. Doing the same work for 50 years, can be become quite boring, and many will ask that question "is this all there is to life?" I always wanted to....., but I never did because........The number of baby boomers that have launched their children is unknown, but if most have children before the age of 40, their children should be around 20 and may be on their own, either now or soon. 30% of baby boomers, or 24 million of this age group have 4 year college degrees, pre-qualifying them to enter universities. And half of the baby boomers divorced, with many still living alone, although both could go back to college together. College is a great place to make new friends and establish relationships for the next 20 or 30 years. College is a social as well as an academic community. Why go back to school? This is a personal strategic move, as they call it in economics. It comes from the notion of "Creative Destruction" where "again out of destruction a new spirit of creativity arises". "To call abandonment an 'opportunity' may come as a surprise," Drucker wrote in his 1964 book Managing for Results. "Yet planned, purposeful abandonment of the old and of the unrewarding is a prerequisite to successful pursuit of the new and highly promising." Wise words, applicable to individuals as well. It's very expensive to go to college, or is it? There are 2 cost components to going to college. The cost of living, and the cost of tuition. Cost of Living. A college students cost of living is low, normally less than $10,000 per year. This includes housing, food, transportation, internet, tv, phones and entertainment. In the more urban campus environments, students use public transportation, walk and ride bikes. Compared with normal lifestyles, a car may costs ~$7500 per year per vehicle.(15,000 MPY@$.50/M). Continuing to live in and maintaining a home that was needed for raising a family can be relatively expensive and wasteful. Mortgage payments, insurance, taxes, utilities, yards, phones, tv, internet all add up, and do you really need them? In my case, these total up to `$23,000 per year. The house and the car add up to $30,000, so $10,000 to live on campus is quite a deal. Individials of course, need to evaluate their current expenses against the expenses of a resident student. This may not be the best time to sell a house, but it may be a good time to rent it out, while you are at college, waiting for a recovery in the housing market. Many boomers, who raised a family in a home, will have equity, that would allow them to rent it out, with positive after tax cash flows. Make sure you consider the tax laws on capital gains for the sale of a home. There are exemptions, but also time limits where you have to live in the home 3 of the last 5 years. This means that you would have to sell it within 3 years of leaving, or, you would have to move back into the old home again for another 3 years before you could sell it without having to pay capital gains on your profits. Cost of Tuition Resident tuition costs for public universities is in the $8,000 per year range. Of course, there are many discounts for alumni, or for those over a certain age. Younger students are normally required to take enough classes to graduate in 4 years. But an older person could slow this pace down, and reduce their spend rate. Their are ways to use 401k's, without the 10% penalty to pay for tuition. However, you would be taxed on the $8,000 distribution, at your almost poverty level income if you work part time at college. In other words, not much.
In addition to expanded programs at community colleges, and other "while you are working" forms of higher education, we need to create "university lifestyles" for mid lifers. This would entail public-private partnerships to develop efficient, affordable housing options enabling mid lifers to reconvene on university campuses for a few years to preparing for their second lives. This community of peers, or classmates, armed with "first career" success from government, business, education, health care and non profit sectors could collaborate to develop and launch the new organizations needed to solve local, or global problems. Affordable, would include, energy efficient, low cost housing, expanded public transportation and reduced food distribution costs, that are common in a high density campus environments. This is not necessarily a new innovation when you consider the first wave of expansion that occurred in universities and campus housing that occurred to educate and make baby boomers productive in society. Rather, it is a second phase of meeting a social need through universities. Some will argue that baby boomers cannot return to low consumption, efficient housing, and live on college campuses, where they walk or bike, rather than drive SUV's. They will argue boomers must continue to consume and spend excessively, as they have, or they will wreck the economy. But a university lifestyle, returning to college full time, has the immediate advantage of removing boomers from the economy, creating opportunities for our youth to find employment now. Isn't it time for our kids to find work, move up company ladders, start families, buy homes and cars and otherwise have the lifestyle that we were lucky enough to have. It has the longer term advantage of making our older population more functional in their encore careers, assisting with poverty, health, environmental, educational and other social/economic needs. I am not suggesting some form of socialism, creating a welfare state of old people on campuses. A university lifestyle, is not a "housing project" for the old. It is more of a haitus, where participants later emerge in new, more relevant and functional roles in today's society. By the way, have you ever noticed, as I have, the healthy longevity of university professors? It seems they live longer, are fully engaged and contributing to society. Is this due, in part to their lifestyle? Their hours and days of work? If a person is 50, and returned to college for 4 or more years to obtain a PhD or different degree, could they emerge as the new professors or other "knowledge workers" needed for their next 30 years? Cognitive skills can often far outlive physical abilities and it seems a shame to waste our human capital saying "Welcome to Walmart", or spending time on macaroni art. Will higher education preserve the university "Ivory Towers" by creating barriers to entry, or be biased, create the expectency that a person starting at 50 or 60 cannot become a professor? Or will higher education view beyond the immediate, and help with their larger, eminant social purpose? There are some who have built adult, senior or retirement communities affiliated with universities. But current models often offer "personal enrichment classes", or educational vacations, rather than true higher education with a purpose(inter generational classes with the regular students). And even where elders may participate in regular degree programs, there are barriers to entry. An 18 year old does not pay $200,000 to $400,000, up front, to live on campus while obtaining a degree, so I do not understand why a 50 or 60 year old would be expected to do so. Who would give up perhaps a majority of their life savings in up front costs, then pay market rents on top of this? Some may argue, that if the author wants to go back to college at 50, just do it, there is nothing stopping him/her. But what is needed is further development of the social side of this concept. A community of mid lifers, on campus with greater cohort connectedness. Mid lifers are not likely to enjoy living in dorms with 20 year olds, making ready for the next beer bash and I am sure the feeling is mutual. However, young students may be more accepting of mid lifers in the classroom, where real world experience might add relevance to their education. Peter F Drucker, management guru, was quoted "The first step in a growth policy is not to decide where and how to grow. It is to decide what to abandon. In order to grow, a business must have a systematic policy to get rid of the outgrown, the obsolete, the unproductive." I would add this is applicable to personal lives as well, where the large homes, SUV's and items needed for "the family years" should be abandoned to enable growth. Our government should also consider abandoning spending on infrastucture projects that were appropriate 50 years ago, not now. So, what has to happen?-public private partnerships where:
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