It seems about every 15 years, our country has to go through a "reset" as GE CEO Jeffrey Immelt put it. We went through recessionary periods in the 70's, early 80's, early 90's and now. We had a little bit of a recession foisted upon us by 911 as well.
In each of these cases there were buttons that could be pushed to get things rolling. This recession is different. This recesssion isn't caused by us not having enough stuff. It's caused by us having TOO MUCH stuff and the value of those things being devalued because of over supply. We have too many houses, too many cars, too many ipods, too many wants, too many needs.
And, our government and many businesses now have all kinds of legacy commitments to health care, Medicare, Social Security, and all kinds of rules that have to be followed that cost money, big money.
The first step in our recovery as a society is to recognize that we live longer and we can be viable in the work force for a longer period of time. Paid retirement at 62 or 65 is no longer feasible in today's economic environment. We can't afford it.
We can't have pensions start after 30 years of work at the same place. People are too young and too big a liability to our society. GM has a $2000 bill to pay on every car it produces for these pensions. It's just too big a burden for GM to pay. GM didn't know people would live an extra 10 years when they negotiated these contracts. The same is true with teachers and government contracts.
If we move retirement age back five years, assuming the average retiree costs $20,000 a year, we would save $300 billion a year. And, those workers would be producing tax revenue to make the impact even greater.
Over the years, we have been asked to pay for people living longer. You might say people are outliving their warranties. When the potential of retirement time can legitimately last longer than a person's working years, there is something wrong with the system
In a few short years, two average workers are going to have to support an average retiree. And, we all know, as people grow older, they get much more expensive to care for. And, statistically, older people buy less stuff to support those workers. It's a formula that cannot work.
Until we get the politicians to get up the courage to say no to "early" retirement, and risk losing the vote of the largest and most reliable voting block, we won't have any kind of solution to our economic problems.
President Obama, it's time to act.