It is not possible to understand the economy without understanding the culture that lies behind it. Below are some key facts:
1. The traditonal pension plan is disappearing. In 1980, 39 percent of private-sector workers had a guaranteed income for retirement. Today it is 15 percent.
2. Many retirees banked on their homes for retiremen funds. But, a decline of around one-third in housing prices has altered that. Around 20 percent of homeowners owe more on their mortgages than their home is worth.
3. The personal savings rate averaged around 10 percent in the 1970s-1980s. But, by 2007, the rate dropped to negative.
4. About three-quarters of people file for Social Security as soon as they are eligible at 62. Early retirement means that people after 62 have no work income out of which more savings could be set aside. Yet, these are the years when income is the greatest making savings easier.
We have a culture of living it up now, and the devel take the hindmost. No wonder that we have a lot of grouchy seniors who want to blame government taxes and spending for their troubles.