The Monday Morning Stimulus

Barron's, Coffee prices aren’t the only problem. How retirees can fight inflation.

Make your coffee at home, they said. You’ll retire sooner without a daily Starbucks run cutting into your 401(k) contributions. But small indulgences aren’t the thing standing between many Americans and a comfortable retirement. That would be structural problems like the high cost of housing, wages that haven’t kept pace with inflation, and a fraying social safety net.

Also, have you seen how much coffee beans cost? Coffee prices are up 18.5% year over year, according to the latest government data. Inflation has come for our caffeine fix, whether we brew at home or take it to go.

My household has started buying whatever coffee brand is on sale. Mind you, this is just to shave a few dollars off our grocery bill, not because it’s going to help us retire any sooner. For a fighting chance at that, you need the right kind of investments. Some pros like sectors of the stock market, such as real estate, that can raise their prices with inflation. Bonds and cash alone aren’t going to cut it.

Coffee prices are the least of our problems. We buy whatever is on sale at the Dollar General up the road in St. Leonard. If the cost of coffee is messing up your retirement, you didn't plan right.

Linked as blog of the day at The Pirates Cove If All You See…. The Wombat has Rule 5 Sunday: A Common Enemy up and garnering clicks at The Other McCain.

Sorry, Kids!

From the Atlantic, but it still has grains of truth: The Boomers Ruined Everything, The mistakes of the past are fast creating a crisis for younger Americans.

The Baby Boomers ruined America. That sounds like a hyperbolic claim, but it’s one way to state what I found as I tried to solve a riddle. American society is going through a strange set of shifts: Even as cultural values are in rapid flux, political institutions seem frozen in time. The average U.S. state constitution is more than 100 years old. We are in the third-longest period without a constitutional amendment in American history: The longest such period ended in the Civil War. So what’s to blame for this institutional aging?

One possibility is simply that Americans got older. The average American was 32 years old in 2000, and 37 in 2018. The retiree share of the population is booming, while birth rates are plummeting. When a society gets older, its politics change. Older voters have different interests than younger voters: Cuts to retiree-focused benefits are scarier, while long-term problems such as excessive student debt, climate change, and low birth rates are more easily ignored.

But it’s not just aging. In a variety of different areas, the Baby Boom generation created, advanced, or preserved policies that made American institutions less dynamic. In a recent report for the American Enterprise Institute, I looked at issues including housing, work rules, higher education, law enforcement, and public budgeting, and found a consistent pattern: The political ascendancy of the Boomers brought with it tightening control and stricter regulation, making it harder to succeed in America. This lack of dynamism largely hasn’t hurt Boomers, but the mistakes of the past are fast becoming a crisis for younger Americans. . . .

Reign of Pain Update: Feds Rush the Exits

 From yesterday's Izvestia Washington Post: Wave of retirements hitting federal workforce

The number of executive branch employees retiring this fiscal year, which ends next month, is on track to be nearly twice the total who retired in 2009, according to government figures. And the rate looks certain to accelerate. In 2000, about 94,000 people age 60 and older worked for the government. Last year, the number was 262,000.

So one reason for the increase in retirements is simply the large demographic bulge in 'baby boomers', who are rapidly approaching the age at which retirement seems a better option than working.

The exits are helping to bring down the size of the federal payroll and — where funding is available — could afford agencies the chance to hire younger workers with crucial skills. The retirement of clerks could clear the way for experts in cybersecurity and information technology.

That would seem to be a positive to me.  Getting getting rid of Encouraging the higher paid people with older skills to retire, and replacing them with younger people with more recent training at lower pay scales seems win-win to me.  Of course, there will be some older workers with important skills, but short of an immortality potion, that will always be a problem.  As Charles De Gaul said "The graveyards are full of indispensable men."  The Frogs always were sexist bastards; it's women too.  And it looks like he plagiarized the quote.

Of course, the Washington Post being the Democratic Party's hometown paper, we are supposed to feel sorry for those leaving cushy jobs after accumulating a hefty pension at tax payers expense.

In interviews, recently retired senior executives from across the government offered a range of reasons for their decisions to leave. Most cited the pay freeze, the public’s negative opinion about federal workers and government spending cuts, which have resulted in furloughs, less overtime and a larger workload for many.

 Poor babies.