Hedge fund manager Stanley Druckenmiller has been speaking out about generational theft for quite some time, and he’s still warning the younger generation about it. Today a video clip of him speaking with Geoffrey Canada and Bowdoin College President Barry Mills surfaced (via Business Insider). Again, he focused on why he’s concerned that the younger generation is basically getting cheated by the Baby Boomer population.
Druckenmiller’s concern about demographics
One of the questions Mills asked Druckenmiller dealt with demographics and why he was concerned about them. He said he started worrying in 1994:
“I knew that in 2011 the ‘Baby Boomers‘…the front end of it was going to turn 65,” he said. “And you were going to have this huge surge in entitlement payments because again the biggest buckets of entitlements are for the elderly and that part of the population would grow dramatically.”
Who’s entitled to what?
Druckenmiller defines entitlement payments as the benefits people get when they aren’t providing a service currently. He said that even though Democrats and Republicans try to make this a partisan issue, it isn’t. He notes that we saw the biggest increase in entitlement payments under Nixon, Ford and the George W. Bush administrations, which covers both parties.
He said that back in the 1960s, the people in their 20’s consumed more entitlements than those in their 70’s. However, this has gradually changed over time as wealth has transferred, via entitlements, from the young to the old.
“The young’s consumption is up by 38 percent in 30 years, while the old’s consumption is up by 164 percent!” one of his charts proclaims.
It’s the AARP’s fault!
He notes that this is going to be a huge problem over the next decade or two, because the number of Baby Boomers hitting the age of 65 is about to explode. And why is this happening? Druckenmiller pins a large part of the blame on a single organization:
“That’s because basically before you were born and while you’ve been growing up these last 19 years, an organization called the AARP has been lobbying Washington to take money from you and give it to the elderly.”
Of course there’s much more to his presentation, because this is a complex subject, and the AARP isn’t entirely to blame here. Unfortunately for us “younger generation people” though, by 2030, there will be half the amount of young people working to support the old.