A hunch: Boomers inherited money is floating the economy.

[elehhhhna]

Haven't seen stat. proof, yet, but face it: American Boomers stand to inherit more wealth than any generation or other large group in the history of the planet (thanks in large part to the GI Bill, which educated their Dads and gave them cheap, no-point VA mortgages...)

They've started to inherit already and it should peak in the next several years. Now that there's no Inheritance tax the windfalls will be astounding. (Well, not for us, though--we at Casa Elehhhna don't have big bux hanging off the Family Tree(s)...)

If anybody sees stats or reports on this, please direct me to 'em.

[jedr]

1. don't know what your point is?

if your against the g.i.bill and v.a. mortgages, as a vet , let me tell you your wrong...as a boomer , I don't understand the hate...is this the result of the social security campaign which is pushing the fact that because a generation was all born in a short time period that we somehow ruined everything... I will inherit a small amount....mostly because my fathers $6,000 house is worth over $100,000 today...if your com paint is about the super rich...what did you expect????they will continue to take care of themselves...as far as this money holding up the economy....it damn sure isn't well paying jobs

[KayLaw]

2. I didn't take the comments that way

In our case, yes, money I inherited is keeping us afloat as my husband only got a 1% raise last year. I'm hoping to inherit more money someday, but worry about leaving enough for my kids, especially if the Republicans manage to kill off SS.

If it weren't for the SS money my mother and I got when my father was killed, and the SS, Medicare, and government pension my stepfather get gets, even I wouldn't stand to inherit. I think that's what the OP meant.

[jedr]

4. thanks for the comment:

I love the interaction of this web-site

[elehhhhna]

13. you got it. it's ironic that the programs the reeps so loathe...

like VA, SS (which kept us out of poverty when my Dad died young..., etc. are the very programs that made the middle class.

Perhaps they have no use for us anymore?
"U.S. Middle Class to be Outsourced Offshore"

Bids are being accepted by Halliburton's KBR, Inc. Unit (P. O. Box One, Grand Cayman, B.V.I.)from various countries willing to accept Americas obsolete middle class. India, Phillipines, and Costa Rica are front-runners in the hotly contested bidding

Outliers such as Bosnia, whose Government recently made news with a multi-million dollar prime-tiime U.S. promotional ad buy, are touting their "change of seasons" and "snow" as potential benefits to Middle-class outsourcees. The U.S. Government, however, has made it clear that "...the wishes and preferences of future offshored middle class Americans will be given no consideration" due to cost-containment issues.

[elehhhhna]

9. I am firmly FOR VA loan and tuition programs...they should be expanded!

They were responsible in many ways for the invention of the middle-class here. (Unions were crucial too.)

You got my point thought--it ain't wage money that's driving current consumer spending. It's not profit-taking from the markets, either. It's home equity loans and inherited money.

[jedr]

16. thanks for the clarification:

I understand this better now

[bleedingheart]

3. they are dumping that money into McMansions....

but they are then conversely loading up the credit card debt to pay to furnish them....

give it time and we will see another great depression

[jedr]

12. an other depression.

is being set up as we speak....the super rich have emptied the Treasury, capitalized themselves,exported jobs and will now wait so a severe recession will empty the playing field of any challengers....haveing common people make real money in the Clinton years scared these people to death...the scull and cross bones people want things to be like they were 100 yrs ago when our grandfathers died in the mines in their mid forties and made them ( Mellon's etc) rich in the process...the sad part is that those with the most to lose are the ones backing Bush

[Bridget Burke]

5. One Boomer here...

Both parents gone--one recently, the other many years ago. (My father missed the GI bill since he already had family responsibilities--to a widowed mother, wife & brand new child. Then he was called back on acive duty & died long before he could earn much money. Or before any of his children were old enough to remember him.)

No inheritance to speak of. But most estates aren't big enough that the old inheritance taxes would have kicked in, anyway.

[elehhhhna]

14. so sorry about your parents.

i read a lot of your posts and Bridget, they raised a damn smart daughter.

[no_hypocrisy]

6. There's a sunset provision on the estate tax "reform". That is,

on December 31, 2010 (is that year right?), it will be the last day that beneficiaries of an estate can be free of paying ANY estate tax whatsoever (name your amount: $10 million, $100 million, $50 billion) to the federal government.

However, the very next day, January 1, 2011, the estate tax will be re-instituted to its original amount of the estate before the reform (I'm guessing no tax up to $650,000 per spouse).

That means * will try to make the estate tax "reform" permanent on the argument that if Congress DOESN'T make it permanent, there will be a lot of unexplained "natural" deaths in rich families in order to get in under the December 31, 2010 deadline. He will figure that he and Congress never considered the possible unexpected and unpleasant repercussions of an otherwise good law.

[haele]

7. I'm thinking that may be a factor economists are ignoring...

There's a financial planning/estate planning guru on late drivetime on our AA channel; the times I'm stuck in traffic and listening, he's always talking to either people who are dealing with the windfall in an estate issue or people who need a windfall to be able to get out of an economic downward spiral, and it always sounds difficult. From the samples I've heard, the callers recieving money usually have no clue how much planning they need to keep the some of the money as seed funds and not just blow the remainder after paying off all their debts and fixing items that have needed repair for years. The people without any money coming in, are desperate for any way of getting out of debt, and he usually ends up discussing current forms of bankruptcy or debt reduction plans that may or may not help them.
Of course, we're living in one of the highest cost of living areas in the country.
I know personally that even on wages that can be considered average American middle class (appx $45K - $50K a year for a family of three with pets and a paid off vehicle), we are still only one paycheck away from being in the streets and have to curtail any large expenditures until we can plan ahead. Inflation on food and gas are killing us; we shouldn't be spending $200 a week on just plain, healthy food and gas to go to work.
Also kids - especially teens - are expensive critters, and don't have a clue when they're wasting hard earned money.
A windfall settlement of even 20K after taxes will pay off everything, allow us to move wisely (allow us to investigate neighborhoods for a good value residence closer to work - heck, or buy us a previously owned mobile home outright and live in a trailer park for half of what we would pay in rent).

Both sets of our parents are from that post-depression/pre-WWII-just before the boomer generation that were able to invest in the 60's and 70's, and had jobs that paid livable wages until they retired to keep them pretty much out of debt and able to buy a primary residence. Should something happen to either sets, since we both only have one sibling, there should be a substantial windfall to both of siblings - enough so that we might only have to worry about property taxes and utilities for the rest of our lives if we spend wisely on the big ticket items we might want.
The big caveat is that, I don't know what would happen as pensions start to peter out and inflation takes over any COL increases their retirement might have. If our parent's medical and inflation overtakes their retirement income, they may end up having to move in with us.

Haele

[SmokingJacket]

8. Interesting thought.

My parents are boomers (older) and everytime they've made any big move (built a house, added on, that sort of thing) it was when someone from their parents' generation died and left them some money. That generation, even the working classes like my family, had very good pensions and kept their jobs forever. My great aunt worked as a secretary at the electric company her whole life, lived modestly, and left my mom over $100,000.

Things are changing. I've already been warned not to expect any inherited money myself!

[elehhhhna]

15. great Aunt Nora had lots of dough until

some asshole lawyer in Cicero, Illinois ( Hello? There's your first clue he's crooked!) chiseled every penny of it when she ws in her 90's. She was otherwise very, very sharp but he really conned her.

[Egalitariat]

10. There is definitely still an inheritance tax

There is only one year there will be no inheritance tax and that isn't until 2010.

Plenty of time left to change that.

[Skidmore]

11. Yeah, that

$10K left after covering my parents' funerals, medical expenses, and other unpaid debt at the time of their deaths is sustaining me and kids in comfort. We haven't had to lift a finger. My dad was a vet too and believe me when you have catastrophic illness, it can decimate your savings. My parents were people who lived frugally, too. I daresay there are many like them. I seriously doubt that most people are going to inherit windfalls.

For Casa Skidmore, that $10K has been the seed money for a fund in our family to help the grandchildren with purchasing books and other associated expenses if they go on for college or trade school.