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I had an economics professor who commented offhand that, while we spend so much energy debating wealth transfer from rich-to-poor (or vis versa), the entire US

I had an economics professor who commented offhand that, while we spend so much energy debating wealth transfer from rich-to-poor (or vis versa), the entire US economy is functionally built to transfer wealth from young to old. Part of the reason affordability is so bad is that we have one of the largest, wealthiest population of non-working adults (retirees) that has ever existed in the world ever. And US financial policy specifically encouraged real-estate to be a primary vehicle for that wealth.

psychlops 3y ago
I came here to say this, but you said it way better. I don't think it is understood enough that the older population is getting and keeping wealth at an accelerated rate. The entire concept of 30 year treasury bonds transfers debt of the current generation onto the next and nobody seems to question it. Younger generations just understand that the system is rigged and have looked for other methods (socialism) to even the playing field again. They aren't wrong in their goals, but current proposals are sadly ignorant.
jackcosgrove 3y ago
The situation is more acute in developed countries where older people outnumber younger people. There is very little likelihood of reform in those places.
xnx 3y ago
> we have one of the largest, wealthiest population of non-working adults (retirees) that has ever existed in the world ever This is an interesting topic that doesn't seem like it gets a proportional amount of attention. What becomes of those assets as that generation gets too old to live in their own homes or dies? For retirees that have chosen to "age in place" in their oversized homes (i.e. built for 4-5 people, but now holding 2), what becomes of those properties. This is one way the housing "crisis" could sort itself out.
PopAlongKid 3y ago
> the entire US economy is functionally built to transfer wealth from young to old. Until the old die, which they inevitably do, and then the transfer completes the cycle back to the young. >largest, wealthiest population of non-working adults (retirees) What does that have to do with affordability? Most of the current income of these "retirees" is based on the work they did earlier in life (Soc. Security[0], 401k/IRA withdrawals). Further, you seem to be conflating "non-working" with being non-paid. Many of these retirees are providing unpaid daycare to grandchildren, unpaid assisted living service to other elder family members, or volunteer positions in the community. [0]Yes, I understand that today's Soc. Security is funded mostly by today's wage earners, but not all of it. On an inflation adjusted basis, a good chunk of Soc. Sec. benefit is just the taxpayer's own FICA taxes that have been earning interest over time coming back to them, as well as the income taxes they pay on those very same Soc. Security benefits.
- pc86 3y ago
  I'm not sure I'd say a 90 year old dying and transferring their wealth to their child a few years before that child retires "back to the young." The largest collectors of inheritance are those above the age of 50.
- folli 3y ago
  > Until the old die, which they inevitably do, and then the transfer completes the cycle back to the young. It will transfer to the middle aged who will become the old soon. It won't cycle back to the young.
  - readthenotes1 3y ago
    Fentanyl doesn't affect the old affluent equitably. My great granddad died at 90, my grandad is 93. Lord knows how old I'll be when I inherit...
  - vidanay 3y ago
    > It will transfer to the middle aged who will become the old soon. It will transfer into the health care system and wealthy share holders.
    - coffeedan 3y ago
      ^^^ This! All but the wealthiest of retirees who make it into their 80’s and 90’s will spend any money they have on healthcare, until they are broke and then go on Medicaid.
    - lxm 3y ago
      As well as other participants https://news.ycombinator.com/item?id=38098779 https://news.ycombinator.com/item?id=38098779
  - lazide 3y ago
    The middle aged (parents) are the ones who are helping their kids. And pay the majority of the taxes that fund almost everything. The ‘living with your parents’ meme may be tough - but not nearly as tough as having homeless parents!
karaterobot 3y ago
Here's an honest question: assuming that wealth is getting transferred from one party to another in any system you choose, why is this less desirable than another configuration?

psychlops 3y ago

I came here to say this, but you said it way better. I don't think it is understood enough that the older population is getting and keeping wealth at an accelerated rate. The entire concept of 30 year treasury bonds transfers debt of the current generation onto the next and nobody seems to question it. Younger generations just understand that the system is rigged and have looked for other methods (socialism) to even the playing field again. They aren't wrong in their goals, but current proposals are sadly ignorant.

jackcosgrove 3y ago

The situation is more acute in developed countries where older people outnumber younger people. There is very little likelihood of reform in those places.

xnx 3y ago

> we have one of the largest, wealthiest population of non-working adults (retirees) that has ever existed in the world ever This is an interesting topic that doesn't seem like it gets a proportional amount of attention. What becomes of those assets as that generation gets too old to live in their own homes or dies? For retirees that have chosen to "age in place" in their oversized homes (i.e. built for 4-5 people, but now holding 2), what becomes of those properties. This is one way the housing "crisis" could sort itself out.

PopAlongKid 3y ago

> the entire US economy is functionally built to transfer wealth from young to old. Until the old die, which they inevitably do, and then the transfer completes the cycle back to the young. >largest, wealthiest population of non-working adults (retirees) What does that have to do with affordability? Most of the current income of these "retirees" is based on the work they did earlier in life (Soc. Security[0], 401k/IRA withdrawals). Further, you seem to be conflating "non-working" with being non-paid. Many of these retirees are providing unpaid daycare to grandchildren, unpaid assisted living service to other elder family members, or volunteer positions in the community. [0]Yes, I understand that today's Soc. Security is funded mostly by today's wage earners, but not all of it. On an inflation adjusted basis, a good chunk of Soc. Sec. benefit is just the taxpayer's own FICA taxes that have been earning interest over time coming back to them, as well as the income taxes they pay on those very same Soc. Security benefits.

pc86 3y ago
I'm not sure I'd say a 90 year old dying and transferring their wealth to their child a few years before that child retires "back to the young." The largest collectors of inheritance are those above the age of 50.
folli 3y ago
> Until the old die, which they inevitably do, and then the transfer completes the cycle back to the young. It will transfer to the middle aged who will become the old soon. It won't cycle back to the young.
- readthenotes1 3y ago
  Fentanyl doesn't affect the old affluent equitably. My great granddad died at 90, my grandad is 93. Lord knows how old I'll be when I inherit...
- vidanay 3y ago
  > It will transfer to the middle aged who will become the old soon. It will transfer into the health care system and wealthy share holders.
  - coffeedan 3y ago
    ^^^ This! All but the wealthiest of retirees who make it into their 80’s and 90’s will spend any money they have on healthcare, until they are broke and then go on Medicaid.
  - lxm 3y ago
    As well as other participants https://news.ycombinator.com/item?id=38098779 https://news.ycombinator.com/item?id=38098779
- lazide 3y ago
  The middle aged (parents) are the ones who are helping their kids. And pay the majority of the taxes that fund almost everything. The ‘living with your parents’ meme may be tough - but not nearly as tough as having homeless parents!

karaterobot 3y ago

Here's an honest question: assuming that wealth is getting transferred from one party to another in any system you choose, why is this less desirable than another configuration?