I Forgot One Other Thing

I believe one other thing that is going to have a major impact on the looming Depression (yes I said DEPRESSION, not RECESSION) is the fact that the baby boomers are all leaving the workforce.

There are at least 3 elements to this that I can think of:

1. Less workers = less tax revenue for the government. This as we know is a huge problem for future workers in terms of social security. But beyond that, the income tax stream is also going to be choked off. Just a couple days ago, they said there were more job losses for the month of January than any month in the previous 5 years. Yet the actual unemployment rate did not drop. They said this is because there were less people looking for jobs. You can interpert this 2 ways - unemployed people have given up looking for jobs, OR (and nobody seems to be mentioning this), this is due to workers LEAVING the workforce - i.e. RETIRING.

2. Because they are retiring, they are going to start drawing on their retirement savings. Most people's nest eggs are in the stock market. When they retire, typically they move some or all of it to more stable, less risky investment choices. By this many people taking their money out of the market, selling pressure will increase, when comined with other instability in the economy, possibly causing a market crash.

3. Healthcare crisis. As these baby boomers age, the strain on the healthcare system will be to the point of breaking. If something were to occur on a national scale (Bird Flu? or some other variant of the flu), we'd be seriously screwed. There aren't enough hospital beds to go around in many areas of the country as it is now, not enough nurses, surgeons and other healthcare professionals.

Throw all this in with the items I previously mentioned, and we are definitely heading for something bad. Very bad.