Baby Boomers cause of current debt problems? I don't think so

[just john]

So us Baby Boomers are responsible for borrowing and bust?  Tosh

I don't think so, most of my contempories and me have worked all our lives, paid for what we have, without the credit culture of late, and indeed in many cases are the bank of Mum & Dad.

http://www.guardian.co.uk/books/2010/feb/07/the-pinch-david-willetts

Mr Blair has much to answer for.

[pachapapa]

Not guilty!

I remember the penury of World War II; fizzy drinks made from enos fruit salts and concentrated orange juice, cod liver oil, the Radio Doctor and malt...

Always religiously applied the Micawber Principle.

[Rose]

I'm with you John - I'm a baby boomer and have also worked for what I have!

[mint]

I haven't got much but then I didn't work much either...........at least not in an economic sense.  One thing's for sure, no one's given me anything but what do I care?

I'm too busy baby booming!

[idun]

Never thought that I would agree with a tory like that, but what he says is right as far as I am concerned.

Not Mr Blair or Mrs Thatcher but my generation, which in the grand scheme has been priveledged and egotiscal and immoral. I'm the same age as TB.

Where I live now the price of a simple three bed semi is 7 times the average salary, when we were young it was around 3 times, no wonder our kids are 'stuck'.

We are the Bank of Mum and Dad, we have to be, we had all the goodies and left the detritus for the kids.

And will my generation complain when there is no one who cares to care when we are old and are in need, I imagine so, in fact I'd bet on it. IF the government had anysense they would withdraw the vote from us all once we start drawing our pensions.

[Gardengirl]

I also disagree with this idea of baby boomers causing all the country's problems, or not the main thrust of the book - the headline-provoking parts. There are some very interesting thoughts expressed in the book, though, and the reviewer makes some good comments.

I don't have any friends who didn't work hard at their work, saved and paid for what they have; in fact, I can't think of any in the younger generation either!

However, I've only recently discovered that I'm apparently not a baby boomer (born 1945 - 1965)!  So it definitely wasn't me, guv!  [:D]

[Bugsy]

Quote:

"He is symbolic of a type of Tory that has come to prominence over the past twenty years - young, brainy, earnest pious, confident: in a word, insufferable."

Robert Harris

Sort of sums up the privileged muppet who has no idea how ordinary people have worked and struggled to maintain their current standard of living.

.

[AnOther]

I'm a baby boomer and started literally with absolutely zilch having left both school and home on precisely the same day at age 15 with the clothes I stood up in (escaped would be a better description for the latter) and do not in any sense whatsoever believe that I've taken more out of society than I've contributed and resent any suggestion to the contrary.

In fact quite the opposite is true as apart from health care, and even there major events have mostly been paid for by private work related insurance, I have not taken a single penny in unemployment or any other social security benefits. My daughters university education, including Masters degree, was wholly privately funded and having been fortunate enough to be an above average earner for a good part of my working life I've paid what I consider to be well in excess of my fair share of NI and tax too.

I've had mortgages, loans, credit cards etc. but always lived within my means and paid back my debts and on the few occasions I've found myself short I've found ways to earn extra, not gone crying to the state for support.

Personally I firmly believe that the seeds of todays ills were sown in the Thatcher years with the emergence of the 'me me me loadsa money' generation.

In short then, whomevers fault it is it most certainly ain't mine [:@]

[just john]

[quote user="AnOther"] I've had mortgages, loans, credit cards etc. but always lived within my means and paid back my debts and on the few occasions I've found myself short I've found ways to earn extra, not gone crying to the state for support.

Personally I firmly believe that the seeds of todays ills were sown in the Thatcher years with the emergence of the 'me me me loadsa money' generation.

In short then, whomevers fault it is it most certainly ain't mine [:@] [/quote]

I agree with the first part, definitely not the second, Being a baby boomer, I remember a few things, starting with Harold Wilson saying that the labour governments borrowing would not affect the pound in my pocket, and the growth of the social state going back several generations of families who have never worked, worsened by the Tony Blair and Gordon Brown during the last labour government, and staggering sums borrowed to pay for it; upto the fact where it is commonly heard that it's not worth some working when it would affect their benefits. Who paid for that?

[Judith]

Just read the review of the book, and some of the social history (eg the reason why nuclear families are popular in England, why it's different in France (as we know) and the continent, and why in the UK social organisations are therefore more needed and popular) is fascinating.

Though I was indeed born during the dates given for baby boomers, I've never considered myself as one.  It has only been in later life, and by that I mean my late 50's, before I began to have any feel of "bien-être" and I still do not feel that I've boomed.  Maybe in comparison to the young of today I may now be regarded as well off, but like most who've already posted I worked hard for every penny, and sometimes in those very heady days of the 80's when all seemed rosy, I was having great difficulty making ends meet.

What I've got left when I go will go to family, as happened with me and the previous generation.  That is how it is in most "normal" families, you are encourage to work hard and benefit later ......  trouble is most younger people these days want their cake and want to eat it too, whereas we knew we couldn't have it both ways.

[Hoddy]

As with so many others here, I feel that I've given my share to the state. I left school with a reasonably sound basic education, but no qualifications and I've worked hard. Like AnOther I feel that it started to go wrong in the 80s. I was teaching by then and I remember having to beg and borrow resources for the classroom and telling the kids to work hard for qualifications as they laughed at me while while I mopped up the water coming through the leaky roof. One of them even said, "Like you Miss ?"

Since then I don't think there has been a single government which has kept its contract with me.

As for "breaking the inter-generational contract" I inherited nothing material from my parents while there is a good chance that my children will get something from me.

Hoddy

[woolybanana]

The baby boomers built the prosperity that people had until very recently. That has been destroyed by the profligacy of government and the undermining of the work ethic. And by the exporting of jobs and wealth to the emerging economies of the Far East.

Willetts is right to challenge received wisdom as he is essentially an 'ideas man' but this idea should be flushed down the pan asap.

[idun]

My Dad's generation also worked hard and pre war had 'gger all! No shame in getting rid of Hitler even if it left the country is debt. My Dad worked from the age of 7 every day after school to keep food on the table and then was, as an August baby in full time work at 13.

Life for me was 'easy'. I went straight from a decent education to a job and then another and another. Not all on a plate, but in comparison, maybe it was, but no hunger, in fact always properly fed, clothed, shod and housed, holidays too.

History will show 'us' as a greedy lot and sadly I believe that to be completely true as a general rule of thumb.

Discussing this, more or less with a friend the other day, she is just 40 now and feels like she has just missed 'the bad times' and feels that her daughter will have a hard life, as will my kids.

In the early 70's an engineer at British Steel was picking up £300 to £400 a month. That was a great salary, enough to live really well, buy a very nice property, run a car, decent holidays.

Just think about this. Mr X buys his house for £6000 in 1972 and lives there until 2005 when they sell it for £350000 and moves to France. Now THAT discrepancy between what the bankers were prepared to loan for that purchase in 2005 and the original buying price is in simple terms the 'debt' that the whole country is now paying for. It has enriched Mr X who says, I worked hard for my £6000 house and I deserve £350000.

If no one else can see that, well tant pis. It was all greed fuelled, what a legacy, I feel ashamed.

[Rose]

[quote user="idun"]

Just think about this. Mr X buys his house for £6000 in 1972 and lives there until 2005 when they sell it for £350000 and moves to France. Now THAT discrepancy between what the bankers were prepared to loan for that purchase in 2005 and the original buying price is in simple terms the 'debt' that the whole country is now paying for. It has enriched Mr X who says, I worked hard for my £6000 house and I deserve £350000.

If no one else can see that, well tant pis. It was all greed fuelled, what a legacy, I feel ashamed.[/quote]

Idum - that's a huge simplification... my FIL bought a house for £200 after the war... and sold it in 1972 for £6000 and thought he was rich... earlier generations fed off of the commonwealth and before that the slave trade.

You also make a huge assumption that Mr X is here only because he sold a house... I'm not Mr X... nor Mrs X... but I did work very hard, I'm a bit like ANo.... left home young with clothes and a few records and everything I have I've made through work.  Unlike you, I dont feel ashamed.

[AnOther]

Darned double post again !

[AnOther]

I understand what idun is getting at but don't buy it and certainly don't see it as a reason to blame anything on baby boomers. Do I feel sorry for the current young generation, in many ways yes, and not for just the obvious reasons either, but guilty or ashamed, absolutely not.

Apart from the real movers and shakers by and large the rest of us are little more than passengers on the perpetual journey of a society's evolution and we tag along with precious little practical influence on the direction it takes, seldom having the opportunity or power to make or materially change the rules of the game so we do our best to carve out our lives, fortunes, and futures, within them. What other option is or was there.

Despite having the good fortune to become enriched you could still say that we are victims of the times we live in and if you personally choose to be angst ridden over profiting from that then that is your right but I will never be.

[mint]

Well said, Erns.  Basically, we rub along the best we can.  We make decisions about jobs, investments, life partners.  Some of those decisions have worked out and some haven't.

You could say we have been and still are very lucky to be living in countries (UK or France) with stable governments and economies.  We have been the generation who, by and large, did not experience castastrophic wars and certainly where most of us live, we have not seen any major geographic disasters.

When you think of how fragile life is for huge populations in large parts of the world, we can truly count ourselves "top of the heap".  We might have had personal tragedies and sadnesses (who doesn't) but we certainly don't need to feel blame.  Counting our blessings is fine but beating ourselves for being lucky or favoured or whatever is an apt expression for our fortunate lives?

No, no need to look a gift horse in the mouth.....just be grateful and ENJOY!

[suein56]

[quote user="idun"]

Just think about this. Mr X buys his house for £6000 in 1972 and lives there until 2005 when they sell it for £350000 and moves to France .... [/quote]

This interests me as it was towards the end of 1972 when OH and I bought our first house, after renting a flat for 18 months. The property was a 2 up, 2 down end of terrace with a modern extension of small kitchen downstairs topped by a loo and bathroom upstairs. We were both 22 at the time. We really struggled when the mortgage rate increased during the following few years but hung on in there, though it meant our Mini became more welded repairs than original chassis. Looking at the photos of that time we were both extremely slim - I do remember budgeting hard to make the money last to the end of the month; if we ended up with +5p then we were home and dry. We didn't have an overdraft or a credit card and certainly couldn't afford HP.

We could have continued to rent - at a lesser cost than our mortgage and spent the excess on enjoying ourselves - but we chose to buy.

Below is a table of mortgage interest rates during the period in question:

If we look back at interest rates over the last 25 years, we will see a number of fluctuations, some have precipitated fairly dramatic changes in the price of homes. The following is a table of average interest rates for each year.   1971   7.92% 1988 12.13% 1972 8.08% 1989 15.75% 1973 12.10% 1990 16.63% 1974 13.90% 1991 13.42% 1975 12.77% 1992 11.29% 1976 13.90% 1993 7.79% 1977 10.21% 1994 7.35% 1978 11.25% 1995 8.15% 1979 15.96% 1996 7.89% 1980 18.17% 1997 8.56% 1981 15.23% 1998 9.21% 1982 13.80% 1999 7.33% 1983 11.84% 2000 7.98% 1984 11.64% 2001 7.08% 1985 14.17% 2002 6.00% 1986 12.71% 2003 5.69% 1987 11.50% 2004 TBA

Apologies, the table above hasn't translated too well onto here.

Sue

[mint]

What a shock your table was for me, Sue!

But, of course, I do now remember that, because of buying the house, we had to do without a car (though we both needed transport for work) and bought 2 scooters instead!

Not only that, we had to leave St Albans where we lived and moved to the West Country where property was "affordable".  Looking back, I still don't quite know how we afforded our first bungalow!

[suein56]

[quote user="sweet 17"] What a shock your table was for me, Sue! Looking back, I still don't quite know how we afforded our first bungalow! [/quote]

Quite so; which, in a roundabout way, was the point I was hoping to make. In our lives we each make decisions that are valid for a particular moment in time; any other moment and the decision might have been different.

We chose to buy our home in 1972 and we stuck with it although we did find it extremely hard when subsequently/immediately interest rates rose, and continued to rise and remain high for a long, long time. Our offspring have had no such difficulties vis à vis mortgage interest rates and have benefitted from much lower rates all the time they have had mortgages.

So who is at fault ? Us ? Them ?

Sue

[Gardengirl]

That table was very interesting, Sue! We moved from Staffordshire to the south-east in 1974, leaving a semi with a huge garden in a lovely village. Gazumping was happening at the time we were house-hunting, and after many disappointments we finally managed to buy a small box-like house in a tiny patch of garden. It was double the price of the one we had left, but we got the usual 3x salary mortgage, and crossed our fingers. I now know what rate we were paying, thanks to that table! [:(]  Boy, was it hard to make the money go round, and never before or after those few very difficult years was child benefit so welcome. Tuesdays couldn't come round fast enough!

Like many others on this thread, we also started out with nothing at all, having used our savings up to pay for the wedding, and OH went back to university at about the same time to do his MSc, so we lived on my pay. I remember doing some translation work with my OH and another technical chap; we got 20 guineas between the three of us, which was probably a poor rate for the number of hours it took me, but it was such riches!  [:D]

Our kids have never had much from us; when we're gone there might be something left, depending on things like care home fees etc. What they have had was the money we charged them for rent when they started working. They didn't know it, but it went straight into building society accounts for them, and although it wasn't a fortune, it was a start for them - and they definitely knew how to budget by then!

As Sweet has already said, I think our main good fortune has been to live in this part of the world; despite all the ups and downs, we've had stable countries in all senses of the word, which has really been such good luck for us all. With all that's happening in the world just now, all of us can count our blessings. I type that hoping that nobody on here has loved ones in any of the many trouble-spots around the world.

[KathyF]

Like most of you I too am a baby-boomer, born in 1946, one of the true boom of extra children born just after the war ended.. I'm from a working-class background (father worked in a factory, mother was a school cook) but was lucky enough to benefit from a fully-funded university education because of my parents' low income. Apart from the £5000 inherited in 1984 from the sale of my mother's house, which bought us our first new car and first overseas holiday with the children, every penny we now have we have earned (from our middle-ranking jobs in local govt) and saved, instead of blowing it on the latest must-have. (Incidentally, we have never had a credit card, and now could not get one, because we are pensioners with no credit rating....)

I agree that life is going to be harder for our children and grandchildren, especially where employment and pensions are concerned, and we are saving hard to help our grandsons when it comes time for their college education. That said, we have a situation where even in a time of high housing costs and other pressures the younger generations still largely take for granted a standard of material well-being, in terms of consumer goods and leisure possibilities, which would have been unimaginable for me as a child or young adult. And eventually what we have left at the end of our lives will be passed on to our children and grandchildren to help them cope with the financial situation ahead of them.  Do I feel guilty?  No.

[suein56]

[quote user="KathyF"] That said, we have a situation where even in a time of high housing costs and other pressures the younger generations still largely take for granted a standard of material well-being, in terms of consumer goods and leisure possibilities, which would have been unimaginable for me as a child or young adult. [/quote]

IMO very true; I smile when my grandchildren complain of having gone over their monthly limit for texts/calls on their mobile phones and they - rather than their parents who pay the basic rental costs - have to fund the difference. Mobile phones aside, OH and I didn't have a TV for years - combination of lack of enthusiasm for TV against a total lack of funds to be able to afford a set, never mind the licence fee. That said we played a lot of chess.

Sue

[KathyF]

It was our generation, Sue. Didn't have TV at home til I was a teenager and couldn't afford one after we were married . Indeed we could hardly afford to eat at times while My OH was finishing his teacher training.  We did a lot of reading and loved our radio. [:)]

[Cendrillon]

I was 40 before we had our own T.V. and almost the same age when we bought our first car!

"We did a lot of reading and loved our radio." Kathy it was the same for us and we still do this a lot in France where we have no T.V.[:)]