Customer Reviews

The Coming Generational Storm: What You Need to Know about America's Economic Future

5 star:		(25)
4 star:		(12)
3 star:		(4)
2 star:		(4)
1 star:		(3)

 

 

With luck and good living I might live to 2050. My children and their children will see the second half of the 21st century and maybe beyond. Laurence and Scott woke me up to the future that my progeny might have to live in.

A summary of the book is included below, but the important things about this book are:
- it is meticulously researched and well written
- it will make you think about government accounting in a new and fundamentally different way
- it will make you question whether you yourself are behaving farily toward your own children
- after scaring you (and rightfully so) Laurence and Scott will give you hope that the future is not yet written, and suggest practical strategies that you can adopt to improve your own financial future.

Book Summary:

Kotlikoff and Burns have constructed a new way of understanding (primarily U.S.) government economics and forecast a demographically driven economic collision between old and young.

The authors dedicate this work to their 10 grandchildren who are identified by name. They predict that their grandchildren - and ours - will encounter a country whose collective population is older than the current population of Florida. That this situation will be prevalent throughout much of the industrialized world, including China; that we will have a population age profile that reflects "the greatest demographic change in human history"; changing from forever young to forever old; that a new segment has emerged which is the fastest growing population segment; people over 85 years of age. They rely on Bureau of the Census figures that forecast growth of the 85+ segment - from 4,259,000 in year 2000 to 13,552,000. in year 2040. This, and other population trends, will change the ratio of gold-ages to "kids" from 1.8 to 3.0, with all the consequences of supporting an aging population with fewer workers contributing to social programs that were built on a completely different set of assumptions.

The U.S. social programs we have today are largely a creation of a time when "old people" were expected to die shortly after retirement. The basic assumption was a high ratio of working people to retired people. This high ratio made possible a transfer system where each working generation supported the retirement of prior generations. Kotlikoff and Burns report on the reduction in the ratio of workers to beneficiaries: 16.5 to 1 in 1950 down to 3.4 to 1 in 2000. By 2030, they project, there will be only two workers for each beneficiary.

The authors have constructed an intergenerational accounting equation by which they express - and we can understand - the economic pain we are inflicting on our children and our children's children. This equation, they claim, can be used to test all the currently popular proposals for 'easy fixes' as well as a "menu of pain" they themselves propose. As a formula the equation is A = C + D + V - T - H. or....

(A) The burden of debt on future generations =
(C) The present value of government purchases plus
(D) Official debt plus
(V) Implicit debt minus
(T) The present value of taxes paid by current generations minus
(H) The value of Government financial assets.

To change the future the authors present a "menu of pain" (created under the direction of the U.S. treasury secretary) by which the current generation can generate revenues and cut expenditures sufficiently to avoid the coming generational storm. The menu includes

* 69% increase in federal income taxes
* 95% increase in payroll taxes
* 106% reduction in federal purchases (admittedly infeasible)
* 45% reduction in Social Security and Medicare benefits

But all is not lost, the authors claim, and cite the United Kingdom as an example, explaining that policies adopted in the 1980s under Margaret Thatcher have put the UK in the best long-term fiscal shape of any major European Union nation. Finally, the authors propose actions that individuals can take now to protect ourselves and secure our future.

This book covers an amazing amount of information related to the U.S. Government unfunded liabilities in just 8 chapters and 240 pages. The authors study in detail the demographics, economics, and fiscal policies that have lead to the current fiscal crisis. According to the authors the fiscal crisis has already occurred. If the U.S. Government's accounting reflected common standards applied to insurance companies, the U.S. Government would be deemed insolvent. This is because of our huge unfunded liabilities associated with mainly Medicare, but also Social Security.

The book covers several parts, including:
1) Diagnostic of the fiscal crisis (demographic study),
2) Why certain (pseudo) redeeming factors will not alleviate the problem,
3) Why the U.S. will turn in a Banana Republic with hyperinflation,
4) Proposals to fix Social Security and Medicare and resolve our fiscal crisis,
5) An investment guide to protect one self if the fiscal crisis is ongoing.

The authors' persuasiveness of their point of view is erratic from one topic to the next ranging from excellent to really bad.

Their treatment of the first two topics: diagnostic and pseudo redeeming factors are outstanding. The demographics of our aging population represent a tsunami of fiscal costs that have not been provisioned for. Additionally, wave of immigration, improvement in technology, increase in labor productivity will not alleviate these costs. Immigrants cost as much in benefits as they pay in taxes. Technology has actually increased the intensity and the cost of health care. Also, Social Security benefits are fully indexed to inflation and labor productivity index. I give this section a 5 rating.

The authors are convinced that the U.S. Government will be hell bent on decreasing its real unfunded liability by printing money that will result in hyperinflation. I think this is nonsense. The Federal Reserve which is politically independent is the body who controls the levers of the money supply and associated inflation. It will never cause a situation where hyperinflation will take root. We most probably will have real interest rate levels substantially higher than we do now. But, the risk is that such high real interest rate levels will choke economic growth and cause recession and deflation, not inflation as the authors suggest. I give this section a 1 rating.

The authors proposals to fix Social Security and Medicare are excellent, as they make economic and political sense. They are talking of a very slow privatization phase in of Social Security, and a voucher system for Medicare so elderly would make economically informed decision when purchasing health care. I give this section a 5 rating.

Their investment guide unfortunately is piss poor. I'd give this section a 1 rating, here is why. The authors recommend holding as your core investments inflation indexed bonds (either TIPS or I Bonds). However, these bonds give you very mediocre returns before tax. They give you terrible returns after tax. Over the long run, there is little chance you will protect your assets against inflation on an after tax basis with these instruments. They recommend international bonds as a hedge against the inevitable long term depreciation of the dollar [view of the authors]. However, that is unlikely. Per their own demographic study just about all developed countries have a much worse unfunded liability problem than we have. This is because their societies are aging more rapidly and their government benefits are more generous. If the dollar has to tank, you have to wonder against what? From a long term demographic perspective there are no clear candidates. Finally, the authors also recommend gold as an investment, especially through gold mining companies. I think only a gold bug could follow this recommendation. Gold has little merit as an investment. It's proclaimed inflation hedging benefits have melted away twenty years ago.

If you are further interested in this subject, I also strongly recommend two excellent books by Robert Stowe England: "The Fiscal Challenge of an Aging Industrial World" and "Global Aging and Financial Markets." These books give you a better comparison between the U.S. and other developed countries' fiscal position. Regarding investments, I strongly recommend Burton G. Malkiel's "The Random Guide to Investing."

For those who are not already familiar with the problem, this book is an outstanding explanation of this simple fact: the USA is effectively bankrupt. Massive economic upheaval will result from our leaders' inadequate planning, and given the manner in which our political system operates, you can be guaranteed there will be inadequate planning.

I found the authors' specific investment recommendations somewhat lacking in both effectiveness and creativity. For instance, they suggest that the best asset to hold is one's primary residence, because capital gains are excluded up to $500,000 (per couple) and therefore are free from the (much) higher tax rates that are to come. There are at least two major problems with this suggestion. First, $500,000 is an inadequate retirement nest egg for one couple; and in order to access that money, the residence would have to be sold (inconvenient, to say the least). Second, they don't deal adequately with the obvious drawback that "rules can be changed." There is nothing to prevent the government from reducing the cap. gains exclusion on primary residences to $250,000 or $0, or whatever the situation demands. For those who think such changes impossible, recall that private ownership of gold was outlawed during the Depression, so there is precedent for drastic measures in drastic times. Similarly, the authors canonize the Roth IRA because earnings and principal are always tax-free; but those rules could be changed as well. In addition, many moderately high income workers are not eligible for Roth IRAs.

The book could have devoted more space to international investing, physically sending assets overseas, or even moving to other countries.

Those small concerns not withstanding, the book was quite well-written, minimally partisan, and factually right on-the-mark. A must-read book, especially for Generations X and Y.

This book has my early vote for best economics/finance book of the year. At times your may find this deep reading because some of the concepts are new and unfamiliar to most, even though there is no math to contend with beyond A + B = C + D. But getting this clear explanation of the concept of inter-generational accounting is well worth the effort. I must say the authors demonstrate a tour de force here in terms of judgement about what they have chosen to cover, the quality of the writing, and the practical significance of their work. Not only do they delineate a problem of stark importance to all Americans, they go a long way in describing what may be the best chance of minimizing the damage to our country and to individual investors. And I personally rate their investing advice as both practical and right on the money. Who could reasonably ask for anything more?
One final thought - I would love to get George Bush and John Kerry to read this book - especially Chapter 6 on Effectively (with a capital E) reforming Medicare and Social Security. I will be surprised (and disappointed)if this book doesn't generate wide discussion of the enormity we all face.
Dr. Ron Chesler

The Coming Generational Storm is an important book about a critical long-term problem facing the U.S. government, which spineless politicians in both parties choose to ignore at great expense to future generations.

The problem arises because Social Security, Medicare, and Medicaid were not designed to fiscally withstand significant demographic changes that are are happening in the 21st century. It's well known that the population of the U.S. (and most industrialized countries) is aging. In this book, Kotlikoff and Burns document this more thoroughly than any other book or article I've seen, and they make it very interesting and compelling. They then discuss how the aging population will stress these three big entitlement programs. An ever-increasing fraction of the population will be drawing funds from these programs, while a decreasing fraction of the population will be working and supporting these programs with their tax dollars.

As a result, if you add up all of the money that the government has promised to pay people through these programs and compare that to all of the tax revenue the government will receive to support these programs, you get a deficit over the long run of $51 trillion.

To put that number into perspective, note that it is roughly equal to the sum of all the income earned by everyone in the United States over the past 5 years!!!

Kotlikoff and Burns explain what the government should do NOW to start fixing this problem, and it involves BIG sacrifices. (They list the options, and call their list "the menu of pain.")

They realistically note, however, that politicians are very short-sighted, always trying to make things look as good as possible before the next election, and have strong incentives to hide the existence of this problem, leaving it for the next generation of politicians. The costs of dealing with this problem will increase exponentially, the longer we wait.

The authors explain the economic problems that are virtually certain to occur if the politicians never muster the backbone to make the tough choices necessary to fix this horrible problem.

The authors offer their own proposals for fundamentally reforming Social Security and Medicare/Medicaid to make the solvency of these programs far less vulnerable to demographic changes. Some of their proposals are controversial, but the fact is we must do SOMETHING, and nobody else is making any serious proposals.

The book includes a chapter with careful advice on how to prepare yourself (how to protect your wealth and secure your future living standard) for the coming fiscal storm.

The book is based on lots of sound research by an economist (one of the book's two authors) who is very widely respected as one of the top two or three leading authorities in the world on this issue, as well as other research done by mainstream economists published in the leading academic and policy journals. All of the work cited in the book is either done by disinterested researchers (those whose work is not supported by any corporation or other body that has a stake in the outcome of the research) or based on the government's own statistics (in cases where those numbers are the most likely to be credible and accurate).

I am an economics professor and I have studied these issues in some depth, yet I learned a LOT of interesting and useful information from this book and I'm sure you will too.

But you don't have to be an economics professor - or even an economics major - to understand this book. The writing style is very accessible.

However, the book nonetheless is not easy to read. While the authors give a definition or explanation for each term and concept they use, I think the book will be a bit of a tough read for most people who have not taken a college-level intro to economics or intro to finance course.

But don't let that stop you: this issue will affect everyone (especially people under 55 or so; older people won't be around when the poo really hits the fan). This book explains the issue and all of its ramifications in a (mostly) very clear way, and makes it interesting and compelling. It's not a happy book, but you will learn a lot and you will be very, very glad you read it.

Highly recommended.

This is about the "big whammy," as the authors term it, a $51-trillion debt that America is piling up that will come home to roost upon the heads of our children and grandchildren. They will not be pleased.

The really scary thing about this story is that, although Kotlikoff and Burns wax hopeful near the end of the book, and indeed present a possible way out of the crisis, one gets the sense that they believe that there will be no remedial action and certainly no cure until the pain sets in, and then it will be too late.

Personally I won't be around to experience any of this, but my grandsons will. According to the authors, my grandsons will be burdened with tax obligations of unprecedented weight and/or runaway inflation of the banana republic variety, or the collapse of the American economy as we know it. It's even possible that they'll have all three, probably in that order.

The main culprits are Social Security, Medicare and Medicaid. Quite simply we are incurring transfer payment obligations to our elderly so enormous that the working population will not be able to pay for them. And the terrible thing is that our government knows this--there have been many studies--but has neither the will nor the desire to do anything about it. Call it the crisis of representative democracy. No one in Congress or in the White House has the guts to tell the American people that we are going bankrupt. Everybody seems to think that the future will take care of itself, or, at any rate, that's THEIR problem. Maybe some fabulous invention or technology will confer upon my grandsons enormous wealth and all the financial obligations will disappear like wisps of clouds on a sunny day.

It is important to note that the present incumbent in the White House has greatly exacerbated the problem by recklessly cutting taxes while going on a wild spending spree so that his friends at Raytheon, Halliburton, Big Oil and Big Pharma will have full capitalization. As the authors note, politicians care almost exclusively about maintaining themselves in office. Consequently they are seldom able to address problems beyond the short horizon of the next election.

In a larger sense, the crisis so vividly and exhaustively described in this strangely readable book isn't about economics at all. It is about demographics. With increasingly aging populations, thanks to modern sanitation, cradle to grave health care, plenty of food and safe water, etc., the highly developed countries now have to figure out who is going to pay for keeping the old folks alive and well. The authors present some solutions: make them work longer, print money so that inflation will dilute the financial obligations, massively tax the working generations, etc. What they do NOT propose is that the elderly be left to fend for themselves, nor do they suggest a modest proposal of the Jonathan Swift variety, say massive euthanasia. Instead they propose a 12% national sales tax. This would be on top of all the other taxes. Imagine in my state (California), where we already have an eight and a quarter percent sales tax, what it would be like adding over twenty percent to the cost of products and services. Guess what? This would put a damper on spending and would greatly increase black market traffic, and probably wouldn't work--which is why Republican think-tankers are scheming to "privatize" Social Security, Medicare and Medicaid, a venture that the authors rightly call "eliminating" Social Security, Medicare and Medicaid.

Well, that's not going to happen. "I'm old and I vote," will say the AARP, and politicians will take notice. And no politician is going to vote for the authors' proposed 12% national sales tax. Read my lips. So what IS going to happen?

Nobody knows. The problem is unprecedented in human history, because never before has the ratio of the old and retired to the young and working been so high.

Historically when governments overspend, they reach for the printing press and flood the market with cheap money. This is what I predict will happened. The US, Japan, and Europe will all go massively under the flood of inflation and will, after horrendous suffering, reemerge to restructure their transfers so that all of the suggestions of the authors are put in place including later retirement, responsible taxation, controlled medical costs, and a more modest lifestyle for all. That is, if we don't have revolutions and a return to some sort of absolute state control.

Some examples of the engaging prose spun out by Kotlikoff (who is an economist) and Burns (who is a journalist):

(After documenting the progressive aging of our populations): "This will not be a phase. We will be older forever." (p. 36)

Perhaps the most important truth in the book is this from page 83:

[What is really happening is] a massive redistribution [of wealth] from young and future Americans to currently living adults. Our de facto generational policy has been to indulge the present at the expense of children living and unborn. This gives new meaning to "no taxation without representation."

They really rub it in a few paragraphs later:

[The AARP] has dropped the word "retired" to attract members in their 50s who aren't yet retired but have the same interest as current retirees: ripping off the next generation.

The book ends with tips on how to protect yourself from the meltdown. Interesting enough, the most important tips are on how to stay healthy, since health is the most important capital one can have. But here's a nice economic tip from page 134: "The government is going to need the budgetary resources that only high inflation can provide. Hence, high inflation is going to occur. Indeed, it's likely to occur sooner than later."

Gold mining stocks, anyone?

You just read my brief review; but I can't understand why the blurbs from the back of the book (including 5 Nobel laureate economists) aren't posted at Amazon, so here they are, lifted from the MIT Web site:

"There's a lot of frivolous criticism of our politicians, but this book hits the mark, convincingly documenting their biggest sin: the failure to account for the magnitude of a huge government deficit crisis. The accounting scandals of Enron, WorldCom, and Parmalat pale by comparison. Read this book so you can start preparing for much higher taxes in the future for you and your children."
--Robert J. Shiller, Yale University, author of Irrational Exuberance and The New Financial Order

"I lie awake nights worrying about the fiscal crisis described in The Coming Generational Storm. This is by far the single most important problem in U.S. economic policy. Every American should read this fabulous book."
--George Akerlof, University of California, Berkeley, Nobel Laureate in Economic Sciences (2001)

"Among academic experts, Larry Kotlikoff has earned the title 'Mr. Generational Accounting.' His unfuzzy arithmetic decisively rebuts the Bush tax cuts, which are based on the delusion that 5 - 4 = 6, not 1. Read and judge for yourself the specter of our future: too many retirees dependent on too few working-age people. Fiscal imprudence now mandates broken promises later."
--Paul A. Samuelson, Massachusetts Institute of Technology, Nobel Laureate in Economic Sciences (1970)

"Brilliant insights on the me generation versus the next generation. Better still, smart advice on equally vexing questions like whether to invest in a 401(k) or a second mortgage."
--Sylvia Nasar, author of A Beautiful Mind

"Between a rock and a hard place. We must all too soon realize that we want to spend more on transfers (Social Security, Medicare, Medicaid) than we are willing to pay in taxes. And the prospective $44 trillion shortfall is, almost literally, beyond ordinary comprehension. Documented diagnosis, along with suggested reforms, are first steps toward constructive dialogue."
--James M. Buchanan, Distinguished Professor Emeritus, George Mason University and Virginia Polytechnic Institute, Nobel Laureate in Economic Sciences (1986)

"No economist has thought more clearly or spoken more resolutely about our long-term fiscal challenges than Larry Kotlikoff. In plain talk backed by economic rigor and the powerful models that he and his colleagues have pioneered, Kotlikoff and coauthor Scott Burns expose the shoddy thinking and false premises that lie at the heart of U.S. fiscal policy and that risk the economic well-being of future generations. They show how reckless George W. Bush has been with our economic future, but also show that the evasions from fiscal honesty extend well beyond the irresponsibility of this administration. And they offer solutions that are clear, bold, and controversial. You may not accept them in full, but you will understand better than ever before the real choices that we face. This book is a must-read for a country adrift in fiscal shortsightedness and political spin."
--Jeffrey D. Sachs, Director of the Earth Institute, Columbia University

"Kotlikoff has been one of the pioneers of the new economics of generational accounting. If anyone foresaw the deterioration of the U.S. government's fiscal health, he did. Now, with journalist Scott Burns, he has written a book that spells out, in crystal-clear layman's terms, the disturbing truth about the rising tide of red ink."
--Niall Ferguson, Stern School of Business, New York University, and author of Empire and The Cash Nexus

"The Coming Generational Storm is a well written summary of an impressive and important body of carefully documented research. The book demonstrates clearly the folly of existing tax and transfer policies in the face of the impending retirement of the baby boom generation. Anyone interested in the future economic viability of American society and the economic problems we are bequeathing to our children should read this study."
--James J. Heckman, The University of Chicago, Nobel Laureate in Economic Sciences (2000)

"The Coming Generational Storm is one of the most important (and refreshingly irreverent) policy analyses of recent years. Laurence Kotlikoff and Scott Burns ask what will happen to our economy and way of life when the baby boomers meet the current Medicare and Social Security systems. Their answers, using the innovative techniques of 'generational accounting' developed by Kotlikoff and others, demonstrate how close we are to a genuine fiscal precipice and the hard landing that awaits us. For our current presidential aspirants, the authors also provide some provocative ideas for how to ameliorate the damage this storm will certainly leave in its wake."
--Robert J. Shapiro, Senior Fellow of the Brookings Institution and the Progressive Policy Institute, and former Under Secretary of Commerce for Economic Affairs

"The Coming Generational Storm documents in frightening detail America's reckless fiscal trajectory as it barrels toward bankruptcy. The need to revamp Medicare and Social Security is urgent. This book is a must-read for anyone who cares about our nation's future."
--Janet Yellen, University of California, Berkeley, Member, Federal Reserve Board (1994-1997), and Chair, Council of Economic Advisers (1997-1999)

"If Stephen King wrote about economics it would look like this. Kotlikoff and Burns have gazed into our future and seen a nightmare. The authors describe that nighmare vividly and identify why our elected officials on both sides of the political aisle are too cowardly to save us. Every U.S. citizen should read and digest this book before it is too late."
--Kevin A. Hassett, Director of Economic Policy Studies, American Enterprise Institute, and co-author of Dow 36,000

A great book, very readable. It does have some equations, but they are not essential to the argument; feel free to skip them. I found the explanation of how the deficit has been fudged to conceal the huge future liabilities of the U.S. government fascinating. A "balanced" budget can conceal big liabilities. Did you know that Dwight Eisenhower was the most profligate President of all time? Read the book and find out why!

Depending on which historian you consult, I was born in either the last year or so of the Baby Boom or the first year of the Baby Bust. Either way, according to the authors' calculations I am going to end up paying more in taxes to support Social Security and Medicare than I can ever hope to receive in benefits. My eight-year-old son, of course, is in an even worse position. I liked the book's characterization of today's children as being taxed without representation. Amen!

As far as Social Security, the authors' proposals are the most realistic I have seen. They certainly deserve serious consideration. I am somewhat more skeptical of Kotlikoff's and Burns' Medicare reform ideas. There have been dozens of attempts to rein in Medicare costs, but none have made any difference. The problem is that decades of insulating people from the real cost of medical care has put their expectations completely out of line with fiscal reality. My personal opinion is that we will have to abolish Medicare altogether, at least temporarily, so that people will be able to understand what high-tech medicine really costs when they have to pay for it themselves. This lesson might not be as bad as it sounds. Keep in mind that there are countries that spend enormously less than we do on health care, and yet have health nearly as good as ours, or in some cases better. Having someone there to hold your hand when you are sick has a surprisingly good cost-benefit ratio compared to conventional American high tech medicine.

I differ with the authors on a few things. The authors mention the World War II Greatest Generation in a way that seems to suggest that it is the Baby Boomers who are to blame for our present fiscal problems. This is true in the sense that it's the demographic bulge of the Boomers that is causing many of our problems. But who is responsible for the Boomers? The World War II generation, that's who. The WW II veterans came back from the war with the idea that American know-how could do anything, that prosperity would go on forever, and that they could invite as many new people to this party as they wanted. Well they were wrong, but they're still voting benefits for themselves, and they have apparently long since forgotten the Depression Era lessons they learned about debt being a bad thing. Today they are the most pampered seniors of all time, with people like me paying for it all. In my opinion, the Social Security/Medicare systems have created an aristocratic leisure class in America. The Greatest Generation? I would suggest that today's seniors start wising up. Otherwise, they may be remembered as the Worst Generation.

The authors suggest exercising and taking other steps to preserve one's health as a good way to prepare for the coming fiscal crisis. I think it's important to add here that Americans' lack of exercise and poor eating habits are not only personal failings. They are the natural result of designing our cities and towns around cars, making it difficult to walk anywhere, and subsidizing agricultural production. For a start on the subject of urban design, see Shoup's book "The High Cost of Free Parking" and Kunstler's "The Geography of Nowhere."

Kotlikoff and Burns are careful to make the most generous assumptions possible about future economic growth and government revenue. I think their projections are way too optimistic. For one thing, they ignore the fact that much of today's economic growth is illusionary. The most common way of measuring economic growth, GDP, is a measure so inaccurate as to be completely misleading. It takes no account of the effects of population growth, exhaustion of resources, or decline in the quality of life. More accurate measures of economic growth, such as the Index of Sustainable Economic Welfare and the Genuine Progress Indicator, show that there has been little or no real economic growth since the 1970s. The passage of Hubbert's oil peak, global warming, and the numerous other environmental problems of today's world are going to have an even more serious negative impact in the future. For more on this, see Kunstler's book "The Long Emergency," or Daly's "Beyond Growth."

The authors are skeptical that our government will be able to pull itself together and solve its fiscal problems without resorting to printing money. I hope they're wrong, but I have to agree with them here.

The authors don't mention this, but there's plenty of research showing that wealthier people are not happier. If we focused our efforts on improving America's quality of life instead of piling up more money, we could be a lot happier even with less. The coming crisis doesn't have to mean misery; we have a choice.

"The Coming Generational Storm" is highly recommended for anyone with an interest in economics, public policy, or in making sure our country has a livable future.

You know its time for Social Security Reform when you start yelling at your mother. I proposed means testing and raising the retirement age, she said, "That's not fair!"...and which point I found my self yelling, "I pay into Social Security and I'm not going to get any of it, thats not --explitive deleted-- fair!"

I have long felt that I could live without recieving Social Security -- it was just going to be a fact of life. But then Congress went and passed the Medicare prescription drug benefits and I am now filled with rage.

The book has lots of formulas and explanations that boil down to "young people today pay for old people today, there aren't going to be enough young people to pay for the old people of tomorrow." It then delves into excrutiating detail to what extent the government has tried to cover this up.

What is really useful about this book is that at the end they give you practical advice about how to protect yourself. To my fellow 20 and 30 somethings...good luck. I'd say start voting, but it doesn't seem like anyone is willing to address this issue. I wrote all my senators and congressmen begging them to reform the Med. prescription bill...and all I got back was self congradulatory letters for passing the bill as it is! Grumble.

I was student in Professor Kotlikoff's class at Boston University. As far as the humor in his books goes, he interjects anecdotes to illustrate the real-world effects of his empirical findings. Very few economists write books in the hopes that people will find them funny; accessible is good enough. Even in the textbook he co-authored with Prof. Alan J. Auerbach, Macroeconomics - An Integrated Approach - unquestionably a "scholarly" work - there are occasional small cartoons which are inserted very tastefully and appropriately which do a great job of showing how disconnected public perception is from the underlying, immutable facts. Being that he has testified before Congress urging them to adopt a system of inter-generational accounting for their spending plans and to stop stealing from us by taxing, borrowing and printing more money, you can forgive him if he takes a swipe or two at politicians who have done/are doing nothing about very real fiscal challenges this country is facing. He is not a right-wing lunatic or blind entitlement basher, having lectured that private accounts need to be protected from Wall Street fees and fields no fundamental opposition to progressive tax structure. The model that he helped develop takes into account the labor pool, capital investment, technology/productivity and every other objective input of economic growth - all of which matter ALOT more than public perception (he's not trying to get elected). If nothing else, this book is far more substantive than the pop-economics/finance which comes down the pike at 20 titles a month. If you disagree with his findings, do the math, work the models and see if you can find a flaw or if you could advance the science or the argument more than he has (you can look into his research at econ.bu.edu/kotlikoff/). I don't agree with all of his policy recommendations, but dismissing this book because you don't like the writing style or because you think he's advancing a political motive (he's done the math, believe me because he made me do it too) is throwing the baby out with the bathwater.