Is ‘Total Boomer Luxury Communism’ Destroying America?

Young and old have they blamed each other about America’s problems for generations. The older generations believe that the younger ones are lazy, immoral, ignorant and destined to destroy the country. Meanwhile, younger people believe that older generations had it easy and are out of touch with today’s challenges. A new slogan coined by my colleague Russ Greene that captures this sentiment among Millennials and Gen Z is “Boomer luxury communismThe idea behind this is that older people, mostly affluent Baby Boomers, are hoarding opportunities and resources while young people struggle to buy a home and support the generous Social Security and Medicare benefits that wealthier Boomers expect. Baby Boomers may not like this, but younger generations have a point.

Baby Boomersthose born between 1946 and 1964 are not responsible for all of the world’s ills, but they are at the center of some major problems in the United States. Housing is a good example. America has a huge housing shortage, as do many from 15 to 20 million units according to an estimate. That shortage is pushing prices up across the country, leaving many younger homebuyers on the sidelines. A recent study found it 22% of Millennials they are so discouraged by high prices that they have given up on buying a home. Almost one in five adults ages 25 to 34 live with their parents, partly because of high housing costs.

The construction slowdown that caused this shortage has begun in the late 1970s. Housing starts fell from over 50,000 per million people in the 1970s to just over 40,000 per million over the next three decades. In the 2010s, starts plummeted to just over 21,000 per million people.

A large cause of this decline was stricter zoning and land use regulations. Cities across the country implemented regulations such as minimum lot sizes, density restrictions and minimum parking spots that made it more expensive to build homes. Coastal cities in California and the Northeast acted first, but inland in recent years cities across the South, including Atlanta, Phoenix, and Miami, have begun to follow suit, and their housing prices are rising accordingly. In 1980, the median ratio of house price to income in Phoenix The area was three, meaning housing was affordable for most families. Today, it’s more than six, which isn’t much lower than the ratio in the New York metropolitan area.

Cities also slowed down the permitting process by using discretionary review rather than right-to-develop. Discretionary review gives government officials the power to add conditions or deny projects through a public review process. Eligible development means that as long as a project complies with pre-determined local rules, it can be built without additional approval. Research shows that entitlement projects are permitted faster than discretionary review projects, which means lower construction costs and ultimately lower prices for consumers.

So how do the Boomers fit in? First, it is an influential voting block. The 65 and over age group has the highest voter turnout ratethat is, political candidates often listen to what they say. Higher-income residents age 55 and older are also more likely to communicate their local officials from the younger ones. And what these older, wealthier homeowners tend to say is that they don’t like new development. A study that analyzed planning and zoning board meetings in the Boston area found that 63% of the comments submitted were opposed to new housing development, while only 15% were in favor. It also found that the average age of a commenter was 58, while the age of the average voter was 50. This is proof that older people are the loudest voices in discussions about new housing projects.

The Trump administration’s recently proposed 50-year mortgage is another sign that Boomers (Trump is one) are more interested in hiding the housing problem than solving it. The main reason housing is so expensive is because there isn’t enough of it. 50 year mortgage will lower monthly payments, but does not make housing cheaper or easier to build. It simply spreads the high cost of housing over more years. A 50-year mortgage can even increase prices by stimulating demand while supply remains constrained by burdensome regulations.

Put it all together and it looks like older generations are contributing to the housing problem that is preventing younger people from buying homes and starting families.

Supply-boosting housing reforms aren’t the only policies Boomers oppose. The social security trust fund is intended to I’m getting exhausted in 2032, which will cause benefits to fall by 24% across all sectors. Everyone who studies Social Security knows it is not sustainable and has known this for decades. However, whenever someone proposes reforms, the AARP—Many Boomers are members—and similar groups are quickly catching on. As a result, Social Security has become the third rail of politics.

Depleting the trust fund can eventually force changes, and there are two general ways to fix Social Security—either cut benefits or raise revenue. Options for reducing benefits include changing the way benefits are adjusted for inflation and raising the retirement age. Potential revenue-raising factors include an increase in the payroll tax rate and an increase in the amount of income subject to current tax.

A recent survey by the Cato Institute reveals a generation gap between tax increases and benefit cuts. Gen Z wants to cut benefits rather than raise taxes, while Baby Boomers would prefer to raise taxes (see image below). This is not surprising, as any tax increase would fall on younger workers who pay for the benefits of older pensioners. Essentially, Baby Boomers prefer to tax Gen Z and Millennial workers to make sure they get their benefits.

Baby Boomers likely believe this result would be fair because they earned these benefits through Social Security contributions. But while they paid into the system, they didn’t pay enough. The average retiree takes more in benefits than they paid, a difference that will worsen over time. Medicare suffers from the same problem. This is why America’s entitlement programs are broken: People want more in benefits than they pay in taxes and are happy to let future generations figure out how to close the gap.

Another way to strengthen Social Security is to increase the number of workers. More workers means more Social Security revenue and more economic growth. When Social Security started there were four workers for each beneficiary. Today there are 2.7, and that number is projected to decrease. Baby Boomers bear some of the blame for this. Between 1973 and 1988, when many Baby Boomers were in their prime of reproductive age, the US fertility rate it was under two. Fewer children then means fewer workers today to support the generous Social Security benefits of retirees.

It is too late for the Boomers to have more children, but more immigration would also provide more workers. Unfortunately, Boomers are once again on the wrong side of the issue. In one Pew Research poll from last December, only 19% of people 65 and older said they wanted to increase legal immigration, while 50% of 18- to 29-year-olds supported an increase.

Wealthier Baby Boomers don’t want to make life harder for their children and grandchildren, but many of their political preferences do just that. They are staunch opponents of building new homes that would expand supply and improve affordability. They refuse to compromise on Social Security reforms that would better align spending with revenue. This may not be “Communism Total Boomer Luxury,” but it doesn’t feel right.