by Lauren Russell

Created on: April 04, 2007   Last Updated: April 30, 2007

It is said that the hopes for each parent is that their children can have a better life than their own. It is expected that the generation following the baby boom generation will be the first to suffer a lower standard of living than their parents. But why is that the case?

For one thing, credit did not exist when the baby boomers were growing up. Todays young adults are not only very familiar with credit but are in over $5000 on average. In fact, Americans are incurring debt at such a high rate, that last year the savings rate for Americans averaged negative 1%. That means negative savings. More debt was incurred than money saved.

The baby boomers are the first generation to experiment with credit debt, but their children and grandchildren are growing up with credit. Generations before this one grew up knowing they had to save money before buying anything, including a car, television, or a home. Today, very few people pay for these items without the help of a loan.

Credit has allowed everyone to have instant gratification. Whatever you want can be yours, now. Of course, it will cost you twice as much with the interest charges, but you can have it now. And that is what the we are doing. There is no thought to the future.

Not only are bankruptcies for individuals on the rise, but companies are declaring bankruptcy as well. The government is in debt to the point that social security, Medicare and Medicaid are expected to be bankrupt in ten years. For those expecting these benefits (because they are also in debt), the result could be very serious.

Obviously the government won't let an entire generation starve and go without medical assistance. They also won't allow their own deficit to become an issue with other countries. But how will the government pay for all of these expenses. They will raise taxes. A lot. It may happen gradually, but as the baby-boomers start retiring, there will be no other choice.

In future generations, we can expect more people with no savings and therefore limited options in retirement. We can expect raised taxes. We can expect the debt of the individuals, companies and government to continue to grow. It is yet to be seen how this will truly impact our society and future generations.

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