One probable cause is people 62+ who are taking out SS benefits at about 75% the rate they would get if they waited until 65-67. They have given up looking for work and are officially "retired" since taking early SS benefits limits one's income to $17,000 a year even if they could find a job.

Anecdotal, but I see a many middle manager types over 50 in grocery stores as check-out clerks (part-time). This makes sense as to why the 55-64 year old unemployment rate went down. Early (forced) retirement with no health benefits and working for health benefits in jobs that pay 1/10th of what they used to earn.

I would love to see a survey on how many people are working part time to pay for private Health Insurance.

In Indiana, there is actually a law on the book that states (paraphrased) "no insurance company is obliged to pay out more than what has been paid in for single private insurance." WTF? Why call it insurance then? The only state protection comes within large group insurance. People in their 60s and late 50s are seeing $2000 + premiums with $5000 in deductibles.

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The labor force participation rate is the ratio between the labor force and the overall size of their cohort (national population of the same age range).

The discouraged, those neither employed nor seeking unemployment are not in the labor force.

Those that are retired are not in the labor force. I guess its those receiving SS or disability payments.

Formal retirements have not gone up. What about the informal retired, those that are discouraged yet are too young for social security?

I can only presume that the big increase is in the informal retirements. I guess they have moved to the underground economy.

Karl's thesis holds up - there aren't enough people working to result in the stream of tax payments to support our current government and FSA.

As I have said before I am about 2 years short of being classified a Boomer. When I retired in 2010, they replaced me with a Tech person who was looking to get out of another company that was going belly up and another person (engineer) who was laid off from another company. The point being that two new people didn't enter the work place.

You will find that many boomers will work as long as they can because 75% of those 65 and older have only $100,000 or less saved.

None of the money I saved is in equities and any boomer retiring will do the same if they learned anything from the Tech bubble of 2000 and the melt down in 2008.

What has happened can't be blamed on the boomers retiring because many can't because they lived beyond their means for too long.

I don't know about other states but in Wisconsin there were a lot of public employees who retired early because they were afraid their excessive benefits would go away.

I talk to debt-mongers all the time, off line, they don't like to chat in public. They tell me they don't care about the government debt. Their morality is that taking out a loan with no plan to repay it is not a criminal act at the federal level. They have rationalized that criminal, fraudulent borrowing is ok, as long as they can find someone else to blame for not paying it back.

They don't even have to feel badly about taking anyone's money any more, because all their help programs really don't cost anyone they care are about any money. It only costs people they don't care about with debt: the 3 million rich in the 1%, and the 20 million younger voters who will have a lifetime of payments in front of them, currently around $300,000 per child.

Here's the end game on the debt:

Think of the end game: Convinced they are blameless, in the end game it will pit the US debt payments as a youth pays, vs the 1% pays, good vs evil, confrontation. Hmm, who wins that popular vote? Then they start draining the wicked 1%…2%…5% bank accounts, not by raising taxes. Raising taxes will tank the GDP, Obama and the liberal policy advocates know this. But if you nationalize the 401ks, which only exist because of the brilliance of government, right? Right? Since Gub’mint policy created 401ks, then it’s only right that they are used to pay off the debt. Recently a Massachussets politician told us how it works: If gov’t policy helped people make money, all the money is morally the right of the govt to take back. No foul no harm. Got it?

Atlasrocked wrote..

Think of the end game: Convinced they are blameless, in the end game it will pit the US debt payments as a youth pays, vs the 1% pays, good vs evil, confrontation. Hmm, who wins that popular vote? Then they start draining the wicked 1%…2%…5% bank accounts, not by raising taxes. Raising taxes will tank the GDP, Obama and the liberal policy advocates know this. But if you nationalize the 401ks, which only exist because of the brilliance of government, right? Right? Since Gub’mint policy created 401ks, then it’s only right that they are used to pay off the debt. Recently a Massachussets politician told us how it works: If gov’t policy helped people make money, all the money is morally the right of the govt to take back. No foul no harm. Got it?

In the present political and legal climate accumulating wealth is for suckers. One way or another anything you manage to save will be stolen either by taxation, or by the financial sector, or by inflation. So it's entirely rational for individuals to accumulate debt instead; there's no point in deferring consumption if your savings are just going to be confiscated without recourse.

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will be stolen either by taxation, or by the financial sector, by the medical sector or by inflation

the bolded part is my addition

A number of posters on this thread, some have been on TF for much longer than I, need to reconsider how they address the problem. I just had this conversation last night with 2 of my 3 reps. We cannot cut deficit spending. We have to eliminate deficit spending and cut spending from that point or we are screwed. The distinction is most important. Anything else amounts to business as usual.

Yep. You have to run an actual surplus.

Boomers retiring?

They dont have any money saved, so how could they retire?

I mean you could find countless articles lamenting this fact

Rithholz is just shilling his book, he's long the market.

Also worth considering:

SS isn't subjected to income tax, but if you get a job or have another income stream you must pay income tax on your income and your SS.

Tough to make the business case to retire in your 60s and get a part time job.

It's made worse by having forced distribution from your 401k if you used pretax dollars. You get it in both holes by law.

The Game of borrow and spend other peoples money has gone on for so long now that the politicians just dont care. its not there money so why should they as long as they will get paid.
All of the games being paid allow them to keep borrowing, Interest rates at all time lows is so so good.
Then you have these clowns with fancy degrees on the media saying debt does not matter, its not really printing, We are the world currency so we cant default we can just print etc etc.
Just like house prices cant go down you read it and most believe it.
I had no income what so ever for ten months, no savings of worth and only very limited income for another six months and managed to stave of bankruptcy by "juggling things" for fourteen months. If I can do it for that long how long can a government of a wealthy country do it?
Look at Greece they are out with the begging bowl but, people are still lending them money yet the politicians are still trying to make deals/promises that cannot be financially made.
The whole lot should have come crashing down by now. I truly question the value of money when you can debase it so much and still have worth in it.

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We cannot cut deficit spending. We have to eliminate deficit spending and cut spending from that point or we are screwed. The distinction is most important. Anything else amounts to business as usual.

Yup, otherwise interest expense will screw you. So instead of being screwed twice (new issue + interest) you get screwed once (interest).

And also, they are NOT retiring, in fact, the job rate for 55+ is like at a 30 years + high.

I suppose the "mathematically impossible" is the way it has to go.
Certainly TPTB is not betting on mathematical impossibles to stay in power.

The remaining option is that some or most people will have to be losers.

Three ways for that: A distraction so huge that people forget their old problems and make simple survival their priority, such as civil war, or a temporary distraction huge enough to make people willing to postpone satisfaction, such as a world war. Third way, we are all suckers except certain privileged few.

Note that Corzine's MF Global "event" elicited this comment from President Obama, to paraphrase: what Corzine did was "not against the law" (so big deal, you trader-speculators are big boys now...stop whining). So what if it was a crime? If most of the voting population does not react to this travesty protesting in outrage, why not do some more of this "still legal" ripoff, since the perpetrators can still get away with it? Just take the money from purportedly safe "segregated" accounts. Get people to buy a lot of precious metals (ads on TV and talk shows) because it is still "safe" to hoard these, then later simply say somebody high up changed their mind for reasons of national security, or even because the prez just decided so, and seize it all at gunpoint once the suckers have gathered it up so conveniently. If they won't give it up, just take their house. Barter the loot for forgiveness by the foreign borrowers. What about American citizens who still held Treasury debt? Tough noogies, what can they do about it? Go pound sand? At least that might after all is said and done or not done remain somewhat fungible as the currency of last resort....U.S. Dollar, or equivalent in World Credit Units.

Abn0rmal wrote..

In the present political and legal climate accumulating wealth is for suckers. One way or another anything you manage to save will be stolen either by taxation, or by the financial sector, or by inflation. So it's entirely rational for individuals to accumulate debt instead; there's no point in deferring consumption if your savings are just going to be confiscated without recourse.

Gee, that sounds almost inflationary.

so the interest being charged on the national debt is at 6%?

how could anyone calculate how much interest is being charged?

i've been curious about these two for awhile,but thought there was no way the rate could be figured unless it was calculated after the fact(at the end of a fiscal year)

Gen needs another Unicorn delivered to him that he can keep in his back yard!!!