Something has to give way. In financial terms alone, Laurence Kotlikoff, a Boston University economist has estimated the unfunded liabilities of Americans associated with healthcare and retirement amount to $80 trillion, over seven times our annual GDP!

It is fairytale fiction of course to think that in the face of a “worker” shortage which appears unsolvable, that any amount of government promises to pay will provide the answer. That is why social security “fixes” that involve accounting changes, or deposits of government “bonds” which in turn pay for future “bonds” are near laughable. A lack of workers can be solved only by producing more of them and that will almost assuredly be done only by extending Americans' retirement age into their late 60s and a scaling back of their benefits. More workers to help the boomers? The Lord, Mrs. Kane, helps those that help themselves, and there will be a lot more of that in the next decade. Either by deferring social security benefits or simply “incentivizing” sixty-somethings to stay on the job because their retirement nest eggs have come up short of expectations – we will begin to solve this new conundrum the old-fashioned way – we will have to work for it.

Too late to have babies, too politically sensitive to import more workers, too daft to recognize that the boomer winter is rapidly approaching and that our assets will not fund our liabilities. Too, too. Too, too. Too, too. What does a government do that is too absorbed in the moment and fails to alert its citizens to the perils ahead? Cut in line, I suppose. It devalues its currency, it reflates/inflates its economy, and because that doesn’t create real wealth, it recites the mythology of a bygone era, of a “shining city on a hill,” so that its citizens believe they’ve never had it so good.

Well, as I acknowledged at the start of this Outlook, some of us never have had it so good, but the demographic season is changing and a rebalancing, more equitable distribution of our rather meager stockpile of nuts lies ahead. Corporate profits, nearing a record percentage of GDP will ultimately be taxed at higher levels in order to assuage a populist ballot-box revolt. And U.S. stocks, the present value of which represents the future value of private sector wealth creation, will stutter, perhaps stagger, as investors understand that much future wealth has been spoken for, if not already digested, by a boomer generation acting as consumers of first and last resort.