Friday, February 18, 2011
Baby boomers pay price for their seduction
A Whitehall document has raised the spectre of lowering the means testing threshold for care home charges, implying that as baby boomers age, many will be forced to sell their home to fund the dotage years of their life. Itâ€™s scandal, cry the media, who funnily enough are read most religiously by the baby boomers themselves. But if you look at this problem from an economic perspective, it seems that the baby boomers are paying the price for an all-too-easy seduction which began many years ago in the summer of love,1967. The seducer had two heads: Inflation and exceptional economic growth. The seduction was given irresistible allure by the emergence of a new metaphor: the housing ladder, and higher interest rates and inflation will be the price that we will all pay.