519-646-2222Blame the Banksters not the Boomers.
When you are looking at the root cause of the so-called housing shortage, blame the banksters, not the boomers. Boomers had it rough—really rough—compared to any other generation. There were more people born in a span of about twenty years than ever before or since in recorded history. For every seat in college there were more applicants; for every job there were more applicants. Times were tough.
The GI Generation, the parents of the Boomers, had the very worst of times (the Great Depression) and also enjoyed the most prosperous period in human history. The years between about 1950 and 1965 marked the first time in history when women did not need to work outside the home to support their families. It was the first and last time that one wage could support a family with four children.
These children were the Boomers. The boom began post-war (1946) and carried on until about 1966. After that time, it became increasingly difficult for the growth to sustain itself. But why? During the boom years, corporations paid their fair share of taxes, there was less corporate welfare, and corporations paid an average of 52% in taxes, which fueled government infrastructure projects—schools, roads, housing, etc.
Corporate lobbyists, especially in the financial sector, grew more powerful and influential, pushing the tax burden onto the proletariat. Sick of paying high wages, pensions, healthcare, and insurance benefits through unions and professional organizations, corporations found ways to push back. The rising power of the working and middle class was a threat to the establishment. Manufacturing was shipped offshore to cheaper labour pools to enhance profitability and reduce tax exposure.
Gloria Steinem, and others, were funded by the CIA and large corporations to spread dissent and dissatisfaction with the status quo. They raged “burn the bra” and protested that women were nothing more than “economic slaves,” kept “barefoot and pregnant” by misogynist husbands. They needed to “restore the right to work and earn their own money.” All of which would have constituted a noble cause if it were based on anything more than a political narrative.
Corporations benefited tremendously because women make up 54% of the world’s population and effectively provided a doubling of the available domestic workforce—adding more competition for jobs placed downward pressure on wages, and pressure on union contracts. “Household income” replaced “individual income” as the standard economic measure of family success. Inflation grew beyond income, and corporations saw their taxes decrease to encourage them to keep manufacturing at home.
Boomers worked hard for everything they received and faced ever-growing economic challenges. Boomers were coming of age in the late 1960s and early 1970s amid the petrol crisis, massive strikes, huge government cutbacks, declining healthcare, higher academic costs, less infrastructure, and fewer jobs. The 1960s and 1970s saw tremendous growth in the East—places like Japan, China, and Taiwan became major manufacturing hubs and heralded an exodus of jobs from Western countries.
Ignore the divisive narrative de-jour that makes absolutely no sense at all, Boomers couldn’t afford to have four children. The costs of daycare were too high, two incomes were needed to support the family, and more taxes were required to pay for corporate welfare. Boomers saw the end of the “mortgage burning parties” of their parents. The GI Generation would take out a 25-year mortgage, pay it off in 15 years, then have their friends over for a bonfire, BBQ, and ceremonial burning of the mortgage. What changed?
- The Pill: Oral contraceptives became widely available in the 1960s, giving couples, especially women, control over family planning.
- Women in the Workforce: More women worked, raising the cost of having many children and shifting priorities.
- Economic Changes: Recessions, the decline of union jobs, and high living costs made large families financially harder to support.
- Cultural Shifts: A move from traditional to more individualistic values, with greater emphasis on education and personal fulfillment over large families.
- “Investing” in Fewer Kids: The idea of providing more resources (education, opportunities) for fewer children became economically sensible.
- Social Acceptability: Childlessness or having fewer children became more socially acceptable than in previous generations.
Boomers were the first generation to experience high levels of consumer debt. Credit cards, hot on the heels of the abolition of anti-usury laws, started to proliferate in the marketplace as banksters wrote their own rules and regulated themselves. Multilayered mortgages became a thing, and so did HELOCs, secured lines of credit, secured credit cards. Furniture stores changed from holding items while customers paid for them to providing in-house credit facilities. Debt exploded, becoming the largest (unspoken-about) industry in the world.
Today many Boomers are still working into their seventies just to be able to live. The defined-benefit pensions of their parents are gone. Many Boomers are still paying mortgages—albeit cheaper than paying rent. Boomers are the first retirees in history to face the prospects of bankruptcy. They are exploited by banksters who lend them “survival” money knowing they have no capacity to repay. Government pensions have been squandered by governments possibly using them to bail out banksters. The same is true of other funds, such as CMHC, which was used during the last bank(ster) crisis of 2007–08.
Growing Trend: Data shows a clear increase in older adults with outstanding mortgages. In Canada, only 14% of senior families had mortgage debt in 2016, but recent surveys indicate that nearly 30% of those planning to retire soon expect to carry that debt into retirement.
- Significant Numbers: In the US, over 10 million homeowners aged 65 and older still have a forward mortgage.
Reasons for the Shift:
- Later Homeownership: The average age of first-time homebuyers has risen, pushing mortgage payoff timelines further into the future.
- Increased Debt: Households aged 55 and older have actually increased their average mortgage debt at the fastest pace in recent years.
- Housing as a Retirement Plan: Many boomers view their home equity as the bedrock of their retirement security, using it as a financial asset to tap into later, rather than an obligation to eliminate immediately.
- Financial Pressures: High housing costs, increasing property taxes, and a desire to help their children financially with their own home purchases have all contributed to this trend.
- Impact on Retirement: Carrying a mortgage into retirement, especially on a potentially fixed income, can present financial challenges, as a significant portion of earnings may be allocated to debt repayment.
There really is no housing crisis; there is a debt crisis, and we are all victims. The problem could be easily solved—but there is no political will. Politicians rely on banksters and the very wealthy to get elected and stay in office. The banksters have far more political influence than citizens in any Western country. If the banks were broken up and their lending practices properly regulated, there would be little need for insolvency practitioners.
Imagine if tax loopholes were closed for the rich. Bill Gates avoids paying taxes by “donating” his wealth to a so-called charitable foundation—still his money, still under his control, just placed in a different pocket. Elon Musk can borrow money at preferred rates from the banksters to avoid paying taxes. There is no wealth tax, no income tax if income isn’t drawn, and no tax on bank loans. Offshore havens such as Ireland allow international corporations to minimize taxes paid, and those taxes can even be deferred indefinitely – most of the top tech companies are registered in Ireland to avoid taxes.
The price of housing was driven up by quantitative easing—apparently code for “the banksters are failing again and needed to inject more money into the economy.” Today’s homebuyers are paying lower interest rates on mortgages than their Boomer parents ever did. In 1981, mortgage rates were between 17% and 28%. Gen Xers have spent wildly on credit—like there was no-tomorrow. No vacations to the KOA for them; it has to be exotic—Cuba, Brazil, Mexico, the DR. No savings, just buy now, pay later and blame everyone else. Their impulsiveness heralded the massive credit-card boom that led to banksters issuing 116,000,000 credit cards to Canadians.
The early Boomers (born in the 1940s) are one of the fastest-growing demographics for insolvency filings. Today, at 74 years of age, they are still paying the banksters to keep the houses they raised their kids in—houses that, were it not for the economic exploitation of debt, would have been paid for long ago. When an 84-year-old man walks into my office with a $30,000 unsecured line of credit, obtained from the bank where his $1,600-per-month government pension has been deposited for the past twenty years—and the repayment terms are calculated by the banksters to allow him 420 years of minimum monthly payments—allow me to redirect your attention from fiction to fact.
How do you get ahead today? Recognize the system is broken. Do not be a systematizer. Friedrich Nietzsche’s aphorism: “I mistrust all systematizers and avoid them. The will to a system is a lack of integrity“. Do not use credit. Do not borrow money to get more debt—debt doesn’t cancel debt, and you own nothing if you haven’t paid for it. If you are renewing a mortgage, do not—ever—add new money. If you can’t afford to get by without layering on more debt, change your lifestyle, not your exposure to the banksters. Foolish speculation drove up the already inflated price of housing in Canada; smart speculation will drive it back down.
Take a look around. Today’s houses are cheap and poorly built. External walls are three and a half inches of lumber; roofs last a mere fifteen years—ditto for heating and cooling systems. They are clad with plastic siding that warps and cracks after a few years of exposure to the weather. Thanks to changes in building codes, driven by CMHC in the post-war years, to create more affordable housing, today’s housing has a lifespan of about twenty-five years before significant renovations become necessary.
Banksters have created a debt bubble so big they can’t find a way out without a complete economic collapse. Even the much-heralded CBDC is no panacea—if it were, it would have been implemented worldwide already. Wars have been go-to tool of the banksters for hundreds of years—but even a major global war would not reset this mess.
“But the Boomers have most of the houses.” Of course they do! They have worked all their lives for them, overpaid for their homes, and are still paying. After you reach their age, you’ll be in the same position—but unless you pay attention and demand political change, so will the banksters.