WHAT EVER HAPPENED TO OUR ECONOMY?

When it comes time to assign blame for what our Country is going through, We all have plenty of candidates, the "Sub Prime" loans, corruption, Obama, the housing bubble, the Mortgage bankers, Wall street, etc... But, have you stopped to think, what is the true underlying cause of this "Recession" soon to be "Depression"? Have you noticed that if everybody blames it on something different, it might be because there are many different things that happened? and maybe they are all right.

I will give you my humble opinion: It is the Baby Boomer DEMOGRAPHICS!!!

The good old "Baby Boomer" generation, has always impacted our modern economy, from its inception back in 1945 until NOW!
As Baby-boomers came into this world, our (I am one of them) massive numbers (78 Million babies), became the largest generation ever to walk on the face of the earth, our presence demanded a special treatment through every phase of our growth, so we have seen everything on the path of this huge group adapt to serve it, hail the Baby Boomers!, the disposable diapers made their appearance in the early years, you then saw the biggest "generational gap" when as teenagers we rebelled against older standards and started the Rock and Roll era, in the 50's, then we created drugs and peace movements to complement our idealistic and rebellious college years; the economy felt our impact and suffered the worst inflation ever in the 70's, when we incorporated into the work place and having disposable income; we then boosted the stock market through the biggest bull markets ever seen when we started investing in our 401k's in the 80's; We then created the world's largest credit bubble when we turned to our 40's and bought into the biggest and nicest homes money could buy, twice the size of the previous generation's homes (the McMansions) in the 90's. And finally, as we entered our 50's when we are expected to start settling and preparing for retirement, we stopped spending.
This sudden drop in the money flow that our economy, and the world had grown so used to, made a huge impact in the value of everything, starting with houses, which immediately stopped appreciating....the bubble had burst, values started dropping fast, and on their downward path they exposed the high risk formulas that had been used to provide the massive amounts of easy credit that was used to fuel the massive housing boom...these bad news profoundly affected the stock market, this in turn jeopardized the bank's ability to grant financing to the industry, this in turn was a nasty blow to all the economic activity and pretty soon, this crisis touched everything and aligned all the different industries to the beat of a single and deathly pessimistic tune, a vicious cycle that could only be interrupted by a massive influx of money. 

By the time the Government was able to act, it was too late, we wasted precious time waiting for Bush to step down, for Obama to be in, we now have a tremendous problem fueling on lack of jobs, lack of spending, an over leveraged economy, assets that have lost 50% of their value. What would pull us out of this crisis would be again, massive spending, but originating from consumers, the people not the government, we cannot cure the over leveraged economy by borrowing more money, so this time, I am afraid, this cure will not work.
The Government has been trying hard to substitute the required spending with the "bailouts", but sooner than later we will discover that there is not enough money that can be injected, that could turn the tables, specially not "borrowed" money.
And worst of all, pretty soon, the government spending will need to be paid back, interest rates will go up, taxes will go up. Prices of everything will tend to drop, not for good reasons, but because there is no money.... deflation ......depression.
Our problem is over leverage and gigantic debt, you cannot cure this with more debt.
I guess we will have to hold on tight, adjust our economy to what we are going through, because it is going to be like this for many, many years. Each of us will need to focus on being more efficient, on embarking activities that cater to the most basic needs of people, bare necessities, basic housing, basic everything, the rest will see their activity diminish and in some cases extinguish.
They are moving our cheese my friends, we need to focus on looking for cheese where it makes sense, and stop dreaming that our old cheese is going to reappear and things will go back to the way they were a couple years back.