I agree with the original post that house prices are still too high, and will probably remain so. What I don’t really see is a direct correlation between this and baby-boomers. There are baby-boomers everywhere yet not everywhere had a bubble, at least in housing. The baby-boomer issue is about how to fund the huge health costs that are adding to the budget deficit at an alarming rate. Liquidating assets to fund retirement isn’t necessarily the way to go. Assets or net worth on their own are not of value. It’s the return on those investments that is important. I agree that it will probably be a combination of later retirement, and higher taxes rather than one or the other, that will ease the situation.
A radical solution might be to have government sponsored retirement schemes with central American countries. Retirees go there for lower tax, and cheaper health care, and manual workers flow the other way. This might stem illegal immigration and escalating health care costs, and bring badly needed dollars into those countries. This is happening already to an extent, as in Belize and Costa Rica, but you want to ensure that if exporting the US model for health care, the same costs don’t follow it. I accept criminal problems in some countries makes the idea unpalatable.
