FOUNDATIONAL PAPER February 2026

The Boomer Asset Mirage: A Cohort Asset Circularity Trap

Why the "Great Wealth Transfer" May Be Dramatically Smaller Than Advertised — and What It Means for the American Economy

ABSTRACT

Prevailing analyses of the generational wealth transfer from Baby Boomers to younger cohorts project a nominal transfer of $70 to $100 trillion over the next two decades. This paper argues that these estimates are structurally overstated because they fail to account for the role the boomer cohort plays in sustaining the value of the assets it holds.

We introduce the Boomer Asset Mirage framework and the concept of the Cohort Asset Circularity Trap: a condition in which asset values are partly a function of the continued existence and consumption behavior of the cohort holding them, such that the cohort's exit simultaneously reduces the demand that sustained asset values while increasing supply. The trap operates through two interacting channels — real estate and equity — set against a macro backdrop in which boomers drive an estimated 40 percent of U.S. consumer spending, equivalent to approximately 28 percent of GDP.

The paper marshals existing research from the Federal Reserve, Freddie Mac, NYU economist Edward Wolff, Wellington Asset Management, the GAO, and others, and calls for integrated empirical modeling of the cohort-demand-asset-value relationship that has thus far been addressed only in fragments.

VIEW ON SSRN

KEY ARGUMENTS

• Boomers own 37% of all U.S. homes and an estimated 68–70% of the nation's vacation home stock — 20 to 30 million properties projected to enter markets with structurally insufficient millennial demand.

• Boomers hold 54% of U.S. corporate equity, disproportionately concentrated in industries whose earnings depend on boomer consumer spending — creating a drawdown-deflation dynamic as the cohort declines and liquidates simultaneously.

• Boomer consumer spending represents approximately 28% of GDP; their demographic exit carries aggregate demand implications that extend well beyond the specific assets they hold.

• No existing body of research has synthesized these dynamics into a unified framework — the disciplines addressing them have done so only in fragments.

COMPANION PAPER February 2026

The Fiscal Fracture: Property Tax Erosion and the Municipal Consequences of the Boomer Asset Mirage

A companion paper to "The Boomer Asset Mirage: A Cohort Asset Circularity Trap"

ABSTRACT

This paper introduces the Fiscal Channel — a third mechanism of the Cohort Asset Circularity Trap — through which demographically-driven residential property value declines erode the property tax base that funds local government services and public education in communities where Baby Boomer homeownership is concentrated and working-age in-migration is insufficient.

Property taxes constitute between 70 and 75 percent of all local government tax revenue, including school district collections, and fund approximately 35 percent of national K–12 public education spending. In 2024, state and local governments collected a record $797 billion in property tax revenue. This revenue base is structurally vulnerable to a sustained, geographically concentrated decline in residential assessed values of the kind the Boomer Asset Mirage framework projects.

We document a self-reinforcing dynamic — the Fiscal Circularity Loop — in which declining property values reduce municipal and school district revenues, degraded services reduce community attractiveness to working-age households, reduced in-migration suppresses housing demand, and further demand suppression drives additional value declines. Regional exposure is most acute in northern New England. Vermont's K–12 enrollment has fallen 26 percent since 2003–2004, offering a documented early indicator of the dynamic in motion.

VIEW ON SSRN

KEY ARGUMENTS

• The Fiscal Channel introduces a third mechanism of the Circularity Trap, connecting residential property value declines to the fiscal architecture of local government and public schools.

• Northern New England — Maine, Vermont, and New Hampshire — holds the three highest median ages in the U.S. and the most property-tax-dependent fiscal architectures, making it the acute case.

• Vermont's 26% K–12 enrollment decline since 2003 is a documented early indicator of the Fiscal Circularity Loop in motion, years before the full weight of boomer demographic exit has arrived.

• Existing state equalization formulas are calibrated to chronic structural wealth gaps, not to dynamic, cohort-driven base erosion — leaving many affected districts without a policy remedy.

• The paper identifies four policy responses — regional tax base sharing, circuit breaker reforms, equalization restructuring, and strategic revitalization investment — and calls for research before the transition peak.