Bill Gross, he of “UK is sitting on bed of nitro-glycerine” fame, has become a fan of US debt. Mr Gross, the guru of bond investing, reckons the US is the place to put one’s money. The point is, Mr Gross is worried about Uncle Sam’s debt, but can’t think of anywhere better to put his money.

He told CNNMoney: “If we had to invest our $1.1 trillion somewhere and we didn’t like the U.S., where could we go? Canada and Australia are in decent shape. Germany has been okay but is starting to get infected by Europe’s troubles. Overall, the U.S. is still the clearest pond in the forest.”

So what’s next for the economy? He said: “Our investment committee has sketched out four possible scenarios. Scenario A is that the global economy rebounds back to past levels of high growth. B is just a decent rebound. C is that new normal – half-sized growth. And D is deflation, debt, destruction. I’d say we’re at a C – right now. We believe in the new normal, but what we’re seeing in Europe puts the minus on that C grade.”

And what does that mean for investors? “Instead of 10 per cent returns for stocks, look for five or so. And instead of the past 20 years’ returns on bonds, which are actually better than stocks – close to double digits – it’s 4 per cent going forward.”

Okay, that’s all very dandy, but what does it mean?

Well, if equities will see a return of 5 per cent, bonds even less, all those baby boomers worrying about their retirement are in a right royal mess.

Roger Bootle calls it “Money for Nothing”. The idea that you can become rich just by seeing your assets go up with the market. So property owners and equity investors make money just because property and equities are moving north. Those days are gone.

Think about it from a home-ownership point of view. Supposing you earn an average of £30,000 a year over your working life (at current prices), and you pay, say, a third of that in tax and NICs, and you work for 40 years. This means you earn £800,000. Now, assume you need a pension worth £500,000 just to fund a very basic retirement, and live in a house worth £300,000, which you have paid for in full when you retire. With zero house price growth and zero pension growth, and zero interest rates, this means every penny you earned would have paid for your pension and your home. Or to put it another way, you will have starved to death.

Money for nothing has funded the economy for the last half a century. If Gross is right about future returns for investors, then how on earth will baby boomers afford their retirement? And how on earth will non home-owners be able to afford to buy?

Cheaper houses and a longer working life are the only possible solutions. Either that, or somehow we need faster growth.

And that’s why technology and innovation are so important. See: The two words economists forget