A demographic stampede is about to pulverize American society. Eighty million retirees—the baby boom generation—are rapidly heading into their retirement years. And according to a survey released on Tuesday, Americans have less money than ever.

“People just don’t want to think about this.” Instead, everyone prefers to stick their head in the sand until it is too late to do anything, says Jack VanDerhei, research director for the Employee Benefit Research Institute (ebri).

According to VanDerhei, the percentage of American workers with virtually no retirement savings grew for the third straight year. Of the over 1,000 workers and retirees surveyed who were over the age of 25, a whopping 27 percent said they had less than $1,000 in savings. That’s up by over 7 percent from last year.

The percentage of workers who said they have less than $10,000 in savings (the equivalent of 3 months’ worth of average yearly salary) jumped to 43 percent, up 4 percent from 2009.

The great American recession is already taking its toll, despite still being in its early stages.

On average, U.S. consumers are going $300 in the hole per month after all expenses are met, says John Lekas, senior portfolio manager for Leader Short-Term Bond Fund. And Lekas says conditions are only going to get worse, as real unemployment (as measured by the government U6 number) heads toward 25 percent over the next couple of years.

For many families, conditions would already have been much worse had governments not borrowed billions to pay out extended unemployment benefits, food stamps and other welfare.

It is no wonder that the ebri report found that only 16 percent of respondents were confident in their ability to save enough for retirement. The finding was the second lowest in 20 years and is especially ominous because many of these workers are probably expecting to rely heavily upon Social Security and Medicare benefits—two massive and currently unfunded government liabilities. Social Security is already bankrupt (the government is borrowing money to make payments) and Medicare is projected to have a $38 trillion deficit over the course of the baby boom generation.

The nation’s retirement safety net is looking more precarious than ever. But with national health care, the wars in Afghanistan and Iraq, Iran seeking nuclear weapons, pirates preying on American shipping, and jobs being offshored to Asia, don’t expect much political action.

It is far easier for politicians to bury their heads in the sand.

Even among those who recognize the debt problem facing America, the desperation is akin to chickens running around with their heads cut off.

Public pension plans are facing a massive crisis too, the New York Times reports. All across the country, state and local pension plans are chronically underfunded. Governments have promised big, but put aside little.

Instead of admitting they had been lying to their workers (basing predictions on ridiculously high estimates of future investment returns), and telling voters that they need to start paying higher taxes to fund civil servant retirement plans, states and other government bodies are trying to get back into the money by heading to the casino.

The Times reveals that most government pension plans have based their pension plan funding on the assumption that stocks will return an astounding 9.5 percent yearly growth on average, and that bonds will pay about 5.75 percent. Both suppositions have been shown to be ridiculously high. Even considering the current stock market rally, the Dow Jones Industrial Average is still below levels seen 10 years ago. The Nasdaq is much further underwater. As for government bonds, even the longest dated ones pay only 4.68 percent. A one-year bond pays only 0.37 percent.

“In effect, they’re going to Las Vegas,” says Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board. “Double up to catch up.”

Commodity futures, junk bonds, foreign stocks, mortgage-backed securities, leveraged investing, credit default swaps, exotic derivatives—are now all on the table for many desperate pension funds. But as any casino patron knows, for every winner, there are many losers. Vegas only exists because it is successful at separating gamblers from their money.

It is time Americans pull their heads out of the sand. The current relatively light economic crisis is only the beginning. A stampede is headed this direction, and when the money is gone, many are going to get trampled.