Here is an interesting video in which Bloomberg’s Mia Saini looks at the effect of an aging population on a country’s economy.
Link if video does not play: Old Problem, New Reality
As a consequence of the youth gap and a record low birthrate in the US, “the alternative would be to keep on increasing taxes or reduce benefits for the elderly”.
The US birthrate per thousand was 122.7 in 1957, it was 63.2 in 2011.
Difficult Trade-Offs
In regards to the problem facing aging countries, Singapore prime minister stated “None of them have come to any very satisfactory solution because the trade-offs are difficult ones.“
US demographics are better than Europe and Asia, but with US Medicare and Social Security promises related to costs far greater than elsewhere, the US is in no better shape.
There is no alternative to massively increasing taxes unless Congress comes up with genuine health care reform to rein in cost of medicine. Even then, age limits will need to rise and some rationing of services near the end of people’s lives will be necessary.
Demographics are such that few politicians are willing to tell US citizens we cannot afford the promises we have made, so the pretending continues.
Mike “Mish” Shedlock
“Wine Country” Economic Conference Hosted By Mish
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