One of the big issues that has been driving policy discussions is the impact of America’s aging population. As the Baby Boomers age into retirement, this puts some strain on the Social Security system (since there will fewer young people paying into the fund and more people drawing money out) and increased health care costs.
But Kevin Drum points out some good news. A new Census Bureau report shows that this problem is only temporary, just for the next couple of decades. By about 2030, that the population distribution stabilizes (Figure 1) and the percentage of people over 65 drops to around 21% by 2050 which is lower than most developed countries.
So a few minor fixes to Social Security system (like eliminating the cap on the incomes that are taxed for this purpose) would solve that problem entirely. So all this talk of a Social Security funding ‘crisis’ that requires drastic cuts in benefits or, even worse, privatization of the system is just nonsense.
Another good piece of news in the report is that life expectancy gaps between white, black and Hispanic groups are narrowing (Table 1).
This isn’t surprising at all. In developed nations the population stops growing i.e. Europe and Japan, and becomes a steady state.
Which is good.
If your economic model depends on an always increasing population, that model is wrong.
My own personal aging problem is also just short-term, but I find less comfort in that…
Well, when we have population boom we should plan our economics around it. When we have steady population we should plan our economics around it.
I feel like the people talking about crisis are just like “WE MIGHT HAVE TO ADJUST SOME RATES EVENTUALLY!!!! GOVERNANCE!!! AHHHHHH!!!”
Pierce, I actually find more comfort in the idea every year. I’ve still got a ways to go, though.
a few minor fixes to Social Security system (like eliminating the cap on the incomes that are taxed for this purpose)
Reducing military spending would work, too.
Wait a minute! If America’s percentage of over 65’s goes down, that implies Baby Boomers are going to die eventually. Unpossible! We are the epitome of the natural world! 4.5 billion years of evolution to produce us -- and then just allow our specialness to wither away? Never!