The Declining Birth Rate And What It Means

[RiverDog]

I think I've made myself well known as a huge advocate for a robust immigration policy, that we should be admitting young, law-abiding immigrants, preferably educated, no matter what their race or the country they hail from. It's not just because I sympathize with the plight of immigrants or hold some type of unique sensitivity to race or ethnicity issues, but more because I'm a selfish American.

The birth rate in this country has been on a steady decline since 1960. Coupled with the baby boom, ie the huge increase in births in the 15 years that followed the end of WW2, and increasing life expectancies, the decline in the birth rate has resulted in a huge skewing of age demographics and has, and will continue, to manifested itself in the labor shortage, a horse that we beat to death a few months ago and that we're experiencing in every industry. If something isn't done about this age imbalance, we're going to be confronted with an economic catastrophe as our social welfare programs, ie Social Security and Medicare, are dependent on current workers paying taxes into the system to support retirees and handicapped.

But it's not just a phenomenon limited to the United States. Worldwide, birth rates have declined, and the age demographics are skewed as they are in this country. I read an article in the NYT that said in Japan, there are more adult diapers sold than baby diapers.

Here's some highlights from an article. It is about 3 years old, but still very relevant to the discussion:

Japan's population is projected to fall from a peak of 128 million in 2017 to less than 53 million by the end of the century.

Italy is expected to see an equally dramatic population crash from 61 million to 28 million over the same timeframe.

They are two of 23 countries - which also include Spain, Portugal, Thailand and South Korea - expected to see their population more than halve.

The study projects:

The number of under-fives will fall from 681 million in 2017 to 401 million in 2100.
The number of over 80-year-olds will soar from 141 million in 2017 to 866 million in 2100.

"We will go from the period where it's a choice to open borders, or not, to frank competition for migrants, as there won't be enough," argues Prof Murray.

There is an exception, but it's not good news. Countries in Africa are still experiencing high birth rates, but they are amongst the poorest nations in the world. They are the least able area that could support a population increase.

The population of sub-Saharan Africa is expected to treble (triple) in size to more than three billion people by 2100.

And the study says Nigeria will become the world's second biggest country, with a population of 791 million.

https://www.bbc.com/news/health-53409521

We saw what happened in France when French president Macron tried to raise the retirement age to help address this revenue shortfall. We're going to be faced with some very stark, untasteful choices: Raise the retirement age. Cut benefits. Raise taxes. Repeal child labor laws. The politics of immigration reform are only going to get worse as there are too many ignorant people that are unable to comprehend what this skewing of age demographics is doing to our society.

Thankfully, I won't be around to see the worst of it.

[Aseahawkfan]

Just as developments in food technology staved off Thomas Malthus's theory we would starve, robots and AI will change the entire world in such a way that we will need less people for the same level of human life and comfort. In fact, comfort will likely be improved. This is the dawn of the age of robotics and AI, the changes we see will be profound and change human life forever. It will further put downward pressure on the birth rate as the need for more humans becomes less and less as humans are naturally replaced by robotic and AI driven labor resources.

Species evolve in many ways. Sometimes physical adaptation, sometimes behavioral. Humans with their enormous intellectual capabilities evolve technologically. That is what this new era of robotics and AI will be: technological adaptation to reduce our reliance on human labor and the need for as massive a population of humans. Humans are an inefficient biological organism driven by emotions with a great many needs and wants that cause massive environmental issues which lead to enormous resource consumption that feeds on the earth in a way that often isn't renewable. Robots can be built in a more efficient fashion using a renewable energy system to function and be built to last a great deal longer than humans with less need for resource consumption or services like medical care. Once AI advances that intelligence will operate faster and more efficiently than human intellect and also help us make faster technological jumps.

I'm not particularly worried about the number of people going forward. I think robots and AI will drive our ability to advance and expand not only on the planet, but off the planet.

[RiverDog]

Just as developments in food technology staved off Thomas Malthus's theory we would starve, robots and AI will change the entire world in such a way that we will need less people for the same level of human life and comfort. In fact, comfort will likely be improved. This is the dawn of the rage of robotics and AI, the changes we see will be profound and change human life forever. It will further put downward pressure on the birth rate as the need for more humans becomes less and less as humans are naturally replaced by robotic and AI driven labor resources.

Species evolve in many ways. Sometimes physical adaptation, sometimes behavioral. Humans with their enormous intellectual capabilities evolve technologically. That is what this new era of robotics and AI will be: technological adaptation to reduce our reliance on human labor and the need for as massive a population of humans. Humans are an inefficient biological organism driven by emotions with a great many needs and wants that cause massive environmental issues which lead to enormous resource consumption that feeds on the earth in a way that often isn't renewable. Robots can be built in a more efficient fashion using a renewable energy system to function and be built to last a great deal longer than humans with less need for resource consumption or services like medical care. Once AI advances that intelligence will operate faster and more efficiently than human intellect and also help us make faster technological jumps.

I'm not particularly worried about the number of people going forward. I think robots and AI will drive our ability to advance and expand not only on the planet, but off the planet.

AI could, and likely will, help solve the labor shortage, but what about the revenue needed to support the older population? Robots don't pay taxes. How are you going to pay for all the old people in nursing homes? How are you going to pay for the increased medical costs associated with an older population? How is AI going to help fund Social Security and Medicare?

There's only 5 choices: 1. Cut SS and Medicare benefits. Goes over like a fart in church with the voters and likely would increase the poverty level with older people. 2. Raise the retirement age. We saw how that went over in France. 3. Raise taxes. We're already fighting inflation, and raising taxes is only going to make it worse. 4. Repeal child labor laws. Not likely. 5. Allow more immigration. Under the current political climate?

If something isn't done, if we just keep kicking the can down the road, I can see a worldwide economic calamity, another Great Depression.

Here's some of the things I'd do right now: Increase immigration, actively recruit individuals living outside of the country with an emphasis on those age 18-35. Get rid of early retirement. Do not allow people to draw Social Security benefits between age 62 and 66 as they are now. Prohibit 401K and IRA withdrawals prior to age 67, forcing everyone to work longer. Raise payroll and employer taxes incrementally, .5% per year for 10 years, or 1% total between the two. Increase Medicare's minimum age from 65 to 67 to correspond with Social Security.

Of course, that just addresses the problem in the United States. Other countries, like Japan, Italy, Spain, the UK, Canada, et al will be experiencing the same dilemmas.

[c_hawkbob]

It wasn't that long ago they were saying overpopulation was the major crisis humanity was facing, that in x amount of years we wouldn't be able to feed the worlds population. I still see this as a greater overall threat than the US economy facing an adjustment period. The US economy will be fine.

[Aseahawkfan]

AI could, and likely will, help solve the labor shortage, but what about the revenue needed to support the older population? Robots don't pay taxes. How are you going to pay for all the old people in nursing homes? How are you going to pay for the increased medical costs associated with an older population? How is AI going to help fund Social Security and Medicare?

There's only 5 choices: 1. Cut SS and Medicare benefits. Goes over like a fart in church with the voters and likely would increase the poverty level with older people. 2. Raise the retirement age. We saw how that went over in France. 3. Raise taxes. We're already fighting inflation, and raising taxes is only going to make it worse. 4. Repeal child labor laws. Not likely. 5. Allow more immigration. Under the current political climate?

If something isn't done, if we just keep kicking the can down the road, I can see a worldwide economic calamity, another Great Depression.

Here's some of the things I'd do right now: Increase immigration, actively recruit individuals living outside of the country with an emphasis on those age 18-35. Get rid of early retirement. Do not allow people to draw Social Security benefits between age 62 and 66 as they are now. Prohibit 401K and IRA withdrawals prior to age 67, forcing everyone to work longer. Raise payroll and employer taxes incrementally, .5% per year for 10 years, or 1% total between the two. Increase Medicare's minimum age from 65 to 67 to correspond with Social Security.

Of course, that just addresses the problem in the United States. Other countries, like Japan, Italy, Spain, the UK, Canada, et al will be experiencing the same dilemmas.

Dystopian movies always play better and I'm guilt of similar thoughts when it comes to the future like everyone.

But the reality is humans for all their faults always seem to find a better way to do things in the long run. There may be a period of problems, but systems will get updated and governments and human groups will adapt, there will likely be give and take by all income groups, and society will adapt, just as it did from the beginning of America and the world. Always adapting, learning, and finding new ways to live so human life can go on as comfortably as possible.

Given the history books tell us we started as random wandering tribes competing for food against animals, I think as far as we've come we will figure out how to best manage resources. It will likely be some combination of socialism (community) and capitalism (the human need to be rewarded for their work) that we have always used for time immemorial before we called it socialism and capitalism. It's humans who like things to be one way and get to attached to names rather than the underlying idea those names represent. Economics is a social science because it studies human behavior as it relates to managing resources. That's why pure capitalism and pure socialism were never going to be the best way to do things because humans have a both a strong sense of community and a strong desire by individuals to be rewarded in some fashion for extraordinary work. I think our resource management systems will maintain and adapt to accommodate both human ideas.

[RiverDog]

It wasn't that long ago they were saying overpopulation was the major crisis humanity was facing, that in x amount of years we wouldn't be able to feed the worlds population. I still see this as a greater overall threat than the US economy facing an adjustment period. The US economy will be fine.

Looking at the data, which has been readily available for decades, it's hard to see how those folks could overlook the fact that the world birth rate, with an exception in the mid 80's (the baby boomer echo), the birth rate had been in a steady decline since 1950 with no indication that it would change its downward trend. The population was expanding due solely to the increase in life expectancy, and that at some point, the total population trend would flatten then begin to curve downward.

https://www.macrotrends.net/countries/W ... %20rows%20

The threat you speak of is limited exclusively to Africa and the Middle East, and I agree, it's going to be a huge crisis unless something is done. But everywhere else in the world, they don't, and won't, have a problem feeding their population, at least no worse of a problem than they have today.

So back to my question that I posed to ASF: How are you going to pay for the increased medical costs associated with an older population? In this country, how are you going to fund Social Security and Medicare? The problem isn't going to fix itself.

[RiverDog]

Dystopian movies always play better and I'm guilt of similar thoughts when it comes to the future like everyone.

But the reality is humans for all their faults always seem to find a better way to do things in the long run. There may be a period of problems, but systems will get updated and governments and human groups will adapt, there will likely be give and take by all income groups, and society will adapt, just as it did from the beginning of America and the world. Always adapting, learning, and finding new ways to live so human life can go on as comfortably as possible.

Given the history books tell us we started as random wandering tribes competing for food against animals, I think as far as we've come we will figure out how to best manage resources. It will likely be some combination of socialism (community) and capitalism (the human need to be rewarded for their work) that we have always used for time immemorial before we called it socialism and capitalism. It's humans who like things to be one way and get to attached to names rather than the underlying idea those names represent. Economics is a social science because it studies human behavior as it relates to managing resources. That's why pure capitalism and pure socialism were never going to be the best way to do things because humans have a both a strong sense of community and a strong desire by individuals to be rewarded in some fashion for extraordinary work. I think our resource management systems will maintain and adapt to accommodate both human ideas.

I don't necessarily disagree with any of that, but I have to get back to the same question I posed to Cbob: How are you going to pay for the increased medical costs associated with an older population? In this country, how are you going to fund Social Security and Medicare? The problem isn't going to fix itself.

[NorthHawk]

The corporations and companies will be making a massive amount of money they wouldn't have with a stable of employees, so tax them more to make up the difference in lost payroll and wage taxes along with the owners of private companies.
If money is being made, it can be taxed.

[RiverDog]

The corporations and companies will be making a massive amount of money they wouldn't have with a stable of employees, so tax them more to make up the difference in lost payroll and wage taxes along with the owners of private companies.
If money is being made, it can be taxed.

And those companies will simply pass that tax along to consumers in the form of higher prices. More inflation. And if that's all you're going to do to fix the problem, you'd have to raise taxes by one whole helluva lot and force many of those companies to go out of business. The long term funding shortfall for SS alone is $22 trillion. It isn't that simple.

A solution is going to have to include a number of things, including taxes on both individuals and companies, in order to come up with enough revenue/savings to offset projected shortfalls. Even if they did all the stuff I suggested, it still might not be enough. But it would buy time.