Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The US Is Going Through a Profound Demographic Shift That Will Affect Everyone

Politics / Demographics Mar 08, 2017 - 12:06 PM GMT

By: John_Mauldin

Politics

BY PATRICK COX : The US fertility rate fell again last year, marking the lowest rate of reproduction since the CDC started keeping records in 1909. This prompted the amusing Bloomberg headline, “Make America Mate Again.”


The above chart shows that in 2015, there were only 62.5 births per 1,000 women of childbearing age. That fertility rate dropped even further, touching 62.3 births per 1,000 women, in the first half of 2016.

Demographic Headwinds

To put the fertility rate in perspective, it is now at about 1.85 births per woman. To maintain a stable population requires at least 2.1 births per woman. The US has been at or below the replacement fertility rate since 1972, as the chart below shows.

Demographers worry that a dwindling birth rate will hurt economic growth and tax revenues needed to fund transfer payments to a growing elderly population. Some project that fertility rates will rise when the economy expands.

If the Trump administration achieves higher economic growth, it’s unlikely to do so fast enough to support the mandated 9% increase in entitlement spending for older Americans without more deficit spending. Trump says he intends to preserve Social Security and Medicare spending levels, but he seems unaware of the demographic headwinds we are sailing into.

Few policymakers grasp the profound impact of an inverting demographic pyramid, simply because it has never happened before.

The Cure for a Broken Dependency Ratio

History does show, however, that there’s been a persistent downward ratchet effect in the US fertility rate: the downward movement may be temporarily interrupted, but then it resumes again.

Moreover, this is a long-term trend. Fertility rates began falling prior to World War II, despite the temporary uptick that led to the baby boom (blue segment of line). This chart shows births per 1,000 people in the US.

In short, the population dynamics that have broken the dependency ratio and created the unfunded liability crisis worsened in 2016. This dynamic won’t change fast enough to prevent a crisis that can only be fixed by extending health spans.

With longer health spans, older people can live healthier and longer and be more economically productive. They can then support their own retirements instead of relying on fewer and poorer young people to do so.

Subscribe to Patrick Cox's Investment Newsletter, Tech Digest

Be the first to learn about vast profit opportunities most investors have never dreamed of. Biotech expert Patrick Cox spotlights the latest breakthroughs and the innovative companies producing them each week—from non-invasive cancer treatments, to age-reversing nutraceuticals, to vaccines that kill any virus­. Get Tech Digest free in your inbox every Monday.

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in