The World Won't Be Aging Gracefully. Just the Opposite (Cont)

America certainly faces some serious structural challenges, including an engorged health-care sector and a chronically low savings rate that may become handicaps as we age. But unlike Europe and Japan, we will still have the youth and fiscal resources to afford a major geopolitical role.

Consider China, which may be the first country to grow old before it grows rich.
China's coming age wave -- by 2030 it will be an older country than the United States -- may weaken the two pillars of the current regime's legitimacy: rapidly rising GDP and social stability. Imagine workforce growth slowing to zero while tens of millions of elders sink into indigence without pensions, without health care and without children to support them. China could careen toward social collapse -- or, in reaction, toward an authoritarian clampdown.

Russia, along with the rest of Eastern Europe, is likely to experience the fastest extended population decline since the plague-ridden Middle Ages. Amid a widening health crisis, the Russian fertility rate has plunged and life expectancy has collapsed. Russian men today can expect to live to 59, 16 years less than American men and marginally less than their Red Army grandfathers at the end of World War II.

All told, population trends point inexorably toward a more dominant U.S. role in a world that will need us more, not less.

Abraham Lincoln once called this country "the world's last best hope." Demography suggests that this will remain true for some time to come.
Link -
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/02/AR2009010202231....
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Whilst this article, from January 2009, makes a number of good points, it is also incorrect in some areas.

For starters, the current GFC IS actually partially attributable the leading edge of the Boomer retirement phenomenon.

Why? Well, because although the first of the "official Boomers" don't start retiring until January 1st, 2011, the actual start of that Baby Boom has its origins in the Great Depression of the early 1930's and because retirement doesn't start on the day of retirement, it starts a good 10 years earlier, by changes in spending & savings habits!

The article also ignores the real world, which is now starting to see the effects of a Post Peak Oil world, with Oil production having effectively Peaked around 2005. I also ignores the reality of Climate Changes and what that will mean in the short, medium & longer term, to both Demographics & the Global Economy!

It is true that Aging has always been a human condition, but never before to this extent, in just ONE GENERATION. We have also had instances of Depopulation (Population Decline), but never before on such a Global basis, with the numbers anywhere near these massive levels!

So, Yes the Economics are grim, but the alternative is even more grim!

We either face the issues now or try to delay the day of reckoning again, with yet another Baby Boom &/or by imposing massive levels of immigration, which also has some inherent problems.

This would simply exacerbate our problems, by forcing Essential Resources, such as Oil, Coal, Gas, fresh water & Food production, into a faster decline and leave humanity more exposed to a "die off" or "Extinction Event", directly by our own hands or indirectly via Climate Change!

The time has come, for us (Humans) to pay the piper, change our ways, change the system and get back into balance!

Either that or our tenure will be limited and we may be dismissed, without further notice!

Intraday Tips wrote on Aug 23^rd, 2010 at 8:14pm:


Intraday,
Welcome to OzPolitic in general & to the Finance & Economics section, in particular!

I note that you see Japan as having some upcoming difficulties, how do you see the future Japanese share market in particular and the Global (inc. Australian) share markets, in general?

perceptions_now wrote on Aug 25^th, 2010 at 1:49pm:


Partially model of new workers supporting retirees is to blame for.
I consecutive Governments put away some money away for every alive person we would not have such problem.

Wasteful management and temporary nature of Government (3 years between elections) make politicians do what they did.

Sure, if we don’t stop growth of population at some stage we will end up with the option of inescapable cannibalism in order to survive.

Shrinking global child population

Key points
•The total number of children globally aged 0-14 shrank in the decade from 2000-2010, dropping by an average annual of 0.1%.  
•Longer-term, a shrinking child population will feed through to smaller numbers of working-age people, which will make it more difficult for governments and companies to support retired consumers. The number of 65+ year-olds rose by an annual average 2.5% from 2000 and 2010 to account for 7.9% of the total population globally.



Global and regional trends
•The fertility rate required for natural population replacement is 2.1, meaning that the global average is still higher than this level. However, in 2010 in Japan, which has the world's oldest population, fertility rates were 1.3 children per woman;
•79.5% of the world's children aged 0-14 are located in Asia Pacific or the Middle East and Africa region in 2010, where countries tend to have the highest child population growth rates. Even here there was a sharp fall in fertility rates between 2000 and 2010, from 2.9 to 2.5 in Asia Pacific and in the Middle East and Africa region from 5.3 to 4.6;

•Many Eastern European countries have amongst the most rapidly declining child populations in the world. Between 2000 and 2010 the number of 0-14 year-olds fell by an annual average of 4.8% in Moldova and by 3.6% in Lithuania.  
•The Middle East and Africa are seeing the most rapid increases in those aged 0-14. For instance growth in Qatar and Bahrain was 6.6% and 6.4% respectively on average per year over 2000-2010, although the small size of these countries makes them special cases. Many African countries had very high child population growth in the same period, especially Niger (4.0% per year), Sierra Leone (3.6% annually);

•In China the child population fell by 3.0% on average annually over the decade, largely thanks to the one-child per family policy, introduced in the 1970s, which has aimed to limit overall population growth.



Government policies
Many governments are implementing policies on child population:

•In some countries, governments are actively seeking to reduce birth rates to avoid pressure on resources. The most obvious example of this is China, the most populated country in the world, whose “one child per family” policy was introduced in the 1970s and has reduced birth rates from 18.2 per 1,000 people in 1980 to 11.8 in 2010, and the proportion of 0-14 year olds from 35.5% of the population to 16.3% over the same period;

•Other countries with high child population growth, for example in sub-Saharan Africa also have campaigns to reduce birth rates, for instance by promoting the use of contraception and encouraging women to stay in education;

•Many developed nations with declining child populations are attempting to encourage higher birth rates. For example, Australia offers a cash payment and other social security incentives for every child born, while European countries including France and Italy offer incentives for couples that have children. These efforts are aimed at offsetting a declining population;

•The impact of the 2008-2009 global economic recession may discourage couples from having children, at a time of economic and employment uncertainty, whilst reductions in child benefits in some countries such as Spain or Greece may also restrict birth rates. In parallel, many governments in the developed world are seeking to raise retirement rates in order to keep people in the labour force, to reduce pension deficits. The old-age dependency ratio (the proportion of 65+ year-olds to the total population) was 12.0% worldwide in 2010 but much higher in countries such as Japan (36.2%) and Germany (31.2%).
Link -
http://blog.euromonitor.com/2010/08/shrinking-global-child-population.html
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Whilst the Aging process has already increased from 1980 to 2010, the rate of that increase is set to rise dramatically between now & 2050, with the over 65 year old group estimated to increase by between 50 to 100%.

This will dramatically affect many areas of the economy, including & resulting in -
1) Demand in many areas, including housing, as retirees spend less.
2) Pension obligations of government will increase.
3) Health Services Demand & Costs, will increase.
4) The Employment/Total Population participation rate, will decline, which will mean fewer workers supporting more Non-workers.

The above & much more, will result in lower government revenue, higher Business & Personal Taxes, but also a higher government Revenue to income gap, which means increasing Deficits & Debts, "just as we thought they couldn't go any higher?".
 

Sappho wrote on Aug 29^th, 2010 at 12:35pm:


Well, it certainly does present, as a Gordian Knot, I think we can agree there is little that now presents as an easy or at least easier option!

Of course, as I have said in other posts, it would have made life much easier if change had of started some 50-60 years ago!

That said -
1) I agree governments need a longer horizon to look at this and other problems and to take the actions needed. However, the whole Political & Economic landscape also needs to change, before anything else will actually do any good.

2) Yes, you can, look at China.

3) Regrettably, those poorer nations may pay a higher price, than others, as events move on.

4) That is a large part of the problems, Exponential Growth of any sort, in a finite environment, will automatically & always lead to great difficulties, when nearing the end.
Capitalists & Capitalism can look forward to some changes, not all to their liking, but I'm equally sure that there will be few that will like or want some of the changes that must come, if we are to see out this century?

perceptions_now wrote on Aug 29^th, 2010 at 10:17pm:


Capitalists have a role to play in population reduction you know. They can assist in making poorer, over populated nations more affluent and therefore less inclined towards many children because the few created have a greater chance of survival.

You sound like one of those Socialist Dictators of the last century... Way behind the times comrade. 

Sappho wrote on Aug 29^th, 2010 at 11:38pm:


You said, "You can not control a persons right to procreate", I simply pointed out that it could be done & it has been done.

Now, if you had of asked me, I would have told you that I personally think that China's ONE child policy may have been needed for them & perhaps for India, but everywhere else I would have gone for two children.

That said, I suspect that the days of governments having to enforce the size of families is probably now in the past, if the Global Population goes into decline within 20-30 years.

Btw, you certainly seem to make a few assumptions?

perceptions_now wrote on Aug 30^th, 2010 at 12:20am:


History shows that affluence reduces birth rates, because the likelihood of child mortality reduces significantly. Thus far, the only means to ensure affluence is Capitalism.

Quote:


You were the one who cited the One Child Policy. You were the one who choose not to extrapolate upon that idea.

Quote:


One child... two children... what does it matter what a Dictator decrees? They are still dictates enforced that go to the very core of human choice and seek to deny it.

Pity the divorcee with two children who would dare to fall in love with another who has none.