Falling fertility, debt and AI: is the US headed toward a population crisis? | US economy
Remember environmentalist Paul Ehrlich’s old prediction from the 1960s about how overpopulation would deplete the Earth’s resources and starve millions? His Malthusian condemnation of humanity’s insatiable appetites dominated the discussion It scares even young people about the future of the planet having children.
Ehrlich was wrong. But once we come to the conclusion that overpopulation won’t kill us all, we face another demographic emergency: We don’t have too many children, we have too few. This problem is real.
The last fear has come from the government Figures released last week show that the decline in fertility (the number of children a woman will have in her lifetime) in the US could accelerate, falling to a record low of 1.57 by 2025. Congressional Budget Office (CBO) in January of last year.
This is well below the rate of 2.1 children per woman needed to maintain a stable population; It’s a rate we haven’t reached since the Great Recession of 2008. The population has not started to decline, but it is aging rapidly. While this won’t starve us, it will further erode the tenuous foundation of U.S. social stability.
In 2000, there were approximately 24 Americans age 65 or older for every 100 working-age adults. According to CBO, this number will be 43 by mid-century. Taxes on a narrower segment of working Americans are called upon to fund Medicare and Social Security for a growing group of retirees, pushing deficits and increasing debt.
Spending on old-age benefits will rise from 6% of GDP at the beginning of the century to 12.7% in 2055, largely due to aging. CBO forecasts. CBO estimates that the fiscal deficit, excluding interest on the debt, will reach about 2% of GDP in the 2040s. Economists at the Fed and the Aspen Economic Strategy Group I guess that That would be a surplus if the ratio between seniors and working-age Americans stabilized in 2025.
Fertility rates are falling worldwide
This isn’t just America’s problem. Fertility is falling everywhere; in rich countries where the fertility rate is low and in poor countries where it is relatively high. Two-thirds of the world’s population lives in countries where fertility is below replacement rate.
This contributes to increasing public debt, which will reach almost 94% of world GDP by 2025. International Monetary Fund’s forecastsand is scheduled to reach 100% by 2029, a year earlier than projected in April 2025.
In China, where decades of policy limiting families to one child has led to one of the lowest fertility rates in the world. IMF predicts Aging is projected to slow annual GDP growth by about two percentage points between 2024 and 2050 and increase retirement spending by about 10% of GDP. Aging among OECD industrialized countries expected Increasing pension and healthcare spending by 3% of GDP.
This may not seem particularly alarming. stubborn Ehrlicians They still lurk within the environmental movement, hoping that the fight against environmental pressures can advance by controlling the population. Silicon Valley elites probably also welcome the happy coincidence that the working-age population stagnates just as AI is about to destroy human labor.
But decreasing fertility will not save the planet. Carbon emissions need to fall sharply over the next two or three decades. Populations don’t change that fast. A study found Even if worldwide fertility reached a replacement rate of two children per woman, global temperatures in 2200 would be less than 0.1C lower.
Proponents of depopulation misunderstand how humanity has prospered through innovation despite environmental constraints. Just as agricultural innovations feed a growing population on limited land, the path to decarbonization requires zero-carbon energy production on a large scale.
But innovation needs people. There will be less innovation in smaller populations. There will be smaller economies fewer resources to pay Innovation with large upfront costs and smaller markets to justify those investments. The population mass created by the baby boom, breakthrough in pharmaceutical innovation He targeted the ailments that boomers had as they got older.
Hopeful academics want to believe it’s just an issue spend money to have more children. The decline in fertility in developed countries is largely due to the increasing opportunity cost of childbearing for women who have to interrupt their education or career to have children. However too much evidence suggests that even societies that spend generously on public child care and family support to reduce the burden do not consistently increase fertility.
Trump’s White House has some ideas. It is planned to deposit $1,000 into the account bearing Trump’s name for each child born during Trump’s presidency. They aim to help women make love by giving them information about their menstrual cycles. She proposed a National Motherhood Medal to encourage patriotic women to continue doing so.
But even if this created a baby boom tomorrow, it wouldn’t solve the world’s financial dilemma. It takes 20 years or more for children to start contributing economically. More of these over the next few decades will increase the pressure on countries’ budgets.
What should be done? If a massive productivity jump could boost economic growth and support the unemployed, young and old, AI could strengthen the social contract. However, we should not rely on this. Given plutocrats’ longstanding hostility to redistribution, getting tech oligarchs to share the spoils of their revolution may not be easy.
Desperation fuels fear that our demographic predicament will inspire a darker answer. In PD James’s zero-birth-rate dystopia Children of Men, the difficulty of supporting older people is solved by facilitating their suicide. We know how to encourage seniors to accept the deal: making their lives miserable by depriving them of Social Security and Medicare.
