Arnold Kling

Megan McArdle on Demographics

Arnold Kling
Ron Paul's Baggage... Truck and Barter or Bandits?...

She writes (or will write--It really ticks me off that by the time my Atlantic arrives the best articles have been blogged. Remind me why I pay to get the magazine?)


As the Boomers age, they will consume fewer of the things that we produce efficiently, and more of the things that we provide relatively inefficiently.

This is an interesting point, and one which I had not seen made before.

I think she should have put more emphasis on the issue of Medicare's unsustainability. You come away from the article with the impression that although no one has the answer today, somehow we'll muddle through. The more we believe that, the more likely it is that we will default to huge tax increases to address the problem, which may indeed produce plenty of muddle but still not get us through.

There is more on demographics at this roundtable.

Philip Longman writes,


an astounding 19 percent of the women born in the mid-to-late fifties (the demographic epicenter of Baby Boom generation) never had children. This is nearly twice the rate of childlessness that prevailed in the previous generation. Another 17 percent of Boomer women only had one child, compared to 9 percent for women born in the 1930s.

...A preview of the future came in 2003, when in rapidly aging France a heat wave caused thousands of shut-in seniors to die alone. This is the scariest part of the age wave for me: thousands of seniors found dead in their homes and apartments every day only after the stink, or a wailing pet dog, alerts society.

...in the eyes of many, if not most, younger people, a Boomer without a family will be taken for an aging yuppie, a decaying narcissist, or ailing atheist—none of which stereotypes will be helpful in drawing public sympathy.


Clive Crook weighs in,

On the other hand, life as we know it has not yet stopped in Italy. Western Europe can and should be watched as an early indicator of problems ahead. But for the moment my main reaction to Megan’s article, and to Phillip’s response, was to think, if the United States has a demographic problem, God help Western Europe.

Megan responds,

Today’s elderly have already indulged the temptation to maximize their current consumption at the expense of future generations. America’s entitlement problems are simply the national version of the “I’m spending my kids’ inheritance” t-shirts popular with a certain type of senior. How will American policy, and culture, look when the numerous elderly have a lot fewer children to give them a stake in our collective future?

...I find plenty of support for my arguments in the European experience. Economic growth is slow—what passes for a boom year in Italy would have American pundits screaming “slump.”


Longman follows up,

— According to a GAO estimate, 60 percent of the disabled older adults living in communities rely exclusively on their families and other unpaid sources for their care.

— The imputed economic value of this support, according as a study in Health Affairs in 1999, is more than three times what Medicaid spends on its long-term care program, which requires beneficiaries to be indigent.

...I do not share the commonplace view that this generation as a whole will be healthier in old age and therefore more independent, of either family or government, than today’s elders. Fewer will die in their early 60s from smoking-related disease, but many, many more will spend years and decades beset by chronic long-term conditions such as diabetes, which has reached epidemic proportions. Just look around you. Every time I go to Wal-Mart these days, I find myself dodging very larger Boomers who are cruising the aisles on motor scooters.


Megan concludes, and in the process answers some of what I said about the Medicare issue. She implicitly talks about muddling through by scaling back on health care for seniors, except that

the “scaling back” will only be in relation to a future, higher standard of health care. Seniors in 2020 won’t be denied today’s lifesaving technologies; those will, by then, be cheap. Some could conceivably be denied access to the lifesaving technologies of tomorrow—but they will still be receiving the best healthcare in the history of the known universe.

Megan's last word:

In short, these are the worries of affluence. Will we use our rising incomes to help seniors to live an extraordinarily long time, by historical standards, or will a political showdown force the boomers to content themselves with being richer and healthier than any previous generation in human history? Will they play tennis into their eighties, or be brought low by their enjoyment of a rich diet? Will their advanced age leave them lonelier and less in touch with younger generations than their predecessors who were confined to threescore and ten? These are problems, to be sure. But they are problems we should be glad to have.



COMMENTS (5 to date)
rawdawgbuffalo writes:

just another factor I believe that is leading to the fall of America.... hope 2 die

http://rawdawgb.blogspot.com/2008/01/hope-2-die.html

Lord writes:

The UK has been mature for a long time. No disaster there. Productivity growth has been higher than here over the the last 30 years. Smaller numbers of relatively young workers tends to improve it.

jorod writes:

As long as people are free to innovate, the future appears favorable. When government kills incentives and freedom, society stagnates, workers become servants of the rich.

dearieme writes:

Uncluttered as we are by Christianity in Europe, we will adopt euthenasia on a large scale.

Barkley Rosser writes:

The problem with medicare is not the demographics. It is the ridiculous way we have our health care system organized. There are plenty of other countries that right now have the demographics we will have in the scary year of 2030 and are doing just fine, thank you, spending less than the US is now on health care in either absolute or even percent of GDP terms, having rising currencies and so forth, and much better health care outcomes as well.

I just took a look at the latest UNDP Human Development Report. The US is indeed #1 in the world in both amount spent per capita and in percent of GDP (15.4%). "Occupied Palestinian Territories" are second at 13.0%. Among the European countries, only Germany and France are above 10% (10.6% and 10.5% respectively), with their much worse demographics than the US. And, the US has slid to being tied for 29th in life expectancy in the world, with even worse outcomes for infant mortality and maternal mortality.

Oh, and to those "ethnicists" who want to argue that it is all master race Japanese and Nordics (look at Minnesota!!!), I note that Costa Rica and Barbados are ahead of the US in lif expectancy. Really.

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