If the US economy functioned fine 10, 20, 50, and 100 years ago, when the population was ~half the size, why can’t it withstand a population decline now?

Question

If the US economy functioned fine 10, 20, 50, and 100 years ago, when the population was ~half the size, why can’t it withstand a population decline now?

In: Economics

Answer 1

The main thing is the proportion of old people to young people. While a population is growing there are more young people working and playing tax, when a population declines you have fewer people being born while everyone already alive gets older. So the proportion of young people working and paying tax goes down while the proportion of old people claiming pensions and benefits goes up. So governments make less money but have to spend more.