First: the U.S. is not facing a population decline.
But assuming it was, it’s not just there are less people, but how they are distributed. You have lots of old people who don’t work, don’t really buy most things, don’t invest much, but still drain the resources of the system (which is their right: they paid into it their entire lives)
You have fewer highly competent people to keep everything running, and even fewer new people entering the workforce to keep it working.
You have a smaller young population that is usually the source of most purchases, meaning that there is simply less demand and fewer jobs.
You have a smaller middle-age segment where most of the liquidity and investment comes from, meaning the entire system threatens to lock up.
A shrinking population is not a good thing, and it’s rather upsetting that these problems were not discussed at the same time that certain people were shouting that we should have fewer children.
Part of the problem is economies of scale. Pretty much the entire western economic system is hypertuned to provide goods and services at the current and increasing level of population with all the scale effects that accompany it. Reduce the population and you end up having both less economies of scale effects AND fewer people who actually pay for goods and services. That means prices will skyrocket.
In the end, population decline is something that needs to be manages, and I think it’s unclear if our current understanding of capitalist market models and public policy are well suited to manage this shift. One example: It is not possible to sustain a nation’s road network for half the population it was designed to accommodate, because roads cost money and money comes from tax payers. When you have a large city with roads to 10 neighboring villages, but those villages (and the city) experience a 50% population decline, you’d have to stop maintaining 50+% of the roads (50% due to lack of tax payers + x for rising cost to maintain the remaining roads). Now, of course, in real life it’s not that 5 of those villages become deserted, while the other 5 don’t experience any population decline…. so what do you do now? You still have people living in 10 villages who require roads to the city, but in fact you can only maintain 5 of those roads. You’d have to relocate people to maintain “population centers”, so that you can cut off public services to places that are no longer needed, all while the prices will still get ever higher.
The capitalist economic model demands constant growth year after year- bigger numbers, bigger profits- or it considers a business failing to return, including at the cost of splendiferous waste. Iirc something like 40% of all food produced in the USA is eventually just discarded.
The US economy doesn’t function that well though. Great depression, housing speculation, prison slave labor, company towns & union busting, human trafficking, mega corporations… the list goes on. Maybe this sounds cynical but it isn’t going to get better as things stand.
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.
The problem is that the social welfare problems have now gotten to large and cannot be sustained with a declining young population (work force, paying taxes) AND the fact that a ton of working age people have checked out of the workforce entirely.
Social Security: $1.4 trillion was spent on Social Security, which is 21% of the budget.
Health insurance: $1.6 trillion was spent on health insurance, which is 24% of the budget. This includes Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and Affordable Care Act (ACA) marketplace health insurance subsidies.
Employment-population ratio: In January 2024, the employment-population ratio was 60.2% for people aged 16 and older. This ratio has been between 59.9% and 60.4% since March 2022.
It has been in between 57 and 67% since the 50’s, but in the last 15 years there has been a “hidden” decline of people who are so uninvolved in the work force that they don’t even show up in the stats. (People of working age who haven’t even been looking for a job and haven’t had one for a long enough period of time that they aren’t considered workforce participants)
In the 1970 fiscal year, the United States spent $143 billion on social welfare programs, which was 15% of the country’s goods and services output. This was a significant increase from 1965, when the percentage was 11.8%. The growth in social welfare spending was almost double the rate of growth of the gross national product (GNP).
In summary – social programs in the 70’s were 15% of the total budget in the US. Now they’re 46%. The workforce has remained at around ~62% of the population during that entire time frame. As the”baby boomers” are poised to leave the workforce, and birth rates are declining, the social program expenditures are going to increase and the tax base is going to decrease simultaneously.
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