Long Burn

Boomer's Bills

I am reading 'The Coming Generational Storm' by Laurence Kotlikoff and Scott Burns. The book uses 'generational accounting' to make some sobering points concerning the economic crisis current policies are creating for our children and grandchildren. Some of the main points so far:

Life expectancies are up, birth rates are down and the world is getting older, fast. Right now, worldwide, children (age less than 15) outnumber older people (age greater than 65) by three to one, and the best estimate is that by 2050 this ratio will decrease to one to one. At this point the number of older persons will outnumber the number of children for the first time in human history. The ratios are higher in the developed world-- it is estimated that in Europe in 2050 there will be 2.6 older people for every child. In a single century (1950 to 2050) Japan will have gone from a ratio of 4.6 children per older person to 3.4 old people per child. This demographic change is going to put severe strains on household and national economies.

Older people vote, kids don't, and these numbers show up in what the government does with its money. In 1995 federal spending per child under 18 was $1,693, and per adult age 65 or over, $15,636.

The former chairman of the Council of Economic Advisors, N. Gregory Mankiw says, 'the [Social Security] benefits now scheduled for future generations under current law are not sustainable given the projected path of payroll tax revenue....They are empty promises.'

posted by Matt_J @ 9:22 AM