Does demography rule the economy?
It can be argued that people-power is really what’s behind the economy. Can we see changes in the numbers and ages of people affecting some of the economic issues we confront? N.C. State University economist Mike Walden responds.
“Well, we certainly can. … Probably the biggest demographic force going on now is the aging population. We’re getting old. In fact in several years, close to 30 percent of people will be in the upper years of their life.
“And this is having a profound effect on the federal budget, because there are three big federal programs — Social Security, Medicare and Medicaid — that are targeted to the elderly population. And because the elderly population is growing so rapidly, those programs have been going up very rapidly.
“Today those three programs account for around 40 percent of all federal spending. By 2050, they will … account for two-thirds — two-thirds — of all federal spending. That’s why any serious look at the federal spending issue and the deficit and debt issues have to account for those three programs and likely will have to make some adjustments in those programs.
“Of course (this) will affect tens of millions of current citizens and future citizens who will be elderly.”Category: Economic Perspective