The fiscal cliff may seem like a big fight over taxes and spending, but it's actually just an early skirmish in the inevitable war between the aging population, the mushrooming welfare state and, ultimately, sustainable economic growth.

The huge number of Baby Boomers in the workforce fueled an economic boom in the 1980s and 1990s, generating sufficient tax revenue to cover a relatively small group of retirees. But a welfare state that seemed like a good deal 50 years ago is rapidly turning unaffordable in the U.S. and other industrialized nations.