Policy

Fear of a Gray Planet

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Megan McArdle has a perspicacious piece in the new Atlantic on the likely economic and cultural effects of the aging of America's population. You ought to read it in full, but for a potted summary: likely slowdown in macro economic growth statistics as more Americans' needs shift from goods (where productivity growth is strong) to services (where it isn't).

She gently debunks the somewhat common fear of a huge stock market crash as the aging Boomers start selling off the stocks they've socked their savings in for decades. But she does think that double digit yearly stock market index growth is very unlikely down the line.

The implicit advice to the young? Go into geriatric medicine. Implicit advice to America? We'll need more immigrant service workers. (Paging Kerry Howley.) Implicit rebuke to aging Americans? You maybe shoulda thought about having more kids. (Paging Bryan Caplan.) And expect to see more graying heads in service occupations, as many Boomers didn't save enough to sustain them through their increasing golden years, and they'll have to keep working past standard "retirement" age, and Social Security won't sustain them. Nor will it bankrupt the Republic, in her reading--though Medicare just might.

Read the whole thing. It ends with a pleasing "life will go on, and still be sweet" tone, despite the possibly scary-sounding economic and cultural shifts she discusses.