Global Economy Bursting?

[Big ole Boy]

Keynesian flesh longevity graphs

A Granny Smith apple costs $1.00

What are the longevity graphs going to look like when refrigeration in the South all but disappears?

We live in a time where the US is trying to emulate the command and control economy of China.

What happens when control becomes the command that some of the flesh (taxing units) are no longer required?

...what will the longevity graphs look like when tax revenues can no longer support spending?

... our longevity graphs are based on 80 years of an expanding Keynesian universe that is about to pop ....

those 80 years of Keynesian flesh will have to find wild berries and figs without ice cream


...what will those longevity graphs look like then?

 

[Randolph Kinney]

Have some statistical evidence. The ultimate age men attain has changed by less than three years. That has a minuscule impact compared to nearly 40% increase in men reaching the age of 65.

I thought you would like to review this research by Harvard: Implications of Population Aging for Economic Growth

http://www.hsph.harvard.edu/pgda/WorkingPapers/2011/PGDA_WP_64.pdf

Abstract

Between 2005 and 2050, the share of the population aged 60 and over is projected to increase in nearly every country in the world. Insofar as this shift will tend to lower both labor force participation and savings rates, it raises bona fide concerns about a future slowing of economic growth.

These concerns apply to both developed and developing countries. An examination of past decades’ data for OECD countries reveals that life expectancy has increased much faster than the legal age of retirement. Indications are similar in developing countries, which face the additional challenge of getting “old” before they get “rich”.

This paper analyses the implications of population aging for economic growth.

Introduction

The world is entering largely unfamiliar territory with respect to population aging. Combined with the dynamic evolution of past variations in birth and death rates, recent declines in fertility rates and increases in life expectancy are causing a significant shift in the global age structure. The number of people over the age of 60 is projected to reach 1 billion by 2020 and almost 2 billion by 2050, representing 22 percent of the world’s population. The proportion of individuals aged 80 or over is projected to rise from 1 percent to 4 percent of the global population between today and 2050.

Part of this trend can be attributed to increases in the length of life, and part to shorter and later periods of illness. The net effect is an increase in number of years lived at old age without major health problems.

The drivers of aging

There are three main factors behind these past and projected increases in the share of the global population aged 60+ and 80+. First, declining fertility rates in recent decades have reduced the relative number of young people and pushed up the share of the elderly. The global total fertility rate fell from approximately 5 children per woman in 1950 to just over 2.5 in 2005, and the UN projects that it will fall to 2 children per woman by 2050 (United Nations, 2009). Most of this decline has occurred in the developing world; this will contribute to a near halving of the share of children in the population of developing countries between 1965 and 2050.

The second key factor relates to recent increases in life expectancy. We calculate, for example, that one-fifth of the rise in India's 60+ population projected between 2000 and 2050 is due to rising life expectancy during that period; the corresponding figure for China is one-seventh. Global life expectancy has increased from 47 years in 1950 to over 65 today, and it is projected to reach 75 years by 2050.

As higher numbers of people survive into their 60s and beyond, the absolute number of elderly will soar. Combined with fertility declines, this results in a sharp increase in the share of elderly in the overall population.

The third factor behind population aging relates to past variations in birth and death rates. For example, baby booms resulting from increased fertility in rich countries after World War II are now shifting population structure as the cohort of boomers passes the age of 60. In parts of the developing world as well, some particularly large cohorts resulting from sustained high fertility rates in the presence of rapidly declining child mortality are now moving towards the 60+ age range, substantially altering population age structure.

 

[Randolph Kinney]

Population Aging and Economic Growth in China

http://www.hsph.harvard.edu/pgda/WorkingPapers/2010/PGDA_WP_53.pdf

These concerns have found resonance in China, where more than 30% of the population is expected to be age 60 or older in 2050.

The roots of population aging in China are the same as elsewhere: a low fertility rate, rising life expectancy, and the cumulative effect of past changes in birth and death rates. In China, obviously, the decline in the fertility rate, brought about in significant measure by the one-child policy and government efforts leading up to its adoption, has been a central factor in the changing age structure of the Chinese population. Greater longevity has also obviously been a key factor in population aging.

 

[Couch Potato]

Disaster on the horizon

I am not arguing increased life expectancy is not an issue, but the form of the increase. It is not old age being a longer part of people's lives, rather it is more people living long enough to reach old age. When social security was passed those aged 65 years represented about 50% of the population born 65 years earlier. Today those aged 65 years represent over 70% of the population born 65 years earlier. It is the volume of people reaching old age that has increased much more than the length of time elderly people can expect to live.

Combine the above with any decline in the birth rate, and you have a recipe for a social security disaster. That is what is "cooking" and I think it is just about done. :new_all_coholic:

 

[DMZwerg]

The immigration trend into the U.S. has already slowed down and has turned negative. [url]http://www.pewhispanic.org/files/2012/04/PHC-04-23a-Mexican-Migration.pdf[/URL]

The problem with the numbers and synopsis is that it assumes all immigrants will try to stay in the US once they come over, and in particular illegal immigrants. Well, that is not the case. Many immigrants (namely migrant workers) would work harvest cycles starting by crossing the border then doing a cycle of migrant labor then returning to live in Mexico between harvests. The flow of migrant workers had already slowed before "the wall" went up in part due to having trouble crossing BACK into Mexico. Combined with the newer anti-immigrant laws, particularly in a couple of states in the south, many of the migrant workers have found themselves virtually captive in the US unable to return to Mexico, and due to this is one reason for decreased movement of Mexicans to the US (now many illegal migrants are Guatamalans rather than Mexican nationals). Another aspect of the earlier Mexican workers was to get jobs in the US in service industries like maids and such then cross back into Mexico and have a better chance to get jobs in hotels and such in resort areas (as they have better command of English, often skills in dealing with Americans, and sometimes even references).

Then there are work visas which allow foreign workers to work in the US (and "paying in" to some degree) then usually going back to their home countries as they get older, thus not being part of the larger aging population here.

But all that is beyond the point ... my point is that the post 2010 ramp up in that graph is based on two years of data at most and predicts a continual increase in the "dependent" population that is NOT there amongst the young and is predicated on a continual increase is expected remaining life amongst the elderly ... aka, it is an obvious propaganda piece based on rough estimates and showing a worst case scenario. The problem with such graphs is that when used by the uninformed out of context they make things appear far gloomier than the real picture. When taken in context of the other graphs it is fairly obvious what it is and what it's purpose is.

 

[Randolph Kinney]

Food price increases tied to labor shortage

http://www.thecalifornian.com/article/20120810/NEWS01/308100036

In California, 98 percent of farm laborers are immigrants and two-thirds lack authorization to work in the U.S.

“We need to be unified as an agricultural community to convince the federal government that something needs to be done in a very short period to legitimize our labor force,” said Sam Turner of Calistoga-based T & M Agricultural Services.

Turner said Napa County is experiencing a severe labor shortage. Trends indicate it could get worse.

And growers in no other state depend so much on immigrants, particularly from Mexico. But in recent years, Martin said, four workers have returned to Mexico for every one who arrives.

Of 35,000 domestic workers referred to growers by state employment departments nationally in 2010, 68 percent rejected the jobs outright, and another 27 percent either didn’t show up for work or left before it was done, said Carol House, a National Academics of Science statistician.

Manuel Cunha of the Nisei Farmers League said stepped-up enforcement is disrupting local economies. One San Joaquin Valley packer lost 70 percent of its workforce when immigration agents conducted an audit and found undocumented workers, he said. Such actions ripple through communities as growers have no place to send their harvests, pickers lose jobs and workers flee with their families.

 

[DMZwerg]

The burden of supporting a non-working population that is increasing faster than the working population is unsustainable.

How many on this forum alone are over 64 and still working?

At the very least the graph supposes that all stop working at age 64 ... which can often be shown to be false just by shopping at Walmart.

In other words, it is a doom and gloom propaganda piece to get people all worked up and push certain agendas (such as raising retirement ages or such).

 

[Randolph Kinney]

But all that is beyond the point ... my point is that the post 2010 ramp up in that graph is based on two years of data at most and predicts a continual increase in the "dependent" population that is NOT there amongst the young and is predicated on a continual increase is expected remaining life amongst the elderly ... aka, it is an obvious propaganda piece based on rough estimates and showing a worst case scenario. The problem with such graphs is that when used by the uninformed out of context they make things appear far gloomier than the real picture. When taken in context of the other graphs it is fairly obvious what it is and what it's purpose is.

I refer you to the Harvard studies posted above.

Also for your review and critique: http://stats.oecd.org/Index.aspx?DatasetCode=MIG#

Also the news article on the effect of immigrant labor (legal and illegal).

 

[DMZwerg]

Have some statistical evidence. The ultimate age men attain has changed by less than three years. That has a minuscule impact compared to nearly 40% increase in men reaching the age of 65.

So, in 1990 men that reached age 65 enjoyed a 20% increase in average expected lifespan beyond age 65 compared to 1940 and women 33%. In other words the raw average number of years of payout increased by 20% for men and 33% for women and the percent receiving that went up from 53.9% to 72.3%. For men the 53.9% death rate before age 65 and 12.7 year average lifespan equated to an average of 6.85 years of payout per worker in 1940 and 11.06 years in 1990 or over a 61% increase just in average payout-years per worker who lived to / contributed by age 21.

Thanks Couch for the data to crunch!

 

[DMZwerg]

White females live the longest and have the fewest children, actually the white population is shrinking.

There is another factor impacting population shrinkage ... the definitions of "race" are such that if any crossing occurs the resultant is never "white" but is considered the "minority" (Hispanic, African American, Native American, Asian, or whatnot) at least for a certain number of generations.

Just pointing that out as well.