[quote=briansd1]It seems pretty clear to me that population growth is the best way out of our economic malaise.
But some economists think there is a very important difference between Japan and the United States that can’t be overlooked. And it could keep the U.S. from plunging into a long-term deflationary spiral. Demographics.
“According to research from Brockhouse Cooper, a brokerage firm based in Montreal, the percentage of people aged 65 or older nearly doubled in Japan between 1990 and 2008. Meanwhile, that percentage has stayed roughly the same in the U.S.
So even though there are a lot more people in the U.S. that are retiring as the Baby Boomer generation gets older, total population growth is rising due to high fertility rates and increased immigration. That’s key since younger consumers tend to spend more.”
First of all, he’s looking at the past as far as U.S. demographics. As we all know, the boomers are aging, and this will increase the numbers of older Americans.
Second, he’s counting on the increase in the population of young people from increased fertility and from immigration to help pay for the aging boomers. “That’s key, since younger consumers tend to spend more.” Yeah, maybe they do in general. But probably not the younger consumers from the demographics he’s talking about. Carmel Valley’s Chinese immigrants notwithstanding, most immigrants are poor for at least a generation when they get here. And most of the increased fertility rates are from lower-income Americans. Neither of those groups are going to pay for the boomers’ entitlements.
Not that I’m in the deflation camp. But that article seemed to have some pretty weak arguments.
