Bill McBride at Calculated Risk is fairly optimistic about the United States’ economic future. His position isn’t based on a sunny disposition — in fact, McBride was one of the first public commentators warning about the housing bubble and the inevitable bust and financial crisis.
McBride’s optimism stems in part from the simple fact that right now and for another decade or so the American economy is in a sense top-heavy, with a relatively large percentage of the population in retirement, not in the work force, and in need of government support through Social Security and Medicare. But as this older cohort of baby boomers cycles out of the population, i.e. dies, the nation will have a higher percentage of the population at prime working age.
From McBride’s post about these trends:
What jumps out at me are the improvements in health care. And also that the largest cohorts will all soon be under 40 (I suspect more and more emphasis will shift away from the Boomers to younger generations). Heck, in the last frame (2060), any remaining Boomers will be in those small (but growing) 95 to 99, and 100+ cohorts.
Some people are concerned about supporting those older Americans. But the ratio of total Americans in the prime working age (20 to 55) will be about the same in 2060 as in 1900. The mix of dependents will change (fewer young, more old), but having fewer infant and child deaths, and a longer healthier life, seem like huge positives to me!
