Column: Baby Boom, Baby Bust and 'Big Beautiful Bill'

As the Senate occupies the “Big Big Beautiful Bill” (the name of Donald Trump) approved by the Chamber last week, there is finally some discussion about national debt. This is due to the fact that the invoice will add $ 3.8 billion in the next decade to the current debt: $ 37 billion, or more than 120% of the US GDP.

Bond markets have been shouting Your disapproval. Bond investors demand greater returns because they are beginning to doubt that we can be trusted to pay our obligations. Interest on debt in fiscal year 2025 will exceed defense, Medicare and Medicaid expenses. By 2035, it is projected To overcome everything except Social Security.

Instead of enjoying the usual expert about republican and democratic hypocrisy and the expense of bad marls, I want to remove the lens a bit. We cannot let the congress out of the hook, but it is worth asking if our problems are more structural than the history centered in Washington about cowardly politicians.

The phrase “Demography is destiny” is used in excess and abuses, but there is something really. Consider Thomas Malthus. In “an essay on the principle of the population” (1798), the pioneer economist identified what was known as the “Maltusian trap.” In prosperous times, the population grows geometrically, but food supplies increase only arithically. More babies lead to less resources per person, which eventually causes a collapse of the population. Malthus has a bad reputation because he was generally retrospectively but deeply mistaken. In other words, he offered a useful general rule on how demography and economy had worked for thousands of years at the right time that the rule was reaching its expiration date. Since 1800, humans have discovered how to increase food supplies to overcome population increases.

But if you were a policy manufacturer in 1800, you would have been a fool not to take Malthus seriously. The problem today, unlike 1800, is that we are in unknown territory when it comes to the calculation of the population and resources. No society has become so rich and as ancient in the midst of such an accident in fertility rates as ours. And although our debt is promoted by many factors, it is the cost of rights, particularly for the elderly, which is, with much, the most serious in much of the rich world..

In 1940, when retirees began to receive benefits from Social Security, there were 42 workers by recipient. Today there are about 2.7 workers for each Social Security beneficiary. In Japan, the oldest nation in the world (where debt is exceeding 255% of GDP), the number is 2.1. This trend applies across The developed world.

The main reasons for this are quite simple: we are doing less babies and older people live much longer. In 1940The life expectancy at birth for American men was 61.4; For women it was 65.7. If it reached 65 years, most people had approximately a dozen years. Today life expectancy At birth it is near At 80. Not only people do not reach more than 65 years, but when they do, they can also expect to live almost 20 more years.

Ah, and contrary to much political rhetoric on how social security payments are simply “your money” paid to the system for you throughout life; A majority of beneficiaries Receive much more what they paid.

He “Dependency trap“, As economists and demographers call it, it is the last problem of the first world. People older than 65: 7 of the 10 of them voteand vote their economic interests.

Of course, the imbalance between workers who pay and retire is not only a challenge due to social security, but it is revealing that Social Security is the only program that is so expensive that it will continue to exceed interest payments on debt if current trends are maintained, a reason why it is projected to be insolvent in eight years. The old age health program is expected to Medicare, be insolvent in 11 years. This neglects the huge private costs of a population that ages. Many families pass vast sums in the last years of their parents' life.

Again, we do not know how this will end because societies have not been here before. But if we do nothing, some type of debt crisis seems inevitable. There are things that politicians could do to mitigate the worst scenarios. Both the United States and Germany has encouraged later retire to help mitigate the problem. But for my part, I don't find much comfort in the idea that our current politicians will suddenly find the wisdom and courage required to do much more.

Another source of hope is the same that ended up making maltusianism debatable: technological innovation. Medical advances It could make old age more affordable. Artificial intelligence could boost productivity to make the loading of workers per retire lighter. Large -scale immigration would temporarily have a similar effect.

But the most indispensable previous requirement to deal with the debt problem would be for voters to worry about it. Unfortunately, I don't see much hope for that either.

@Jonahdispch