Headline September 06, 2016/ ''' *UNITED STATES* : AN OLDER SOCIETY? '''



*WILLIAM SHAKESPEARE* : ''There is nothing either good or bad,......... but thinking makes it so.''  

And that's one very great thought on the masterly business of thinking.  

*AN AGING UNITED STATES*  reduces the economy's  growth    -big time. That's the startling conclusion of a new academic study-

'And if it withstands scholarly scrutiny, it could transform our national political and economic debate'. states economist Robert J Samuelson. And continues the masterly narrative:

We've known for decades, of course, that the retirement of the huge baby-boom generation   -coupled with low birth rates-  would make the United States an older society. Similarly,  we've known that this would squeeze the federal budget.

Social Security and Medicare spending would grow rapidly, intensifying pressure to cut other programs, raise taxes or accept large budget deficits. All this has come to pass

But the study goes  a giant step further, claiming that the very fact that the United States is an aging society weakens economic growth. ''The fraction of the United States population age 60 or over  will  increase  by  21% between 2010 and 2020,'' says the study.

This aging shaves  12 percentage points off the economy's present annual growth rate, the study estimates. 

Although this seems small, it's enormous. Consider the numbers from the late 1950s to 2007,  the economy  [gross domestic product]  grew about 3% a year, sometimes a little more, sometimes a little less.

By contrast, annual growth since 2010 has averaged about 2%. But add in the 1.2% annual growth lost to aging, and we're roughly at 3% growth again.

To say the same thing differently: if other economists confirm confirm the study, we'd probably resolve the ferocious debate about what caused the economic slowdown.

*The aging effect would dwarf other alleged causes: a lag in new technologies; increasing economic inequality; debt hungover from the housing bubble; government over regulation; heightened risk-aversion by shoppers and firms, reflecting the great legacy of the Great Recession*.

In effect, demographics rule. The theory's added appeal is that it might apply globally, because almost all advanced countries are experiencing both aging population and slower economic growth. This implies.....but does not automatically prove.......a common cause.

Still, it won't be easy to convince other economists that aging explains most of the economic slowdown. 

Probably, the theory will strike many as too simple. ''I start with strong skepticism that one factor explains where we are,'' says Brookings Institution economist Gary Burtless, who has also done research on the impact of aging.

Co-authored by economists  Nicole  Maestas  of   Harvard Medical School and Kathleen Mullen and  David Powell of the  Rand Corp, a think tank, the study on aging compared U.S.states- with fast  and slow growing elderly populations.

States with the fastest increases in the elderly also had the weakest economic performance.

So are aging and economic slowdown linked?

The Honour and Serving of the latest  ''Economic Thinking'' continues. Thank Ya all for reading and sharing forward, And see you on the following one.

With respectful dedication to the Students, Professors and Teachers of the World. See Ya all on !WOW!   -the World Students Society and !E-WOW! -the Ecosystem 2011:

''' In Essence '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless


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