Barron’s Gene Epstein recently had a column entitled “The deficit deniers should do the math”. He presents a chart from the Census Bureau showing that the percentage of the U.S. population age 65 and older, now 22.6% of the total of working age Americans, will hit 30% by 2023, ten years from now, and 36.6% by 2040.
Right now there are 4.4 people of working age supporting each senior citizen. By 2040 this ratio will fall to 2.7 working age individuals supporting each senior. If we’ve got trillion dollar annual budget deficits now, how in the world will we pay for Medicare and Social Security in 2040 when there will be so many more seniors to support?
The Congressional Budget Office predicts that, under current trends, budget deficits will fall to about $400 billion in the next few years and then begin to rapidly increase after that. The Deficit Deniers conclude that the problem therefore isn’t urgent and so we can safely postpone action until the economy is more fully recovered before we start to worry about the deficit. This is very short sighted indeed.
We’ve had an anemic 2% annual growth recovery so far from the recession which ended four years ago. What if the recovery continues to limp along without picking up steam? We’ll still have the same demographic time bomb to deal with a few years from now, and we’ll be in no better shape to deal with it then than we are now.
With a President and Senate Democratic majority unwilling to address our urgent economic (7.6% unemployment) and fiscal (enormous annual deficits) problems in a serious manner, without demagoguery, the outlook for progress is grim indeed.