Boomer Blame, part 3

Two of last three posts have dealt with the baby boom and subsequent generations. This is the third and last intended installment in my blog series on Boomer Blame. Baby boomers, as noted in a prior post, are those having been born from 1946 through 1964. The two prior posts in the Boomer Blame series dealt with issues of demographics and then of the relationship of demographics to economic growth. This final post will deal with the Social Security, and the problem it faces in the not too distant future.

Social Security card

Social security dates back to 1935 and it pays benefits from the reserves in an account formally known as Old Age Survivor’s Insurance Trust Fund. (OASI). There also exists, since 1957 a Disability Insurance Trust Fund, and while separate funds, they “are managed under parallel procedures.” (Pattison, David; p. 2 Social Security Bulletin, v 75, No. 1, 2015). Today they are generally referred together as the Old Age, Survivors, and Disability Insurance Trust Funds (OASDI). I think the long name is self-explanatory as to purpose. Yet, these funds are more complicated than being in a simple trust fund. The Treasury uses the trust fund money that is deposited to reduce its it overall borrowing for other operations. Basically, the receipts are loaned to the government. This is one problem. Another problem is related to demographics. Us baby boomers are starting to retire and some have started to draw on social security. The first boomers started to reach age 65 five years ago. The boomer generation is so large that it is not just the withdrawals that affect the funds, but also the fact that less high level wage earners contribute.

One idea of how it works

The trust funds receive income from two main sources—tax income, think of the FICA deduction in your paycheck, and the other is interest earnings on the revenue reserve. Think about it, the main high earning years are said to be between ages 45 to 54, so it is only two years before the full boomer cohort will have moved beyond their peak earning years. The bulk of the boomer generation has already moved beyond their peak earning years. These are the rough numbers, but of course every individual situation is different, some may see their peak earning years last longer. One website indicates that 77% of all financial assets in the nation are held by persons age 50 or older. Millennials may now be dominating cultural trends, but from a financial asset standpoint older generations still control. In any event, while the 45-54 age group may be in their peak earning years, Dent and others point out that age cohort (particularly the first five years) spends the most. It is at that age that housing is up-sized, they have children in their teen years or beyond,  with college expenses.  In general peak purchase years. Therefore, while incomes, according to the general trend may be lower for those in 55-64, I suspect before retirement the group sees some clear saving years. Although hopefully they started saving for retirement years earlier. Social security has already been affected by these changes.

Ponzi Scheme?

In 2005/2006 Reznick, et al authored a paper (Social Security Bulletin V. 64, No. 4, 2005/2006) that indicated the trust fund would be exhausted in 2040. However, the more recent paper, ten years later that is quoted above indicates that date to now be 2033. So much for projections. (One thought for the dramatic change is that the Obama Administration approved the inclusion of many unemployed onto disability as a way to increase spending during the great recession.) Some policies of the agency also work to increase insolvency. At this rate the fund may be near broke by the time they figure it out. The math is just simply not sustainable. This can be seen by the dependency ratio which has continued to increase. The dependency ratio is a measure which shows the number of dependents, those aged zero to 14 and over the age of 65, to the total population. For example, the ratio was 67 in 2010, but will increase to 83 to 85 between 2030 and 2050. There are fewer and fewer workers to support those on social security or younger children in their own families. The Reznick study notes that the problem is not only that people are living longer, but they are also persons are having fewer children. They go on to say that this “demographic challenge has been recognized by policy analysts as well as policy makers. President George W Bush gave a succinct summary of the situation in his 2005 State of the Union address.

What does the future hold?

Major changes to Social Security, while necessary for the health of the system, are simply politically unpopular. Just as the NFL Players Association looks out for the veteran players, AARP looks out for those already retired. By the time Social Security faces crunch time, it will be too late to act. In the meantime the mischief's of faction continue to hold up the advancement of equitable policies to make sure that those who put in to Social Security will reap the benefit. Over one-third of persons who will look to retire will pretty much be fully dependent on social security. In addition, the web site Statistic Brain indicates that the average net worth of a couple age 55-64 is (January 2016 report) is just under $46,000. Not much in savings.  Americans are thought of as spenders and this may show come their intended retirement.  Many companies no longer have pension funds, or retirement accounts, hence an employee is often on their own, and many lack the control necessary to save for a rainy day, much less retirement. Social Security is in a perfect storm with an increase in retirees, people living longer, fewer children being born, retirement planning left to the individual, and factional groups that look out for short term interests.

Images from Google

Fish Out of Water

Weather wise in my locale, this past Sunday was a spectacular September day. Given the clear and warm weather I, at the urging of my wife, decided to go kayaking on part of the Yahara River. What was unique was not the kayak experience, but where old fashioned recreation (paddling) met with 2016 recreation—Pokemon Go. I felt like a fish out of water when I arrived at Fish Camp County Park.

Air photo of Fish Camp, Canoe area is in center
Google maps

I normally would put in just south of McFarland, at an access point off of Sleepy Hollow Road, and often kayak three and one-half miles to Fish Camp and then back. Seldom have I seen other kayakers or canoers when I arrivede at Fish Camp.  If I see anyone it is a person putting in a motor boat to fish on Lake Kegonsa. But on Sunday, the local McFarland Festival parade was in progress, so the easier way came to drive a few miles to Fish Camp County Park and basically reverse my route. Given the time of year, and past experience, I did not intend to find the park busy, but  thought perhaps there may be one or two others that had put in at that launch site.  As I was about to turn onto Fish Camp Road, I noticed that my thought was completely wrong. The rural road edge was lined for much of its distance with cars. Fish Camp is not a big picnic area, as it lacks a picnic shelter, so I wondered what was going on. I thought perhaps a fishing demonstration, but as I took the right onto the drive to enter the canoe/kayak parking area, I quickly noticed that it was not fishing related at all. I quickly noticed many persons with heads down and playing on their smartphones. My next thought was that it was a Pokemon Go assemblage, and so I carefully drove down the drive to near the boat launch to avoid persons wandering all around the grass and pavement with heads down oblivious to traffic or, wonder of wonders, someone who was going to actually use the canoe/kayak launch for its actual purpose. As I was unloading my kayak, I inquired of an individual if they were playing Pokemon, and he said “yes, there are many at this site”.  After driving back to Fish Camp Road to find a parking space, I counted 40 cars parked along the road. This did not include the cars parked in the canoe/kayak launch parking lot. Needless to say, I felt like a fish out of water. I mean I was the only one looking to launch a small watercraft.  I was also the only person that either did not have a cellphone in my hand, or with someone who did.

The density probably approached this in parts of Fish Camp

With little other interference I was able to put in and after about 15 minutes of paddling was beyond the area that is bordered by many homes, into a more rural area. It is then that the benefits of paddling are realized. I saw a heron, several birds, and young ducks, but not adult ducks. A few trees were turning gold at the top and a few maples starting to turn to their bright red. The gold provided a contrast to the crimson color of the understory shrubs. Farm fields were tan as the soybeans and corn were starting to dry.  Cattails are especially present along this part of the river, and a person had constructed duck blinds within the cattails. Showing the ever present level of nutrients within the stream, two county lake weed cutters were parked along the shore, although probably near a mile apart. On my paddle route, I saw three canoers and four other kayakers. How many put in at Fish Camp I do not know as some probably live along the river or put in at a different boat launch. All in all it was a pleasurable day for paddling.

Pokemon Go on a cell phone

As I was heading back downstream to Fish Camp I came across a man in a kayak with a fishing pole who was paddling upstream. I said hello, and he commented that this was his first time on that section of the river, and how scenic he found the route. I nodded in agreement and asked where he put in. he said Fish Camp Park. I asked if all the Pokemon people were still present, and he said “oh yes. They need a life!” I had much that same thought when I saw them present. But as I paddled upstream, after having departed Fish Camp, I pondered their presence at the boat launch. I came to the realization, that there are many forms of recreational activity, and if that is what they take pleasure in, so be it. It reminds me of the geo-caching craze of a few years back, although I never came across many persons that were geo-caching. I know some park directors who like Pokemon Go as, they have commented, it gets people outside. But, I also know persons who live in the urban area of the near east side of Madison and they complain about players tresspassing through their yards to capture Pokemons. As I was pulling up do the dock to take out, I counted over 100 persons present on shore doing the Pokemon Go craze. Most were working their handheld device, in a rainbow of case colors, while wandering around thumbs waging war with the keypad. A few were sitting in chairs and working their device. Children were following parents around as they manipulated their devices to do what they need to do with Pokemon. I wish I had my camera as it was quite the scene.  What struck me was that there was a varied age demographic, from young children with a parent(s) up to persons likely in their late 60’s. Smartphones and Pokemon one common interest beween the varied age demographics.  Pokemon is not only used by millenials.

Photo of Fish Camp without Pokemon Go crowd
Weedcutter is at far end of photo, near the pier I used
Google images

As I pulled my kayak out of the frong green colored water, and lifted it off the pier to shore, I had to avoid a women spread on the ground apparently not enjoying the moment.  I did not see a cell phone in her hand.  She gave me an odd look, like someone actually paddles a boat.  I overheard a few people comment that they had never been at this park before. The County Park Department may like to hear that, but when all you want to do is put in a kayak, and you have to dodge wandering hordes and ill-parked cars, you wish there was less of it. The solitude of the journey and the view of nature in a changing season is a benefit of kayaking in the fall. While Fish Camp was not at all noisy, particularly given the number of people present (most were concentrating on their devices), the shore lacked a certain peacefulness.  Even though I was the one with there with the purpose behind the canoe/kayak launch, I felt like, as the saying goes, a fish out of water.  I really do not know much about Pokemonn Go, much less understand its draw.  But, people were out on a nice mid-September afternoon seemingly enjoying themselves.  Yet, I think I had the better experience by enjoying a paddle upstream with the sun beating down on the river and its user.  Perhaps it is best that multitude was on land and not in the water, as over 100 more canoes or kayakers would have made my experience completely different.

Boomer Blame, part 2

I was born in 1957, a year for the largest number of births in the United States until it was surpassed by a minor amount in 2007.  I am part of the baby boom generation.  People have been giving credit or blame to baby boomers for 40 years, ever since the first part of the generation created havoc in the 1960's on the societal norms of that era.  What most probably did not know at the young age of the boomers, was that there was more than social chaos, but that the baby boomers would unleash a spending tsunami.  The spending of the baby boom generation would have implications not only for the nation, but the world economy.  My prior post dealt with demographics and this post will deal with the link between demographics and what many see as economic health.

Economic health is a relative factor, and for much of human history economic growth puttered along until the time of the industrial revolution.  A person living in the mid 16th century would have more in common with a person in the year 600 than those in the 2010's.  Many traditional societies, as hunter-gatherer societies or cultures are often referred to, would know little of the concept of economic growth.  Yet, in the western world the impression of lackluster growth has brought down presidents, and prime ministers. From cities, to counties, to states, and to the nation, growth is often thought to be necessary to drive and enhance the lifestyle enjoyed in the west.  In the United States, it is almost as if growth is part of our DNA.  The need for growth and resources drove the settlement of distant lands.  It certainly was part of the original 13 colonies, and was perhaps most clearly expressed by not only Thomas Jefferson's Louisiana Purchase, but the whole concept of manifest destiny.  Who cared about the Indians of the west, the American goal was land from the Atlantic to the Pacific.

Head west young man

The idea of manifest destiny was seen as a natural progression of geographic growth.  But, growth is affected by more than geography.  One analyst, Mike Alexander, building on research of Harry Dent, believes that a downturn in population of the main spending cohort (what he and Dent say is ages 45--49) was partially responsible for the great depression.  Prior to the great recession, Harry Dent working off birth patterns and immigration, pegged the beginning of a recession in 2007.  Dent believes that peak spending occurs in the age 45-49 age cohort. As spending drops, so would the nation enter a recession. It is all relative. In fact, he has analyzed statistics to point to age 48 as the peak year. Since 100 economicst will give 100 different answers, another economist notes that the peak spending age is 46.5 years.  Whichever it is, they are close enough for this blogger.  The difference is minor when talking about generations.

Growth of the nation

After that age, spending tends to decline.  Of course, while a person is often a statistic, we all have our own lives, interests, and spending habits.  Yet, analysts like Dent pour over the data to make generalizations, and from this data he predicted a recession 2007, which in hindsight was quite prescient.  The great recession may have begun with the collapse of Lehman Brothers and other financial institutions, but perhaps those were the catalyst.  High gas prices, in a time before fracking (which has lowered gas prices), ate into people's income and caused less discretionary income. Some homeowners had over extended on their housing loans, this was affected by overbuilding of houses and a drop in demand, due to the smaller demographic.  Generation X, that smaller demographic stuck between the boomers and the millennials suffered the worst of the consequences.  Based on pure demographics, many would have thought that Dent's forecast for the recession would have occurred earlier, but Dent had a few year delay due to his having added migration patterns in to his calcuation.

Consumers account for about 70% of total GDP

By 2007 most of the boomer spending peak was coming to an end.  While the peak spending year was in 2009, according to Doug Short, spending was starting to plateau in about 2003 to 2005.  Yes, spending still increased, but the rate of increase was decreasing and a plateau of spending was starting.  The start of the spending plateau fairly well tracks the age of the 1957 birth cohort.  It is often said that President Bill Clinton pulled off economic miracles.  But, much of the growth in his presidency was actually related to the demographics of boomers entering their peak spending years.  Yes, trade deals of Clinton and prior administrations assisted by making overseas goods so cheap, and yes China was then up and coming in the international scene as an economic powerhouse (one could say boomer spending help make the Chinese economy), and yes, Clinton lessened the rules for home ownership which helped lead to the housing crash (and recession) a decade later, yet demographics still played a large role.  The boomer cohort on spending for themselves and their children was just too many persons and too large.  Add in that all the easy solutions for economic growth have occurred, information age and the large entrance of women into the labor force, and it means that other economic crisis may be more difficult to ride out.

Peak Spending by Doug Short, 2012

The Federal Reserve has kept interest rates so low for so long that they will now lack the ability to adjust to the next economic downturn.  Harry Dent has predicted, based on demographics, that the glory days of spending will not significantly increase for about 10 years, as the millennials reach peak spending age. Even then, the forecast is that spending will not increase as it had during the peak spending years of the boomers. The poor generation Xer's are just a small blip between demographic tsunami's.  They are the Rodney Dangerfield's of the current generations.  Numbers produce dominance and the Xer's lack the numbers.  As long ago as 2004 CBS broadcast "60 Minutes" talked about how millennials were now starting to shape the world.  Back in 2004 the oldest of that group was just in college and the youngest in grade school.

Boomer waves, per blog "Economic Edge"

While the millennials, that connected generation, have reformed some aspects of culture, think craft beer and local food movement, us baby boomers will likely not go quietly.  You see, as us boomers are now looking forward toward retirement, and many already having retired, our spending is lower, but we also will continue to drive some aspects in our culture.  Their is a reason so much is being written about retirement and if persons have set aside sufficient money for retirement.  It is because the boomers are driving that conversation, and financial planners are more than willing to make a buck off of the assistance,and advice, they can provide.  The boomer generation may be beyond spending on their home, large toys (think how Harley Davidson motor cycle sales boomed over ten years ago, everyone had to have a Harley), tuition for the kids, all things electronic (even now their is press coverage that cell phone sales have peaked--market saturation), and many other aspects of consumer goods.  Heck, I  now have trouble trying to find a gift for my spouse for her birthday.  Come to think of it, when did I not have trouble trying to think of a gift to buy her, so this is not a really relevant statement.  She has most of she needs or wants, and I have most of what I need or want.  We are, however, in need of a new tarp to cover our screen tent when we camp.  I guess you know you are beyond peak spending when a tarp is the top item on your need list, and you check the Menard and Farm and Fleet advertisements for tarp sales (or it is an idea of how boring our lives are).   Millennials have yet to reach peak spending.  The gen X'rs, that small group stuck between the boomers and the boomer echo (aka Millenials), essentially lack a large demographic to makeup for the boomers is what is affecting growth.  Harry Dent is now predicting a recession for 2017, so pity the poor president who becomes victim to the Dent's predicted demographic headwinds.  If you click here you can see a link to an interactive website which predicts the spending wave of growth and decline for most countries in the world.  this web site has the next growth period starting in nine years, 2025. (Take a close look at Italy, and recall from my prior post its inverted demographic pyramid and how long its period of decline is.)

Spending bublles on a web site which would seem to show peak
spending being between 50 and 54 (ixicorp.com)

I suspect I was married rather late for a boomer and hence our children were born near the end of the echo boom, so we may not have had our peak spending years between 45 and 49. We are probably a disdain for an economist like Harry Dent, we did not move up in housing as our kids entered their teen years (as he said is a common occurrence), nor have we ever had cable television, much less a satellite dish. We keep our vehicles until near death they do us part.  We also never bought some big adult toys, like a motor boat, camper or Harley; although as I age sometimes sleeping off the ground when camping in a rainstorm starts to sound pretty good.   Yet, we have computers, tablets, and my wife now even has a smartphone. Spending occurs, but as empty nesters it is now less than before--just as Harry Dent would predict. The end of our peak earning years is upon us as we look forward to retirement. Mr. Short, writing in 2012, noted that:

many analysts often think of retiring boomers as the primary drag on the economy with their transformation for the accumulation to the decumulation phase of their life-cycle, but if we understand the crucial role of consumption for our economic health (about 70% of GDP), a significant decline in the number of peak spends is a demographic headwind that will challenge us for years to come.

 Baby Boomers have been blamed for the down turn in spending.  Why would someone even think you need to keep spending as you once had?  If Boomers shoulder the blame for the downturn in spending, think what it will be like for entitlement programs, such as social security. Tune in for a later post on Boomer Blame, part 3.

Boomer Blame (part 1)

Historical novels have been written tracking a family through the centuries. When my children were in elementary school they had an assignment to place genealogical information in a time line of national and world events. We are all part of history, and that can make life interesting when we ponder some of the connections. For example, my siblings and I, along with our descendants,  fairly well track the course of the both the baby boom generation and boomer echo generation. The US Census Bureau has the baby boom beginning in 1946 and lasting to 1964. My oldest sibling was born in early January 1948 (close enough) and my youngest was born in 1964 (dead on). In 1957 the nation had set a record for the highest number of births, a record that would last for fifty years. When surpassed in 2007, it was not by much. 1957 is the year of my birth, and my parents did their part to make it the largest population cohort in US history (until 2007) by giving birth to twins. Of course, in 1957 the number of live births per 1,000 women of child-bearing age (15—44) was much higher at 122.9 than it was in 2007 when it was 69.3. This post will focus on demographic trends, and a later post will focus on economic linkage to demographics. Baby boomers have for years dominated American cultural trends, and in so doing they get credit or blame for the workings of the nation. The boomers are now entering retirement and the consumer, cultural and social clout is switching to their offspring.  This demographic movement is a first world problem.

Population Pyramids for 1964 with my family at that time
and one for 2005 with my wife and children

The free-love and peace events of the 1960’s began a series of cultural movements that are still on-going today. Perhaps the introduction of the pill in the mid 1960’s placed an end to the baby boom, but it was also related to demographics as the WWII generation (the parents of  the baby boomers) were nearing the end of their child bearing years. Some demographers have stated that with the rise of the pill, and other cultural shifts, children "lost" value in American society.  Not only was the number of births at a record low for much of the 1970's, but the abortion rate climbed sharply in the 1970’s.  The abortion rate would later decline by about half after the 1980’s. The same demographers say that children began to take on a renewed level of importance to young couples  in the 80's.  In the late 1980’s the live birth rate began to climb to near four million a year, and in taht decade would surpass the four million mark for the first time since 1964. The rise of the births in the 1980’s would lead to what is called the baby boom echo—children of us boomers, most of whom today are part of the millennial generation. Demographers seem to differ on the start date of the echo generation.  Some say it began in 1977, others say it began in 1982, while others say it was 1985. Whatever the start date, they all seem to concur that the end date was 1994.  As an aside, let me point out that it was just this year that the millenials overtook the Boomer generation as the largest in the nation.  This was due to two things--the increase in mortality among the boomers (of which our family has unfortunately been apart), and immigration which increased the number of millenials.

US Census pyramids for select years.  If you look closely you can see where some 2030 generations
 will be smaller than those in 2010, mainly generation X

Having been born near the middle of the boomer generation, but the last of my siblings to be married, my two children were born in 1991 and 1994.  For the overall children of my siblings there is one of generation X, born 1970, one born in 1982, and all others in 1985 or after.  Perhaps this shows why demographers do not know what date to  proclaim as the start date, as to my knowledge they never studied this family.  On the other end of the timeline, only one of my nieces and nephews was born after 1994.  The Hovel family is well connected to the baby boom and the echo boom.  Tracking the generations we can also see some of the common cultural dynamics attributed to the boomers and their offspring.

Not discussed, but an important factor is the
dependency ratio, fewer and fewer to support more and more

The echo boomers reflect dynamic changes that have occurred in American society. They were the first to grow up with computers, the first to have cell phones at a young age, they have made Facebook ubiquitous to where it is even used by their parents and grandparents. They saw the change in society from VHS tapes, to CD’s and now to streaming of movies and television shows. They own no landline for phone service. Can openers would be foreign to them, until the hipster resurgance of all things 50ish occurred. Think how record players and fifty-era furniture and styles are now in vogue. (I wonder if the fifty era revivial is brought on by boomers trying to gather items from their childhood, or if the things they grew up with are now thought of as cool.)  Of most interest to the echo generation is that they are often thought to be over-managed. They were driven to most all places they needed to go. For example in 1969 over 41% of 5 to 14 year olds walked or biked to school; that figure dropped to less than 13% in 2009.  It is rather ironic that their parents who came of age in the 1960’s and 1970’s, claiming independence from their parents and caused a major change in cultural values (e.g. pill, abortion, sex outside of marriage) were so overly protective of their children, producing what is now referred to as Helicopter parents.  Parents, it could be argued, knowing what they were like as children did not want their children getting involved in similar activities. I think of the "Everybody Loves Raymond" episode where it comes out that Debra pulled off her shirt, and bra during Mardi Gras, and wondered if it not best to lock her daughter up to make sure she did not do the same.   Let me say here, that not all of us boomers fit the common stereo-type of the boomer generation.  The boomers, overall (and not in everey case), grew up with more independence than they probably allowed their children, as can be gleaned from this earlier post.   At leat that is what all the experts assert.  Us boomers are often referred to as the "Me" generation, but if they were so protective of their children, was it less about them and more about their kids?

2014 Population Pyramid

Today, among the echo boomers, the nation is grappling with a fertility rate at or near record lows. Although, in absolute numbers total births are near that produced in the early years of the baby boom (1946—1953). For example, in 2015, the number of live births was just below 4 million, a value somewhat comparable to that in 1953. The US currently sees about 2.6 million deaths per year, which is lower than the birth rate, although demographers point out that deaths will increase with the aging of the baby boomer population. Child bearing is occurring later and later in life. For example, forty years ago women in their 20’s had 2.5 times the births of women in their early 30’s. However, today women in their 30’s have more children than those in their 20’s. It is probably a good thing though that births among 18 and 19 years old females is half of what it was as recently as the early 1990’s.  

Pyramid from the Atlantic article

These trends too can be seen in our family.  Of the 16 Hovel cousins (sons or daugthers of myself and siblings), three are married, and of the those three, only two have children. The generation X niece has two offspring, both born after the end of the boomer echo (1999 and 2004), and the next oldest, born in 1982 has one child.  Three others, who are at least thirty years of age are not married.  All ten female cousins fall within the census based age grouping for fertility (15 to 44); three of the females are married, with two having produced three children total among them.  I am not intending to make any judgements, only to point out how the family mirrors the demographic trends of the nation.  One thing the family has not mirrored, which in my mind is a good thing, is the national demographic trends of out of wedlock births.  All three of the grand niece and nephews were born to a wedded couple.  Today, and for several years now, around 40% of the births nationally have been to an unmarried mother.

Italy's Population Pyramid is becoming inverted

There is a certain irony that with the change in sexual mores of cohabitation, and births out of wedlock that the birth rate is near historic lows. However, largest population cohort in the nation is the 24 to 25 year old age group who are have recently entered the work force and establishing themselves in their careers.  At some point, if current trends continue, they will marry and have children in their 30's.  

Japan's Pyramid

Population cohorts are critical to the vibrancy of a nation. Demographers use population pyramids to visually show the demographic makeup of a nation. Historically, the population pyramid was, well a pyramid. But, today the one for the US is forming the shape of a population box.  The Pew Research Center has noted as much, of which the Atlantic based on article on that research; The Atlantic has a web site that one can track the change from a pyramid to a projected box in 2060.  [Scroll to middle image of the prior link to see the moving pyramid over time.]  However, we do not need to wait to 2060 to see the forming of the box, as I said, it is starting to form at present time.  A box, however, is better than an inverted pyramid that is being seen by some other developed countries.  To me the population box, along with an inverted pyramid, is indicative of a post-modern world with minimal growth.  A first world problem.  Given this, expectations of growth as seen since the end of WWII will likely not be experienced, even with changes in technology.  Births in the US and many European nations is well below the 2.1 births per woman (aka fertility rate) required for replacement, except for many immigrants.  If Europe seems different now, wait 25 to 30 years when there will be few Italians, and Spaniards.  (The CIA Factbook identifies the current Italian fertility rate to be a very low 1.47.  It identifies the birth rate at 8.74 births/1000, and the death rate at 10.19/1000 persons.)  Thye are not even replacing themselves.  The 2015 US fertility rate was 1.87.

Why does all this matter? it is really quite simple.  Growth of the first world has been essentially driven by the baby boom generation  from spending by their parents to their spending on their children.  Boomers are now nearing retirement and their peak spending yeras are in the past.  It was their wealth that drove the nation to new economic levels. In driving up first world economies, it also aided many second and third world economies (think overseas production of goods, even if it is a sweatshop). Economies depend upon growth and growth is dependent on more than spending, it is it also dependent upon people.  The US is a very wealthy nation, it is just that over the past several years wealth has become more and more concentrated in the hands of a few--the top 1 and 10%, if you will.  The average citizen has seen more or less stagnant wages as globalization had reduced that part of the population to the lowest common denominator.   A one percenter only needs so many homes, and can buy only so many items. A radio ad for workers at Stoughton Trailer promises a salary of up to $17/per hour for assembly line workers, or a annual salary of just over $35,000 per year.  Demographics is part of what has driven the growth of the nation.  Of course their are other factors as well, but some argue non as strong as pure demographics.  A future post will talk about the relationship between demography and the nation's economic health.