Friday, January 21, 2011
I saw this chart the other day and it struck me as both persausive and terrifying. Japan has been stagnant for twenty years, with cratering real estate prices and a birthrate below replacement. America's trends are following a similar path. With a housing bubble already bursting, and the percentage of working age population dropping, who will buy my house in fifteen or twenty years? And at what price? Yikes.
Demographics matter. Is there a connection between America's economic growth and its birthrate? There certainly is one in Europe, which has stagnated for years, and which now doesn't have enough youth to work to pay for the retirement benefits promised to European elderly. A story like the one from a few weeks ago that New York City's abortion rate is 41% is appalling from a moral perspective. But it's also alarming from an economic perspective.... who exactly is going to be around to pay for the City's retired sanitation workers and school administrators and cops and firefighters in their very well-paid dotage?
The chart above looks more and more like a country driving itself off a cliff.