Demographics and economics - the explanation for everything

[SC Maintenance]

I have commented on this multiple times here, but this graphic shows things on one picture.

These are demographic pyramids of the USA. Each bar represents a 5 year cohort by age. The wider the bar, the more people that age. There called pyramids because that is what there supposed to be - more babies than old people.

Note the first one of 2000. Notice the big bulge of 35 to 44 year old. It was the largest group ever in US history. Remember the roaring economy of the early 2000's? That is these people, buying houses, cars, braces, tuition. Good times.

The second pyramid was 2010 - right after the Great Financial crisis. Note that group has now moved to 45-54. What do people do then? They stop buying braces and tuition and pour money into retirement savings. Remember the grand stock market run up from 2010 till now. Thats these people, handing there hard earned money to the likes of Vanguard who dumped it into mindless indexed funds, pushing markets forever higher. High government spending also fueled the rally.

Now look at the last one. 2020. Note the bulge is now 55-64. What do you do then. You soon stop putting money into the stock market. Your sure not buying braces unless its your grand children's. You likely spend less.

So consumer spending falls (the driver of the economy). Cheap capital may also fall, as these people are less interested in taking risks with their money. AI and robots can't replace it. Its not really a labor shortage, its a spending and investment shortage.

And its just getting started.

It may look like there is enough population lower on the chart to offset - but its comparatively not as big as the total population was for the boomers in 2000, and its also at least 10 years away from tuition and braces. Household formation is also much lower, so even then, much lower need for tuition and braces.

So if you wonder why everyone is so on edge and everything seems so messed up, it is. But its not this or that current policy or leader. Its this chart. At the highest level, this explains just about everything.

And its happening on a global scale, except many countries are far worse off. They had the baby boomers, but the bottom of the chart is much smaller.

Source - (https://pbs.twimg.com/media/GkBpWSIWIAETJ10?format=jpg&name=4096x4096)

 

[KrisZ]

It’s quite simple really, couples don’t want to have children. Most of the developed countries are far below the replacement birth rates. Can’t have a thriving society/economy without people.

 

[SC Maintenance]

Some more - to put this in perspective. Sourced from www.populationpyramid.net First an almost normal population pyramid - Mexico. Notice however how the very bottom is starting to narrow. There starting to industrialize. They will suffer the same fate - they just have a long time before it happens.

Canada. They have propped up there population with massive immigration for 30 years. So far its working, but they must maintain the cycle to survive, because the new immigrants don't have children either.

China. There generally hosed. Not only do they not have enough children, they don't have enough adults to have children if they wanted to. They have no immigration - everyone wants to leave. Also, these are official numbers. Many demographers say these are already manipulated by the CCP and its far worse. There is also the issue that the one child policy left a surplus of men and few women.

 

[KrisZ]

China is royally screwed. Why people insist they are the next investment frontier and future driver of tech is beyond me. They are literally at the brink of demographic and economic collapse.

 

[ripcord]

I sat through a lecture by a demographer and he said in every country studied, the best predictor of the number of children a country is having are polls of women asking about how many kids they want to have. They all track pretty closely. He also said that the US is near the top of industrialized countries in terms of maintaining replacement rates.

He also predicted that if things don't change, countries like South Korea will lose 95% of their population over the next 100 years with many other low birth rate countries close behind.

It's pretty clear that a combination of reduced family formation, birth control and probably government old age welfare programs all contribute to this looming population crash.

It's all sort of like watching the Titanic go down. There's not much that can be done about it.

 

[gfh77665]

Something else to worry about.

Thanks!

 

[SC Maintenance]

Something else to worry about.

Thanks!

No point in worrying about something you can't control.

However I have found studying it not only interesting, but useful in explaining the world around me and why certain things are happening. It can help with important choices, like where to live, careers, investing, etc.

 

[SC Maintenance]

I sat through a lecture by a demographer and he said in every country studied, the best predictor of the number of children a country is having are polls of women asking about how many kids they want to have. They all track pretty closely. He also said that the US is near the top of industrialized countries in terms of maintaining replacement rates.

He also predicted that if things don't change, countries like South Korea will lose 95% of their population over the next 100 years with many other low birth rate countries close behind.

It's pretty clear that a combination of reduced family formation, birth control and probably government old age welfare programs all contribute to this looming population crash.

It's all sort of like watching the Titanic go down. There's not much that can be done about it.

Seems to be a repetitive pattern. The demographers say it has a lot to do with industrialization, but if you look even at places like Cuba, which is not particularly industrialized, they have terrible demographics also.

South Korea is an unmitigated disaster. I think there birth rate is well under 1. Without massive immmigration there population will likely halve in 30 years or so.

Japan and of course China - pretty much as bad.

 

[gfh77665]

I am not worried a bit. I was speaking in a general sense for all who read. That, and it being compared to the Titanic. So much negativity in the world. I just wish more people would relax and enjoy the blessings of life like I do, instead of concerning themselves with stuff like this. I woudn't trade my life of anyone elses on earth.

 

[350Rocket]

I am not worried a bit. I was speaking in a general sense for all who read. That, and it being compared to the Titanic. So much negativity in the world. I just wish more people would relax and enjoy the blessings of life like I do, instead of concerning themselves with stuff like this. I woudn't trade my life of anyone elses on earth.

I think people in north America have good reasons to pay attention to what's going on right now. I know a lot of people don't want to know and would rather just ignore it but things can really creep up fast.

 

[Pew]

I think people in north America have good reasons to pay attention to what's going on right now. I know a lot of people don't want to know and would rather just ignore it but things can really creep up fast.

Indeed, if we're to follow the population trend that SK and Japan is following, the younger generations are in for a rough time.

 

[gfh77665]

Well, BITOG posters can fix it. Problem solved.

 

[ripcord]

Well, BITOG posters can fix it. Problem solved.

I think most of us around here are well past that stage of life

 

[Vercingetorix]

This population decline has never happened before. Trying to predict the future is a fools errand. It still remember learning about The Malthusian Theory. I was supposed to have starved to death by now.

 

[cptbarkey]

Having a child is increasingly unaffordable in the United States. We stopped at 3 whereas my father had 9 peer siblings, of which 3 lived past 60. Don’t get kicked in the head by a horse or use leaded gasoline.

 

[SC Maintenance]

This population decline has never happened before. Trying to predict the future is a fools errand. It still remember learning about The Malthusian Theory. I was supposed to have starved to death by now.

The malthusian thing was a complete theory. This is happening in real time, and you can see it in numbers, and in actions in places like Japan.

Your correct in that we can't predict the future or the outcome, but the symptoms are obvios.

 

[GMFan]

As someone with two young kids today I understand why birth rates are down. Daycare for 2 kids would cost $35k/yr. Doesn’t make sense for both parents to work so one income it is for the household. DINKs (dual income no kids) can buy big brand new houses that people with families simply can’t right now. It’s a sacrifice not many want to make. This is where we are at - we love our kids though and wouldn’t trade them.

 

[Hohn]

We homeschooled our kids and my wife stayed at home to do so. She gave up her teaching career to teach at home for no pay. Unfortunately due to her health issues we had fewer children than we’d hoped. Thankfully, the rest of our acquaintances in the homeschool community are well above replacement population in their contributions

@SC Maintenance do you follow Peter Zeihan at all? He’s one who has a lot of material on demographics and the role it plays.

I think the collapse in population is fascinating because of the effect it will have on the future. While I find the subject fascinating, it seems necessary to invoke political themes in the discussion of it, so I’ll be unable to express what I might in another context.

 

[KrisZ]

From what I see, pets have largely replace children. Vets are doing great now, but they will be doing even better in the near future IMO.

 

[Torrid]

As someone with two young kids today I understand why birth rates are down. Daycare for 2 kids would cost $35k/yr. Doesn’t make sense for both parents to work so one income it is for the household. DINKs (dual income no kids) can buy big brand new houses that people with families simply can’t right now. It’s a sacrifice not many want to make. This is where we are at - we love our kids though and wouldn’t trade them.

Well put. We only had two. Eventually I upped my income where my wife could stay home. She worked part time off and on before that after our second was born.

Maybe we would have had more if these stages happened earlier in life. I can’t say for sure. Cost definitely steered the ship though.