The last time our population grew more slowly than it did the past decade was the decade following 1930, the slowest rate of growth since the Census Bureau began studying our population in 1790. While the Left may lament this as evidence of a lack of immigration and the Right may claim it proves we have a birthrate problem within our borders, there’s no question that this is a problem much greater than partisan politics.
Most crucially, our slowing population growth threatens to turn our impending national debt into an outright disaster.
The primary drivers behind our exploding deficit are Social Security and our federal healthcare spending, most significantly Medicare. Our debt-to-GDP ratio is already the highest since World War II, and by 2051, the nonpartisan Congressional Budget Office estimates that our annual national debt will be twice as large as our gross domestic product. By then, our annual spending on interest on our national debt will eat up 9% of our annual economic output.
And this is why this is a problem. If you don’t have more workers contributing tax revenue & creating economic growth as Baby Boomers go on Social Security & Medicare, we have a crisis. https://t.co/J3tbGjNpjA pic.twitter.com/7CaBdDH2X4
— Tiana Lowe (@TianaTheFirst) April 26, 2021
Monetary doves aren’t wrong that we can afford for a while to take on more debt while interest rates remain near zero. Still, caution is needed. It’s already evident that a decade of unusually low interest rates, economic growth hampered by coronavirus-era lockdowns, and a bipartisan federal spending spree have created a perfect storm for the sort of inflation that wipes out savings and purchasing power and drives out the investment required for economic growth.
Absent the sorely needed reform to Social Security, explicitly a Ponzi scheme, and the fraud that is Medicare, taming our national debt requires some combination of an above replacement birth rate and more immigration. Unfortunately, we’re trending in reverse.
In 1960, Social Security relied on five workers for every single beneficiary. For the next few decades, there were just three workers for every beneficiary. By 2010, there were fewer than three workers per recipient, and by the time the program is projected to become insolvent in 2035, we’ll rely on a mere 2.3 workers per beneficiary. Given that Social Security and Medicare are both generational wealth transfers, we have two options to fund it given our current reality: Tax our existing working population even more than we already do, or increase the working population. Otherwise, we will reach a point at which we cannot pay off our interest, which would create a cataclysmic credit crisis.
Of course, we could always slow the spending by enacting the sort of bipartisan reform that would prevent this problem in the future, but until then, we need more workers contributing to our economic output and our tax revenue.
