Demographic Time Bomb: US Population On Track To Start Shrinking By 2035 | Chris Hamilton
Feb 15, 2024
auto_awesome
Chris Hamilton, publisher of Econimica, talks about the significant impact of demographic trends on various aspects including energy consumption, finance, economy, and housing. He highlights the worrying prediction that the US population is set to start shrinking by 2035 for the first time ever. The podcast explores the consequences of this trend on labor force participation, national debt, housing affordability, and the need for a debate on serving long-term interests versus free markets. It also discusses the importance of data analysis and learning from international perspectives to address these challenges.
The US population is projected to start shrinking by 2035 due to declining birth rates and an aging population, posing economic challenges.
Immigration has been suggested as a potential solution to offset the decline in the native-born population, but effective policies must consider integration, economic contributions, and culture.
The US is facing challenges related to high levels of debt growth and a declining working-age population, calling for a comprehensive approach to address fiscal and demographic concerns.
Deep dives
Declining working-age population driving economic challenges
The working-age population in the US is in decline, leading to economic challenges. The employment population ratio among the 25 to 54-year-old cohort has been decreasing since 2000, coinciding with recessionary periods. As the population shifts towards older age groups, the potential for employee growth diminishes. This decline in the working-age population has had negative effects on families, with a decline of 4 million families with children since 2007. The issue is further compounded by the rise in housing units compared to the decline in families with children, resulting in an affordability crisis and a concentration of housing ownership among those with higher income and assets.
Immigration as a potential solution for population decline
In the face of declining birth rates and an aging population, immigration has been suggested as a potential solution to address population decline in the US. High levels of immigration, especially among younger individuals, could offset the decline in the native-born population. However, effective immigration policies that take into account factors such as integration, economic contributions, and culture are necessary. The discussion around immigration should focus on determining the optimal number and type of immigrants that can help mitigate population decline and promote economic growth.
The implications of debt growth and demographics
The US faces challenges relating to high levels of debt growth and changing demographics. The growth of federal debt has outpaced GDP growth since 2008, leading to concerns about the sustainability of the debt burden. Demographically, the US is experiencing a decline in the working-age population, which is essential for economic growth. The decline in population growth, particularly among the native-born population, has contributed to challenges in maintaining economic growth and workforce productivity. Furthermore, the rise in debt-funded stimulus measures in response to economic downturns has resulted in diminishing returns. These challenges call for a comprehensive approach that addresses both fiscal and demographic concerns.
The impact of demographic shifts on housing and families
Demographic shifts, including declining birth rates and changing family structures, have had significant implications for housing and families in the US. The decline in the number of families with children since 2007, coupled with the increase in housing units, has resulted in affordability challenges and a concentration of housing ownership among those with higher income and assets. This trend raises questions about housing policies and the distribution of resources, as families struggle to find affordable housing while a significant amount of housing remains unoccupied or owned for investment purposes. Addressing these challenges requires a reevaluation of housing policies to ensure access to affordable housing for all families.
The impact of declining births and population growth
The podcast episode explores the significant implications of declining birth rates and population growth on the economy and society. It highlights the alarming trend of decreasing births and the resulting impact on the working-age population, economic growth, and future prospects. The data presented shows a decline in fertility rates, a collapse in the livability of cost of living, and a growing imbalance between the elder and younger generations. This demographic shift has far-reaching consequences that demand attention and discussion to find suitable solutions.
Challenges in housing and economic growth
The podcast episode also discusses the challenges in the housing market and their impact on the economy. It emphasizes the need to understand the relationship between housing inventory, population growth, and economic well-being. The charts and data presented reveal a record high housing per capita, indicating potential overbuilding. The conversation prompts a deeper consideration of the consequences of these trends and the urgency to prepare for a potential recession, given the limited fuel for further economic growth.
Narrative drives so much of the thinking today, especially when it comes to the markets.
To prevent becoming unduly influenced by it, it's important to ground ourselves in data.
We should ask first: what is the data saying?
And then we can judge whether the current prevailing narratives are consistent with it.
So, what is the current data telling us?
To find out, we're fortunate to speak today with Chris Hamilton, publisher of Econimica. If you're not familiar with the name, I'm confident you've come across a number of the prodigious amount of charts it publishes across a wide range of macro topics like the economy, demographics & the housing market.
And the one he's most worried about? Demographics.
The USA's population is set to start shrinking for the first time ever by 2035. That's just a little more than 10 years away.
Follow Chris at https://econimica.blogspot.com/
Or on Twitter at @Econimica
WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.com
#population #demographics #immigration
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode