What is the world is happening to the economy? Production is down in many sectors, and with the recession it is going to be very difficult for these businesses to recover back to their original output. President Obama has about as much idea of what he's doing as a two-year-old in a supercomputer. Nobody is holding their breath for real stimulus from the government end. Obama continues to blame Bush for the entire mess, and conservatives then blame Clinton, who blames Bush Sr, etc. It seems the only thing that we as Americans have learned from this economic orgy is the ability to blame others for our mistakes. However, when this nation begins to pull out of the recessional hole, there is a major problem that will be staring us right in the face.

An interesting study to consider is the demographics behind the economy. Many economists will grant that the economic sector is heavily influenced by the social realm. In fact, if we consider that society is just a large section of people, we can say that economics are completely influenced by society. Without people, the dismal science wouldn't exist.

So, what does this have to do with anything? Well, let's look at what was going on in the demographics before this "recession" hit us. Looking strictly from a productive standpoint, the best years of a human's life are roughly between 40 and 55 years old. This is the time when workers are old enough to have enough experience to be knowledgeable about their jobs, but not too old that their backs and knees are blowing out. If we take the median of this age range, we get a number roughly around 48 years old.

Right now, much of the work force is still from the baby boom era. The acknowledged peak of the fertility rates of the boomers, at least from what I could find, was 1961. Now, here's the interesting stuff. If you add those 48 years onto the peak year of the boomer generation, you get the year 2009. This means that roughly around 2009 will be the most productive year for the boomer generation.

Since 1950, fertility rates have been cut in half. This means that there are half as many children per woman today as there were in 1950. The rise of contraceptives has helped to further this end along with the 50 million US children that have been killed through abortion. Along with the social image that children are unwanted nuisances, society has successfully burdened its older generation by not providing a younger one. China also has this problem due to their one-child rule. The irony is they are laughing as they fund our stimulus, completely unaware that they suffer from the same disease.
So, economically, how does this affect us? Well, the disaster we call social security is probably the greatest problem that is born out of the demographic degradation. However, apart from the SS monster, we also have the problem of the production sector of America gathering dust after the boomer generation checks out to hop on the welfare train before it de-rails. If a business has to let 10 boomers go, yet it can only hire 5 more workers, the output of that company will decrease unless labor-reducing technology is found. Thus, for many small-businesses in America, this demographic shift is a major problem that needs to be addressed.

Now, I know that the fertility rates did not cause the recession. This came about because the blindness of our own legislature in dealing with the housing market (the often stupidity of our lawmakers never ceases to surprise). However, within 50 years our population is expected to begin decreasing instead of growing. This is a problem. No wonder Social Security is expected to exceed the entire current federal budget within 50-75 years. When you don't have enough youngsters to pay for the geezers, problems happen. Within 20-50 years, things are going to get mighty interesting in the economic world. Malthus wasn't correct, but, ironically, his conclusions had the same effect-- even if indirectly.


-Cheers