The Demographic Cliff

A plunge in births to immigrant women led the charge to a new low in US birthrates. Tyler Cowen says that this is the real fiscal cliff, but what I think is important is to see that there's nothing particularly "fiscal" about it. Since we do have some important federal programs in place to transfer economic resources from working age people to elderly people, demographic shift translates into a budget issue. But this isn't an accounting problem. It's an actual problem of the quantity of human beings around and what they're doing. If a very large share of the population is elderly and in need of care, then either those elderly people will have a very low standard of living (thanks to an inadequate number of caregivers) or else a very large share of the working age population will need to be taking care of elderly people. There are also implications for savings. Your savings ju...