2023-08-02 17:13:48
Two alarming articles from the New York Times and the Wall Street Journal show that the demographic crisis is increasingly affecting the economy and is practically turning the old continent into a large hospice house. Are we doomed to extinction? They are getting older and poorer. If the fate of Europeans is written in the numbers of population and economic growth, then we are surely doomed to extinction. The self-destruction, well documented in two lengthy surveys published in the New York Times and the Wall Street Journal, confirms what the statistical offices of European countries already know: fewer and fewer children are being born, while more and more old people are born. Aging is expected to worsen in the coming years, which will have a negative impact on the growth rate of GDP per capita. The baby-boom generations of the 1960s have essentially left the traditional reproductive age group of 15-49 years. This is the transition that, together with the lengthening of life and the falling birth rate, is the fundamental determinant of the mass demographic aging that we will witness in the next thirty years, which will have a significant impact not only on a social level, but also on the growth potential of the economy. Europe, China and the United States are aging While we wait for Hungary to try to solve the population decline in its own way, it is worth reading the long analysis of the New York Times, which points to the rapid decline of the West, where the number of people of working age is doomed to decline rapidly, while the world in other, especially poor parts, this number is increasing. “Europe is shrinking. China is shrinking, the much younger India will overtake it as the world’s most populous country this year. But what we’ve seen so far is just the beginning. The predictions are reliable: by 2050, people aged 65 and over will make up nearly 40 percent of the population in East Asia and parts of Europe. An enormous number of pensioners will depend on the declining number of people of working age. No country in history has ever been as old as these nations are expected to be. It is impossible to pretend that nothing has happened: pension systems and immigration policies, for example, will have to be reviewed, which will have a huge impact on the economy and society, and the richest and therefore geopolitically strongest countries today will almost inevitably represent a smaller proportion of global GDP -in. With what consequences? In Europe, the United States and China, the number of people of working age has been very high for decades, which has contributed to their economic growth. Today, however, they are getting older, and according to UN forecasts, the most balanced workforce will primarily be in South and Southeast Asia, Africa and the Middle East. Demographics Reshape Geopolitics This shift might reshape economic growth and geopolitical power. The list of countries with the highest proportion of the working-age population in 2050 does not include those that ranked first in 1990, including Japan, Italy, Germany, France, the United Kingdom, the United States and China. For countries with growing young populations, the question will be whether they will be able to take advantage of this opportunity. Europe is entering a dramatic phase, as the numbers of the Wall Street Journal survey say: “Europeans are getting poorer and living worse”. The conservative American newspaper explains that “the aging population is preparing for economic stagnation”. “The French eat less foie gras and drink less red wine. Spaniards are consuming less and less olive oil. Finns are encouraged to take saunas on windy days when energy is cheaper. Across Germany, meat and dairy consumption have fallen to their lowest levels in three decades, and the once-booming organic food market has collapsed. Italy’s economic development minister, Adolfo Urso, called an emergency meeting in May over the prices of the country’s favorite food, pasta, following they rose to more than twice the national inflation rate. A free fall in consumer spending sent Europe into recession earlier this year, reinforcing the sense of relative economic, political and military decline already evident at the turn of the millennium”. Why are we where we are? One might fill pages regarding why we got to this point. The older generation blames the young, who, in their opinion, have selfishly chosen a comfortable lifestyle without problems and challenges. However, the problem is much more complex than that. Misguided decisions by governments, runaway inflation, low wages, brutally high taxes, increased costs of raising children, and uncertainty have forced the younger generation to think twice regarding how to start a family. Economic forecasts are often less reliable than a horoscope, and a continent in crisis like Europe is unlikely to find the strength and opportunity to start growing once more, especially if the population continues to age at this rate.
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#doomed #extinction