Posted on 03/22/2005 7:07:05 PM PST by cp124
The developed world is on the brink of the greatest demographic change in its history, and America's standard of living will decrease by almost one-third by the middle of this century, according to a new study released by the National Center for Policy Analysis (NCPA).
The report adds that over the next 30 years, the number of elderly in the United States, the European Union and Japan will more than double, while the number of workers available to pay the elderly their government-promised benefits will rise by less than 10%.
That will require large tax increases – the payroll tax will have to climb to 23 percent over the next 30 years, while the average income tax on wages will rise from 10 to 14 percent.
The study estimates the total tax on wages will rise to 38 percent by 2030 and to 40 percent by mid-century.
Higher taxes mean lower after-tax income for workers. Less disposable income means less saving – and less saving means less capital formation. That will lead to lower labor productivity, which will mean lower real wages.
According to the study's coauthor, Laurence Kotlikoff, an economist and senior fellow with the NCPA, an economy that is short of capital would usually turn to international capital markets. But because the capital shortage in Europe and Japan will be even more severe, the two regions are likely to bid capital away from the United States.
Reforms to U.S. entitlement programs – which rely on increased saving as opposed to pay-as-you-go financing – offer hope, says Kotlikoff.
What happened to all the young people? /sarcasm off
Oh, good. That's a nice picture.
Forty four million dead babies would have paid for a lot of stuff when they grew up and went to work. The boomers have killed half of the following generation - what comes around goes around.
I remember reading predictions like this thirty and more years ago.
You've just ID'd why our politicians need a seive at the southern border...rather than a wall.
Yeah, well, you know how it is. There's only so much wealth in the world and it remains constant. Can't grow. Hmmm... but it can shrink? /sarcasm
Succinctly spoken.
Well, yeah, if we convert to socialism, our standard of living will nosedive. But I think the assumption that the government will have to support the elderly in the future may be incorrect.
If Congress could keep it's sticky hands off the budget and only spend what is actually called for in the Constitution, in which I don't remember billions and billions going out to buy friends and world wide charity; cut off the illegal welfare, that would go a long, long way to keep us afloat. If we produced our own oil, that would help. There are many many ways each of us could help. Electing new faces in congress would probably be the biggest help of all!!
Malthus
This is the main advantage of a tax-paying immigration system. Be a good citizen.
Dr. Kevorkian will be appointed to head Soc. Security Administration and he will surely straighten the things up in a short order.
This is based on the extremely dubious assumption that we will do nothing at all to change current policies.
The political tide is turning as a larger and larger segment of the voting population consists of those who are being ripped off by SS rather than those who are doing the ripping off.
A worthwhile project would be to replace those 44 million babies inside of a generation. Get busy y'all.
I am convinced that beginning in 2010 there will be massive number of immigrants from Europe, mostly young people who are tired of having no future. You heard it here first.
Heck when Reagan was President every day I heard stories like this... Of course when the slickster was Pres, everything was wonderful!!
Anyone "Got It"?
When I look at the ever larger numbers of poorly educated kids our schools are churning out, I wonder whether there will be enough decent wage earning people to support social security. They've said that soon there will only be 2 workers for every retiree, but they haven't said much about the earning capacity of those 2 workers.
When you consider that we've rarely ever seen tax increases on the poor, you have to know where the increased revenues are going to come from.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.