Demographics of Aging Population

JayHecht at aol.com JayHecht at aol.com
Mon Nov 30 11:10:20 PST 1998


In a message dated 98-11-28 18:55:30 EST, you write:

<<

Sorry, but you are simply wrong. The classic pattern

of the demographic transition is for the death rate to drop

first, thus increasing the numbers of the elderly, and then

for the birth rate to drop later. That has held true in

pretty much every nation in the world. I am not aware of

any exceptions to that generalization (although there are

some where the birth rate has yet to decline, and others

where the death rate has gone back up again either due to

wars or AIDS epidemics). >>

Here's my take w.r.t. funding soc sec:

There have been several "dynamics" at work so that the original actuarial assumptions behind SS have had to be modified:

1) Increased life expectancy + increased real cost of living has to increase the "pure cost" of the annuity. Thus, those longer-lived workers who did not bear the full actuarial cost of the program (and are still alive today) need some sort of subsidy.

2) Slower economic growth (1973-1996?) has also hurt the funding, but I'm not sure this is really a problem.

3) The "baby bust" (1965-1982) has created a potential problem - not all workers born 1946-1964 had as many kids as the pre-boomers. Thus, the potential imbalance in workers/retirees

4) We could EASILY afford the soc sec system if we taxed every god damn $ of UNEARNED income at something like 2-3%

Jason



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