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Predictions of economic chaos as baby boomers grow old are based on formulas that are just plain wrong

The American Scholar The Fear Factor Lincoln Caplan


The dependency ratio is only occasionally mentioned in debates about public policy, but its premise—that the growth in the ratio indicates how greatly baby boomers will burden the rest of society—is shaping some of the most consequential debates in the United States today: about the size of the federal government, about how government expenditures should be allocated, and about the nation’s financial viability in the next generation.

A demographic tool has become an economic one, treating a demographic challenge as both an economic crisis and a basis for pessimism justifying drastic reductions in bedrock government programs, including those supporting children and the poor. Even at state and local levels, the aging boomer demographic is repeatedly blamed for our economic difficulties. That is a lamentable mistake. The United States has serious economic problems, and the aging population poses significant challenges, but those challenges are not the main cause of the problems. They should not be treated that way.

The dependency ratio does not justify the solutions that the alarmists propose. Just as important, perhaps, it fails to account for the striking benefits accruing from the dramatic increase in life expectancy in the United States during the 20th century—what the MacArthur Foundation’s Research Network on an Aging Society called “one of the greatest cultural and scientific advances in our history.”

Stashed in: Thank God, America!, Aging, Aging

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The retiring Boomers represent a huge opportunity, if we can figure out how to employ them to bring about good change. 

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