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Recognition of the real population problem

April 23rd, 2012

by Marcus Roberts

Another mainstream newspaper from the UK, this time the Telegraph, has put the problem of an ageing, declining population into the spotlight.  A couple of weeks ago the NYTimes and the Guardian did the same thing, so hopefully we will see more and more of this type of story in the MSM.  This is good as it will help to balance the zeitgeist that the only population story out there is one of overpopulation doom and gloom. 

Daniel Knowles’ article very clearly does not fit in with this story. His headline gives you a clear indication that he is going to beat a drum that is very familiar to readers of this blog: “If the birthrate falls again, we’re in serious trouble”.

After dealing in the first paragraph with the predictions in the 1960s of Paul Ehrlich (that humanity would be starving to death in the 1980s) quite succinctly – “almost nothing that he predicted has come to pass” – Knowles then goes on to outline the developed world’s real problem: population ageing.   The world is getting older as we live longer and have fewer children.  An elderly population is expensive in social-welfare heavy states and there will be fewer of us to shoulder the tax burden:

“…the problem with ageing populations is that they are expensive. All of these countries provide tax breaks, benefits, pensions and so on to the elderly, and they all subsidise healthcare one way or another. As we report this morning, in the United Kingdom, rising life expectancy could eventually add another £750 billion to the national debt through the cost of pensions alone. Add the extra 5 per cent of GDP that the Office for Budget Responsibility says we’ll have to spend on healthcare, and suddenly you can see why we’re stuck on what my colleague Benedict Brogan calls the ‘great tax escalator’.”

However, Knowles mentions that in Britain, the outlook isn’t as bad as Germany and Italy as the British birthrate has actually increased over the last 15 years or so.  This, he says, is partly due to Governmental policies that made it cheaper for people to have children.  Now that austerity measures are coming into effect, it is becoming more expensive to have children:

“…[a]s the Institute for Fiscal Studies found in a study for Ed Balls, the average family will be £500 worse off as a result of the Chancellor’s changes to the tax and benefits systems. For people on low-to-middle incomes, having children is now a lot more expensive than it was.

And what if the result is that people of my generation stop having children? Combined with a squeeze in immigration, the result could well be that the total fertility rate, which has been rising for a decade, may begin falling. If that happens, then our long-term fiscal prospects would get a lot more bleak. Has the Chancellor, in attempting to cut the national debt, actually made it just a little less sustainable?”

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