"Things will get better."
Such sentiments frequently fall from the lips of ever-loving economic optimists who -- while noting the current distressed condition of things -- nonetheless insist that recessions have come before, and have always been followed (eventually) by recoveries. I know a few of these optimists, and they’re quite right -- to a point.
Because what these sunny souls forget is that every recovery depends upon a plentiful supply of Earth’s most precious resource -- human beings. And it is a resource that is becoming increasingly scarce, especially in the industrialized democracies.
Until recently, the United States was famous for bucking the plummeting birth-rate trend that has haunted other advanced countries for years. But apparently Americans are now caving to the peer pressure (“Come on, Yanks! Everyone’s -- not -- doing it!”). According to a recent report in newgeography.com:
“…the 2010 Census showed that in the past decade America’s birthrate slipped below at least one European country (France) and under the pace necessary to replace our current population.”
Never mind, you say, immigration can make up the difference, right? Maybe not:
“Immigration, both legal and illegal, is also slowing, in part due to plunging birthrates in Mexico and other Latin American countries.”
True, the dip in birth rate has a lot to do with the recession: Young people burdened with high credit card and student loan debt and faced with dismal employment prospects are understandably choosing to put off marriage and childbirth. But that creates a dangerous and self-reinforcing loop -- bad economies encourage bad demography, which weakens the economy further, etc. They don’t call it a death spiral for nothing. Again from newgeography.com:
“…we need an increase in younger, working-age people to make up for our soon to be soaring population of retirees. Young people are the raw capital of the information age and innovation, and new families are its ballast and growth market.”
As governments across the developed world face shrinking, aging populations, already onerous entitlement promises become bonafide budget killers, leaving politicians without the stomach to reform or repeal entitlements (read: most politicians) with one choice -- raise taxes. Indeed, it’s already happening: Japan, which unhappily is well ahead of the curve in the downward death-spiral race, this summer approved a plan to double its national sales tax in a desperate attempt to shore up its finances. Unfortunately, it won’t be enough. As The Wall Street Journal reports:
“The tax increase…will slow the rate of issuance of Japanese government bonds. But the new revenue will quickly get consumed by projected growth in retirement-program spending for the country's rapidly growing population of seniors.”
In many respects, Japan is the canary in the coal mine for all of Western Civilization. In 2007, for the first time (excepting World War II), the number of deaths was larger than the number of births in what has been aptly rechristened “Land of the Setting Sun.” High debt, low growth and no babies equals a one way ticket to the ash heap of history. Once a people can no longer see a bright future past the mountain of debt in front of them, they lose all interest in fecundity. And when they can’t conceive (see what I did there?) of babies in their future, they quite naturally lose interest in each other:
“Among [Japanese] males 16 to 19 year old, 36% have no interest in sex, and some even despise it. The figure is even higher (59%) for females in the same age category. These respondents often cite greater interest in comics, computer games and socialising through the internet.”
Indeed, so unappealing has sex and procreation become in Japan that adult diapers sell more than the baby kind.
The dangers of low fertility have long been understood. In the last years of the last millennium B.C., the Emperor Augustus fretted that Roman citizens -- especially the elites that made up the senatorial and equestrian classes -- were too busy enjoying their own lives to make new ones. Augustus correctly understood that Rome would need legions of soldiers and bureaucrats to administer its recently codified empire, and legions of new taxpayers to pay for it all. So he pushed a series of laws -- the Lex Papia Poppaea -- designed to encourage marriage and childbearing.
It didn't work. Nor would it have -- the Augustan government gave political and economic advantages to Roman couples who bore three children. But in that age of high mortality, to merely keep the population in equilibrium would require an estimated five or six children per woman. Unable to meet even the Emperor's modest birth-rate goals, the fertility rate of the Roman aristocracy continued to stagnate, and eventually it crashed.
It’s why there are no Romans anymore. They literally bred themselves out of existence. The Huns and Goths who overran the Empire in the Fifth century A.D. were able to do so in large part because there were few native Romans left to stand in their way.
Demography foretold Roman destiny. Will it foretell ours?