Living longer and working less

Many say the sizes and ages of population groups as well as factors like birth and death rates determine many economic outcomes.  How do such demographic factors affect us today? N.C. State University economist Mike Walden weighs in.

“This is really the big force, I think, in our world today — and especially in our economy.  I think most people know we are an aging society.  Those people over age 65 are increasing much faster than those under age 65.  For example, the portion of folks over age 65 is 50 percent higher than it was in 1950.  And that proportion is going to double in the next 20 or so years.

“I think the biggest impact of this has been on pensions and on health care expenditures.  And when we look at the government, of course, and we think of pensions, we think of Social Security.  When we look at health care and we think of the government, we think of Medicare and Medicaid.  Together these three programs now account for 43 percent of all federal spending. By 2035 … they will account for 67 percent of all federal spending.

“The implication is that if we want to reduce the deficits, reduce the debt, balance the budget, it’s going to have to go through — in some way, shape or form — these three programs. And that’s a big issue.”