Sir, Further to Anne Richards’ Insight column “Demographic trends require a rethink of our economic model” (February 7): the demographic-longevity-technological-fiscal quagmire likely worsens for most developed countries after 2050. According to Lynda Gratton and Andrew Scott in their recent book The 100-Year Life, “a child born in the West today has a more than 50 per cent chance of living to age 105”; that is, until 2120!
The current, and declining, worldwide fertility rate and the extremely low interest rate environment (in part due to secular stagnation) are intensifying pension deficits from combined public, employer and individual sources for current retirement periods of about 20 years — not to mention the 30-40 years of resources that will be needed by retirees in the last decades of this century — and straining retiree living standards. Exacerbating the problem are the current adverse environment for immigration into developed countries and the projected modest growth in employment over the next few decades as the “algorithmic and robotic economy” begins to eliminate jobs in the vast service sector of the rich countries.
The only silver lining in this developing “train wreck” is we still have time to rethink the economic model. However, the appointment of a blue-ribbon, bipartisan committee to study this problem and propose feasible recommendations requires a functioning government. Sadly, in the case of the US, this has not been in evidence for over a decade.
Professor of Economics and Finance,
Montclair State University, NJ, US
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