Prosperity in The Age of Decline: How to Lead Your Business and Preserve Wealth Through the Coming Business Cycles

Chapter 4Depression DriverDemographics

There are demographic trends that mean eventual significant financial distress for the United States. These trends are dominant. We are aging as a nation. We have entitlement programs tied to aging that are not financially viable. We will go broke and experience the Great Depression of the 2030s unless something changes.

We need to change either the demographic trends themselves or how we fund caring for our elderly. Both of these will be extremely difficult to do. We are assuming in our projection of a coming Great Depression that what is difficult to change will not be altered and that the path of least resistance will be adhered to when it comes to demographics. The result of following this path of least resistance (what we think of as political inertia) will be broad-based financial distress, which will be an important contributing factor to the Great Depression of the 2030s.

Demographic trends are driven by birth rates, mortality rates, and immigration. Significant assumptions need to be made when projecting demographic trends, and some folks are quick to point out that such forecasts are never right. For our purposes, they do not need to be right, just generally true. It doesn't matter if the population projections are off by 10 million or more when you are talking about a total U.S. population of approximately 400 to 438 million by the year 2050. The trend is there whether you are talking about 400 million people or 438 million people. ...