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The big issue IMO with a declining population is a lot of our economic structure here in America is built on the assumption growth is infinite. Social security
by lumb63 3y ago
The big issue IMO with a declining population is a lot of our economic structure here in America is built on the assumption growth is infinite.
Social security would be insolvent if not enough people paid in to fund those being paid out. Stock prices and home prices would decrease as well. Debt would become more expensive since there would be fewer people to pay it back.
Because assets are priced based on their future value, growth is a huge component of the prices assets. The value of most everything in our society is predicated on that rate of growth.
- floatrock 3y agoWell when you put it that way, it kinda sounds like you're describing a ponzi scheme. What happens when this infinite growth starts to run up against finite planetary boundaries?
- imtringued 3y agoYou start a world war to reset the board game.
- imtringued 3y agoAlso most economists make assumptions of endless economic growth. Especially the Austrian Economists with their pure time preference theory implicitly assume endless growth as pure time preference makes no sense in an economy that is stagnating or shrinking. Why would patience be rewarded in the future if the future will be worse? A lot of the foundations of economics fall apart once you assume logistic growth.