Demographic Insecurity

Three seemingly unrelated stories in the last two weeks, on further reflection, seem to me inextricably entwined.  The Washington Post carried excellent coverage about the financial woes of our Social Security entitlement program.  For the first time in history, during 2010 Social Security went ‘cash negative’, spending more money than it took in.  Senate  President Harry Reid’s (D-Nevada) response was typical of the left, “Let’s worry about Social Security when it’s a problem.  Today, it is not a problem.”  Apparently the plan is to wait until the house is fully engulfed and the roof collapses, then call the fire department and try to save the foundation.

In 1940, there were 42 workers paying in for every one collecting.  In 1950, there were 16; in 2010 there were 2.8, and projections for 2030 are for 1.9 workers per retiree.  Those 1.9 should count on working long and hard.  In 1940, the average life expectancy was 62.8 years.  In 1950, it was 66.3, and in 2010, the average American will live until 80.  Most clearly, “Houston, we do have a problem.”

Social Security, according to those who know, is by far the easiest to fix among the big three entitlements: Social Security, Medicare and Medicaid.  Raise the retirement age, index the Cost of Living Adjustment (COLA) to prices, not wages, perhaps privatize some of it, move up the contribution rate slightly or means test the benefit recipients or raise the contribution cap, and we are there.  The longer the corrections are postponed, the more draconian will be the necessary remedy.

The second story last week exacerbates the first:  the Total Fertility Rate (TFR) in the United States dropped to 1.9 total births per fertile woman.  In 1960, the rate in the U.S. was around 3.6; in 2009, it was 2.05.  2.1 new births are necessary to sustain a population.   We postpone childbearing into our thirties and limit it to one or two children by and large; we live in a contraceptive society that frequently views children as either burdens or carefully protected and rare trophies.  When we factor in 53 million abortions in the U.S. since Roe v Wade and compare that to total employment of around 154 million and to economy growing consumers numbering 300 million, the implications for long term funding of retirement benefits become manifest.

The United States is following most of Europe into a spiral leading to an aging population incapable of supporting itself over time.  While sub-Saharan Africa and Muslim countries are exploding in population growth, the West declines.  (see link to CIA statistics on world wide TFR)  In Europe prospects are more barren still. France, like Japan and Canada, offers generous tax benefits and even payments to couples having children.  They are struggling up over 2.0 TFR with the incentives.  Greece and Italy have TFRs below 1.5, and they retire at younger ages.  Greece and Italy have crushing debt, and their bonds are on the brink of complete melt down.  There is the potential to devalue the Euro catastrophically and jeopardize the European Union itself.  Here we have Occupy Wall Street, which is bad enough. In Greece and Italy, faced with austerity measures that could cripple their debt supported standard of living, the well reasoned response has been full blown riots and burning, overturned cars.

Further complications: the Muslim population in Europe, which is a significant constituency already, has three times the birth rate of the native population.  Some European countries will have a Muslim majority at current trends before the middle of this century.

The final story adds a third perspective.  In Egypt, with the ascendency of radical Islam after the Arab Spring, life for the 8 million Coptic Christians, which was always hard, has become untenable.  Churches are bombed, massacres are threatened, and there are no Christians allowed in any leadership roles, including schools and government.  Under Mubarak, many times assaults on members of this ancient Christian sect were ignored.  Often the victims would be arrested as trouble makers, stifling the reporting of attacks.

Now he’s gone, and it’s gotten worse.  Harassment comes not just from radical Islamists, but most attacks originate from among the ordinary Muslim majority population over some imagined offense against Islam: a Coptic Church being renovated or built, the rumor of a sexual relationship between a Coptic man and a Muslim woman or just some perceived disrespect towards Islam from a Christian.  In October, a 17 year old Christian was told by his Muslim teacher to remove a cross he wore.  When he declined, the teacher began to beat him and was soon joined by the students.  The beating stopped when he died.

My suggestion is this:  If you are planning a visit to Florence or the Vatican while the Euro is cheap, sooner is better than later.  Michelangelo’s David will lose some of his cache with a robe on, and the Pieta will be nowhere to be found.  Ladies, get your burqa out of the cedar closet.

Allahu Akbar, anyone?

Where is the Life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?  T. S. Eliot