US Birth Rate Hits New Low – A Nation of Singles

[MachineGhost]

One of the issues I have been focused on for the last several years has been the trend in demographics in the US and in developed countries in general. Our populations are getting older – we all know that. But the reasons why our populations are getting older are not widely understood by many Americans. Those reasons include the falling birth rate, the falling fertility rate, the falling marriage rate and the explosion in singles – people who never marry.

The US birth rate fell to a record low in 2011. The marriage rate is tumbling as well. And the number of single Americans is now at a record high. The implications of these developments are troubling, not only for the economy, but also for the investment markets and the continual expansion of the federal government.  Government debt has spiraled out of control in recent years, and the demographics suggest that this trend will continue as we care for an aging population.

Today, we will look at some new information on demographic trends in the US and in the West in general that should concern you – and all Americans for that matter. This will be a continuing theme in my E-Letters in the months and years ahead. Let’s get started.

http://www.ritholtz.com/blog/2012/12/us ... f-singles/

[Greg]

I worry about this and how it might then not involve as much capital moving into equities and rather risk-off with the bond markets. It's why I'm in the PP in the first place because I don't know exactly what will happen but I'm thinking this will lead to long-term bond rates low for a long whiles.

[TripleB]

All of this is the outcome of government policies:

1) Making immigration overly restrictive

2) Inflationary policies that drive up the cost of raising children greater than wage inflation, giving less discretionary income for raising a family

3) Student loan policies encouraging over-borrowing and thus increased inflation on college costs, which demotivates parents from having children

4) Ridiculously one-sided divorce policies that significantly favor women which results in less men interested in marriage

5) Inflationary policies driving up the cost of healthcare greater than wage inflation - and kids are expensive from a healthcare perspective

6) Running public schools into the ground with awful policies like NCLB, which make parents less interested in bringing a child into the world to put them through those sh*tholes, if they can't afford private school, which most families cannot

7) Many of the above factors making it less favorable to have children, which makes marriage less necessary

Legalization of Abortion in Rowe V Wade

On top of those government factors, mix in:

9) The reduction in strength of the church, which makes living out of wedlock and premarital sex less of an issue

10) Increases in birth control options

From my pure libertarian perspective the reduction in children/marriage would not be a problem except the left-wing extremists have set up pay-as-you-go entitlement programs that require birth rates to increase over time to stay solvent, while the right-wing extremists have pushed for anti-immigration policies... partly because of left-wing entitlement programs that disproportionately benefit poor immigrants.

In other words, if libertarians had their way, it's likely the birth rate/marriage rate would stay the same or rise, however if it didn't, then there'd be no negative consequence.

[RuralEngineer]

Who cares? If we fixed the immigration system and started syphoning off educated workers from various countries we could make this a non-issue. I work with an engineer who's been trying to get a green card for 8 years and he's lived here for 12. We take educated highly skilled workers and make them jump through a million hoops, but look at how the dems bend over backwards for the illegals.

[edsanville]

Legalization of Abortion in Rowe V Wade

I'm sorry, but this made me laugh.  I'm sure you meant for that to be a smiley face...

[D1984]

I'm sorry, but this made me laugh.  I'm sure you meant for that to be a smiley face...

I think that's just an accident that happens when you combine an 8 and a parentheses

[clacy]

This seems to happen in first world countries.  Lifestyles seem to get so good, that young people do not want to be bothered with children (at least the ones above the median income line).

Europe and Japan are even worse.  This will be very destructive to the American way of life, IMO.

[D1984]

From my pure libertarian perspective the reduction in children/marriage would not be a problem except the left-wing extremists have set up pay-as-you-go entitlement programs that require birth rates to increase over time to stay solvent, while the right-wing extremists have pushed for anti-immigration policies... partly because of left-wing entitlement programs that disproportionately benefit poor immigrants.

Technically they require the amount of economic output and economic productivity to increase, not the population. If we had 200 million more people but all of us who were currently working (the 190 million or so now plus the hypotehtical 200 million) produced as much per capita as they do in, say, Haiti, SS would be screwed much worse than it is now. Conversely, if we had half as many workers as we now have but they all produced two and a half times as much as they currently produce per worker SS would be fine (provided the political will was there to fund it from the increased economic output).

Besides, how is a privately funded retirement system 100% immune to demographic decline and population aging either....how would a yen-denominated 60/40 or 50/50 Japanese stock/bond blend have done if that's what your private retirement account (or non-paygo replacement for whatever Japan's version of SS) was invested in if you were a Japanese investor?

[TripleB]

Besides, how is a privately funded retirement system 100% immune to demographic decline and population aging either....how would a yen-denominated 60/40 or 50/50 Japanese stock/bond blend have done if that's what your private retirement account (or non-paygo replacement for whatever Japan's version of SS) was invested in if you were a Japanese investor?

So your argument is because you can devise a single case where a privately-funded retirement system may not have worked, that no privately-funded retirement systems can work and it's better to use a pay-go system which is proven can't work?

[doodle]

This seems to happen in first world countries.  Lifestyles seem to get so good, that young people do not want to be bothered with children (at least the ones above the median income line).

Europe and Japan are even worse.  This will be very destructive to the American way of life, IMO.

Destructive....why? More space and resources for us all. I'd prefer this than to live in a teeming gerbil cage....

[Pointedstick]

Besides, how is a privately funded retirement system 100% immune to demographic decline and population aging either....how would a yen-denominated 60/40 or 50/50 Japanese stock/bond blend have done if that's what your private retirement account (or non-paygo replacement for whatever Japan's version of SS) was invested in if you were a Japanese investor?

So your argument is because you can devise a single case where a privately-funded retirement system may not have worked, that no privately-funded retirement systems can work and it's better to use a pay-go system which is proven can't work?

I think it's pretty common sense that putting your savings into financial assets that everyone is selling would be a bad idea. If there are more retirees than savers, for example, and everyone's saving with stocks, the downward trend from the retirees selling will be twice as strong as the upward one from the savers saving.

A private retirement system with a demographic imbalance toward old people can certainly work, but I think it would require people to save in non-financial assets like cash whose "asset value" doesn't fall when everyone is selling.

[D1984]

So your argument is because you can devise a single case where a privately-funded retirement system may not have worked, that no privately-funded retirement systems can work and it's better to use a pay-go system which is proven can't work?

No, my argument is that in a demographic decline that results in slow, no, or stagnant growth, asset price deflation, and population shrinking faster than productivity growth is rising that we would be screwed six ways from Sunday whether we had a fully private account system, government pension fund that was bnased on being fully funded insted of paygo, or a 100% paygo system.

If we had enough economic growth vs population decline (the productivity per worker grows faster than the amount of workers declines) then any one of the three above systems would be theoretically sustainable.

[MachineGhost]

If we had enough economic growth vs population decline (the productivity per worker grows faster than the amount of workers declines) then any one of the three above systems would be theoretically sustainable.

https://www.youtube.com/watch?v=hEK4h_p6N6U

[Kriegsspiel]

I remember reading a book by some dude... he wrote something under a German pseudonym, but published under his real name, that talked about massive birth rate decline, especially in Europe and the Middle East, and how those cultures were declining so much that there won't be Germans in 2100.

Personally, I can say that I'm not interested in marriage directly because of the cost of divorce.


Also, why get married, as a young man?  Because of the woman's lib movement, I think, you can bang chicks all the time.  So you don't need to get married to fuck people.  For women, obviously, this is a loser, since they have a biological clock that's ticking.  But how many 35 year old women can find someone to marry them, contrasted with 35+ year old men? 

I'm in no hurry.

[edsanville]

massive birth rate decline, especially in Europe and the Middle East,

Birth rates are declining in the Middle East?  I'm curious, in which Middle Eastern countries?

[brick-house]

krieggspiel wrote:

Also, why get married, as a young man?  Because of the woman's lib movement, I think, you can bang chicks all the time.  So you don't need to get married to fuck people.  For women, obviously, this is a loser, since they have a biological clock that's ticking.  But how many 35 year old women can find someone to marry them, contrasted with 35+ year old men?

Keep on trucking...

http://www.youtube.com/watch?v=6Wf-mRo7C2I

[MachineGhost]

Also, why get married, as a young man?  Because of the woman's lib movement, I think, you can bang chicks all the time.  So you don't need to get married to fuck people.  For women, obviously, this is a loser, since they have a biological clock that's ticking.  But how many 35 year old women can find someone to marry them, contrasted with 35+ year old men? 

Men have a biological clock as well.  With the huge increase in autism and autism spectrum disorder of past few decades, it is looking increasingly correlated to the rapidly declining sperm quality in men, especially older men (30+).  But I don't see this "fact" changing behavior anytime soon.  Society is way too complex now for people to resume breeding like bunnies in their 20's.  Like the 1950's, it is gone forever.  Again, Japan leads the way.