The Council of Economic Advisers on the Challenge of an Aging Population.  

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[s.n]

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Population and Development Review vol. 23 no. 2 (Jun. 1997), page 443-451 .
Topik: Economic Advisers; Aging Population; Impact of demographic trends.

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Perpustakaan Pusat (Semanggi) Nomor Panggil: PP30 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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The 1997 Annual Report of the US Council of Economic Advisers (a document of some 400 pages, formally an Annex to the Economic Report of the President, Transmitted to the Congress February 1997, Washington, DC: US Government Printing Office) returns to the examination of the challenge an aging population poses to the American economy. (Aspects of this topic were also explored in the Council's 1996 Report; see the Documents section in the March 1996 issue of PDR.) Two issues are highlighted in the Council's 1997 analysis: the likely impact of demographic trends on the rate of private savings and the consequences of aging for public spending. Economists' expectations concerning saving behavior have not been borne out by recent US experience; private savings fell considerably short of what had been predicted on the basis of the life-cycle model of saving, which stipulates high saving rates dur- ing peak earning years and dissaving after retirement. Demographics, the Report concludes, may not be as important a determinant of saving patterns as the theory suggests. In contrast, the impact of demographic changes on public saving-given existing entitlements-is clearly predictable. When the large baby boom cohorts enter the age of retirement, federal outlays on the Social Security program and on health programs (Medicare and Medicaid) will rise sharply. While current expenditure on these key social programs represents less than 9 percent of GDP, that proportion is projected to rise to 19 percent in 2050 and to 22 percent in 2070. In recent decades the level offederal revenues was about 18 percent of GDP. Thus, unless reforms are instituted, the three major entitlement programs could consume all government revenues by 2050 and exceed them thereafter. This would imply greatly lowered saving rates and increas- ingly large budget deficits, with adverse effects on economic growth. The Report examines the status of the entitlement programs in the light of projected demographic patterns. The excerpts below, from Chapter 3 of the Report, reproduce the section on demographic trends and part of the discussion devoted to Social Security, the program most directly affected by these trends.

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