Welfare States Decline Along With Youth Population

Yes, dear reader, it looks to us as though the welfare state is kaput. Because it depends on the future to support it. And guess what, there is no future…

Ha ha…

Remember the Population Bomb of the ’70s? If we’re not mistaken that was Paul Erhlich’s dire, neo-Malthusian warning. There were soon going to be more people than the world could support.

Well, the population bomb turned out to be a dud. And now, in the developed world, the really explosive danger is not too many people, but too few people. It’s blowing up the social welfare systems put in place in the early and mid-20th century.

“By 2050,” writes Giulio Meotti in The Wall Street Journal, “60% of Italians will have no brothers, no sisters, no cousins, no aunts, no uncles.”

Gee, wonder what the weddings, funerals, family reunions and estate battles will be like. You may want to fight over dad’s bank account, but who will you fight with?

According to Meotti, Italy is approaching the point of no return. Once you get to a certain level, there aren’t enough fertile young people to replace the population that is retired and aging.

“According to demographic forecasts, it is highly unlikely that the number of people under 20 will ever again exceed the number of people over 60,” he writes.

Italians are committing social suicide, he says, disappearing by choice.

What happens to the social welfare state when the number of people who are meant to be supported becomes larger and larger…while the number of people who are meant to be supporting them becomes smaller and smaller? We don’t know. But we’re going to find out.

Italy and Japan are leading the world in the race to self-extermination. Others are coming along. But the financial problems caused by too many old people are ubiquitous. France was paralyzed by strikes yesterday because the government threatened to raise the retirement age from 60 to 62. Sacre bleu! Most likely, people will work ’til 70 before the welfare state finally dies.

Bill Bonner
for The Daily Reckoning