Many people are concerned with overpopulation, but the issue is much more complicated than simply “everything would be better if we had less people in the world.” One especially critical issue concerns the link between population growth and economic growth. Yglesias explains:
In a very abstract sense, the way “savings” happens is that you build something expensive that lasts a long time—a building or an airplane or a really large boat—and then you rent it out to future people. This gets very hard to do if the quantity of people alive in the future is going to be shrinking.
An equivalently costly-to-construct building earns a lower rental income in a lower population growth dynamic. That means that unless future old people want to accept lower incomes, they need to start investing in increasingly lavish and expensive to build structures. That means that saving rates need to get really high.
How this becomes a serious long-term problem:
In the short term, an open economy facing demographic decline can try to deal with this by externalizing the savings and buying foreign assets. That’s part of the story with Germany, Japan, and persistent current account surpluses. But as the world as a whole shifts to a more Japan-esque demographic, there’s no “abroad” to invest in. Given such overwhelming desire to save for the future, the economy will either fall into a state of permanent recession, permanently negative real interest rates, or both (see again Japan)…
And how this could happen while overall global population growth still increases:
And global population doesn’t need to be strictly declining for a similar dynamic to take place. If all the world’s net population growth is happening in economic and institutional basketcases like Nigeria then absent a radical shift in the politics of immigration you get the same problem.
This time it’s different:
Still Crawling Out of a Very Deep Hole By Teresa Tritch
What distinguishes this jobs recovery from others is the sheer scale of the job loss that preceded it. The economy has regained 3.6 million jobs since employment hit bottom in February 2010, but it is still missing nearly 10 million jobs — 5.2 million lost in the recession and 4.7 million needed to employ new entrants to the labor market. The Economic Policy Institute estimates that at the average rate of job creation in the last three months, it would take until the end of 2017, fully 10 years from the start of the Great Recession in December 2007, to return to the prerecession jobless rate of 5 percent.
And there is no guarantee we will ever get there. It took about four years to close the job gaps created by the recessions that began in mid-1981 and mid-1990. In the tepid expansion after the 2001 recession, the job gap had still not closed by 2007.
Perhaps it’s a depression, not a recession?
I recommend reading John Hagel and Deloitte’s The Shift Index report to better understand what’s been going on with the national and global economies. I don’t understand why this report is not more widely discussed. It’s from the the writers/research center behind The Power Of Pull.
- Röyksopp - Running to the Sea (feat. Susanne Sundfør) - Skavlan Performance
I know we’ve posted on this in the past, but honestly is...