The US Economy Is Walking a Tightrope Between Aging and AI (Bloomberg)

#1

For years economists have worried that the US’s aging population and falling birth rate would slow economic growth and leave future generations worse off. Now a new idea is gaining traction: that artificial intelligence could help America innovate its way out of demographic decline. Too few workers? We’ll have AI! Older workers becoming less productive? We’ll have AI! A shortage of caregivers for the elderly? We’ll have AI!

It’s plausible that AI will eventually help offset slowing growth from an aging population. That the US is facing two major transitions at the same time, however, doesn’t mean they’ll cancel each other out. In fact, in the short term at least, the better bet is that the two will compound — further decreasing labor market stability while people are already feeling precarious.

…

So what does this mean for the economic outlook?

In general, economists tend to worry less about the long-run effects of technological change than about the transition. The consensus view is that higher productivity ultimately leads to economic growth, and that governments have tools — such as taxation and the social safety net — to share those gains. The real concern is the adjustment period.

Many people invoke the Industrial Revolution as a reassuring analogy for AI. And it’s true that, in the end, living standards rose. But living through the Industrial Revolution was a whole different ballgame. It was disruptive. It was violent. Many people suffered. It’s easy, 200 years later, to look back and say, “Thanks to the Industrial Revolution, our living standards are higher.” But the actual process of getting there was stressful, to say the least.

As Mokyr argued, that the Industrial Revolution coincided with rapid population growth likely made the transition more difficult. It seems unlikely that this one will be easier simply because the demographic transition is moving in the opposite direction. The jobs AI can do and the ones an aging society needs most just don’t appear to line up. Instead the more likely outcome is that the economy will have to navigate two massive transitions at the same time — and that each will complicate the other.

Read the full story: The US Economy Is Walking a Tightrope Between Aging and AI (Bloomberg)

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#2

There are various issues:
AI
Increased older population
Lower fertility (from both biological and society causes)
Accelerated aging for some in the younger generations (which also results in increased autoimmune diseases, increased neurodevelopment disorders, reduced fertility (see above) and increases in things like endometriosis (with the link again to fertility).
Climatic change (its hot in England at the moment).

Three of those five are linked to the ageing and development pointer, where it is set at conception and how quickly it developes/ages.

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#3

An ageing society might not cost too much

A dystopian vision of the future may not come to pass

The year is 2100. It is a grim time to be of working age. Not only must you put up with rising sea levels, rampant rogue ais and colleagues who, 80 years after the pandemic, still do not know how to mute themselves on a video call, but your take-home pay is meagre. Taxes to finance state support for the vast grey population take an ever-larger chunk of your wage. After a century of health-care spending growing faster than the economy, there is little for anything but pills, hospital beds and nurses.

Economic theory lends support to science fiction. Spending on health care depends on how much it costs to provide and how much treatment is needed. Generally, the former has increased over time. Economists attribute this to Baumol’s cost disease, diagnosed by William Baumol, an American economist. Technologically intensive sectors (think of manufacturing or software development) get more productive. Labour-intensive service sectors do not. A doctor’s consultation takes roughly as long as it did a century ago. Yet physicians’ pay must match increases in faster-growing skilled industries, or all the doctors will go to work in tech. (Baumol pointed out that a string quartet still took 45 minutes to perform a Schubert work, but was paid vastly more than when the composer was alive.)

As for the volume of health care, there is a debate over whether “expansion” outweighs “compression”. As medical knowledge improves people live longer but not for ever. Eventually they fall ill and die. The question is whether the total time spent poorly expands as the population ages, becoming more decrepit and needing more complex and expensive care, or whether the same sort of advances that keep them alive also keep them healthier. Sickness would become compressed into just a few years before death.

Two new papers from the National Bureau of Economic Research, a repository of economic thought, suggest that the vision of health care gobbling up tax revenues may not come to pass. In the first, David Cutler and Lev Klarnet, both of Harvard University, observe that in 2024 America spent $1trn less on health care than official forecasts from 2010. The second is by Liran Einav, of Stanford University, and Amy Finkelstein, of the Massachusetts Institute of Technology (mit). Using a survey of users of Medicare, America’s system of health insurance for the old, they find that, whereas expected lifetime spending on Social Security (ie, pensions) rose by 14% between 1993 and 2017, the expected cost of Medicare increased by only 6%. That is partly because elderly Americans have been collecting their pensions for longer but spending less time seriously ill.

Read the full story: An ageing society might not cost too much (The Economist)

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#4

But, on the downside…

For the first time in human history, a baby born today has a real shot at living to 100. Medicine, nutrition, and public health have done their job. But here’s the twist nobody planned for: while our bodies are being engineered to last a century, our careers are aging out every eight to ten years. We’ve solved for a longer life and accidentally created a shorter shelf life for the skills that pay for it.

I call this the Longevity-Relevance Paradox, and it may be the single biggest workforce challenge of the next fifty years. Living longer used to mean more time to enjoy the fruits of a stable career. Now it means more decades spent watching your expertise expire, again and again, while the clock keeps ticking toward a retirement that keeps getting pushed further away.

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#5

IMO AI will actually solve some of the maladies from an ageing population (i.e. address the work force shortage and help rain in government deficits to some degree), but it appears to be creating other major issues such as labor shortages which is already evident (in past year or so there’s barely any jobs created in US) and accumulation of wealth at the top of food chain. Most of the AI wealth is being accumulated at the billionaire level while common folks haven’t seen much of an increase in their net worth apart from increases in home values which is a double edge sword in itself. Unfortunately, US government (and other developed governments) have done nothing to address these issues and there isn’t even much talk about it at the moment.

As far as ageing population being a problem USA will fare way better than all other developed countries and also China. They are in dire straits already while it has not hit USA yet and probably won’t in another decade or two. USA population growth is projected to slow a bit, but it is estimated to peak at about 430 million mark in next 70 years or so whereas all other developed countries will see their population shrink, some to the tune of 30-50%. Look at Japan as an example their GDP was $5T in 1994 same exactly as it was in 2025. Adjusting for inflation their GDP has basically shrunk by 50% in last 30 years. Obviously, there are other factors at play, but a big factor is that their population median age has gone up a lot (from 39 in 1995 to 50 in 2025), while their overall population has actually shrunk by over 6M people in last 20 years or so. Same is happening now in Europe and China. Unless they start popping kids out of incubators like chickens LOL there will be major issues facing most of the world and AI may help somewhat but will not be able to address all. For a business to remain vibrant you need consumers/customers while for economy to grow they need people. AI won’t help with either so next 100 years will be very challenging and interesting at same time. As is the case with all species humans do adjust to the environment but this one will be very interesting to see how it will play out.

Countries with the Highest Population in 2100

All 195 countries projected to 2050 & 2100

Sorted by 2050 population · UN WPP 2024

# Country 2025 2050 Δ 2025→2050 2100 Δ 2025→2100 Peak year
1 :india: India 1.46B 1.68B +14.7% 1.51B +2.8% 2061
2 :cn: China 1.42B 1.26B -11.0% 633.4M -55.3% 2021
3 :us: United States 347.3M 380.8M +9.7% 421.3M +21.3% 2100
4 :pakistan: Pakistan 255.2M 371.9M +45.7% 511.0M +100.2% 2100
5 :nigeria: Nigeria 237.5M 359.2M +51.2% 476.7M +100.7% 2100
6 :indonesia: Indonesia 285.7M 320.7M +12.2% 295.5M +3.4% 2058
7 :ethiopia: Ethiopia 135.5M 225.0M +66.1% 367.3M +171.1% 2100
8 :congo_kinshasa: Democratic Republic of the Congo 112.8M 218.2M +93.4% 430.7M +281.7% 2100
9 :brazil: Brazil 212.8M 217.5M +2.2% 163.4M -23.2% 2042
10 :bangladesh: Bangladesh 175.7M 214.7M +22.2% 208.6M +18.7% 2071
11 :egypt: Egypt 118.4M 161.6M +36.6% 201.9M +70.6% 2100
12 :mexico: Mexico 131.9M 148.9M +12.9% 130.2M -1.3% 2058
13 :ru: Russia 144.0M 136.1M -5.5% 126.4M -12.2% 1991
14 :philippines: Philippines 116.8M 134.4M +15.1% 114.2M -2.2% 2057
15 :tanzania: Tanzania 70.5M 129.6M +83.7% 262.8M +272.6% 2100
16 :vietnam: Vietnam 101.6M 110.0M +8.3% 91.7M -9.7% 2049
17 :jp: Japan 123.1M 105.1M -14.6% 76.8M -37.6% 2009
18 :iran: Iran 92.4M 101.9M +10.2% 80.0M -13.4% 2053
19 :tr: Turkey 87.7M 91.3M +4.1% 65.3M -25.5% 2047
20 :uganda: Uganda 51.4M 85.4M +66.3% 120.8M +135.2% 2100
21 :sudan: Sudan 51.7M 85.2M +64.9% 136.9M +165.0% 2100
22 :kenya: Kenya 57.5M 83.6M +45.3% 104.2M +81.1% 2098
23 :south_africa: South Africa 64.7M 79.2M +22.3% 94.3M +45.7% 2100
24 :de: Germany 84.1M 78.3M -6.9% 70.9M -15.7% 2024
25 :afghanistan: Afghanistan 43.8M 76.9M +75.4% 130.2M +197.0% 2100
26 :uk: United Kingdom 69.6M 75.5M +8.6% 74.3M +6.8% 2072
27 :angola: Angola 39.0M 74.3M +90.3% 150.0M +284.3% 2100
28 :iraq: Iraq 47.0M 71.9M +53.0% 100.6M +114.1% 2100
29 :yemen: Yemen 41.8M 71.0M +69.9% 110.0M +163.4% 2100
30 :fr: France 66.7M 68.2M +2.4% 68.5M +2.8% 2095
31 :thailand: Thailand 71.6M 66.4M -7.3% 45.6M -36.4% 2022
32 :mozambique: Mozambique 35.6M 63.5M +78.3% 104.3M +192.8% 2100
33 :algeria: Algeria 47.4M 59.6M +25.6% 64.5M +36.0% 2089
34 :colombia: Colombia 53.4M 59.4M +11.2% 47.1M -11.9% 2050
35 :myanmar: Myanmar 54.9M 58.6M +6.9% 49.7M -9.5% 2048
36 :cote_divoire: Côte d’Ivoire 32.7M 55.7M +70.4% 104.0M +218.1% 2100
37 :madagascar: Madagascar 32.7M 53.2M +62.4% 85.3M +160.7% 2100
38 :niger: Niger 27.9M 52.5M +88.1% 90.8M +225.3% 2100
39 :uzbekistan: Uzbekistan 37.1M 52.2M +40.9% 74.3M +100.7% 2100
40 :it: Italy 59.1M 51.9M -12.3% 35.4M -40.2% 2014
41 :cameroon: Cameroon 29.9M 51.1M +71.0% 88.9M +197.5% 2100
42 :ghana: Ghana 35.1M 50.6M +44.2% 67.5M +92.6% 2100
43 :argentina: Argentina 45.9M 48.3M +5.4% 38.3M -16.6% 2050
44 :saudi_arabia: Saudi Arabia 34.6M 47.7M +38.0% 71.0M +105.4% 2100
45 :mali: Mali 25.2M 46.2M +83.2% 79.4M +214.9% 2100
46 :canada: Canada 40.1M 45.6M +13.7% 53.6M +33.6% 2100
47 :kr: South Korea 51.7M 45.1M -12.6% 21.8M -57.7% 2020
48 :es: Spain 47.9M 44.9M -6.2% 33.1M -30.8% 2023
49 :malaysia: Malaysia 36.0M 44.3M +23.1% 44.0M +22.4% 2072
50 :morocco: Morocco 38.4M 43.4M +13.0% 37.9M -1.4% 2058
51 :peru: Peru 34.6M 40.6M +17.4% 38.2M +10.4% 2066
52 :chad: Chad 21.0M 38.9M +85.0% 69.5M +231.1% 2100
53 :zambia: Zambia 21.9M 38.1M +73.8% 64.5M +194.2% 2100
54 :syria: Syria 25.6M 37.8M +47.5% 43.7M +70.5% 2086
55 :malawi: Malawi 22.2M 37.4M +68.2% 59.1M +166.2% 2100
56 :burkina_faso: Burkina Faso 24.1M 37.3M +54.9% 49.9M +107.1% 2100
57 :somalia: Somalia 19.7M 37.2M +89.3% 67.4M +242.7% 2100
58 :nepal: Nepal 29.6M 34.6M +17.0% 31.8M +7.5% 2066
59 :poland: Poland 38.1M 32.8M -14.0% 19.3M -49.3% 2023
60 :australia: Australia 27.0M 32.5M +20.5% 43.1M +59.9% 2100
61 :ukraine: Ukraine 39.0M 32.0M -17.9% 15.2M -61.0% 1993
62 :venezuela: Venezuela 28.5M 31.1M +9.0% 28.3M -0.8% 2057
63 :senegal: Senegal 18.9M 30.4M +60.4% 47.0M +148.3% 2100
64 :kazakhstan: Kazakhstan 20.8M 26.5M +27.3% 33.7M +61.5% 2100
65 :zimbabwe: Zimbabwe 17.0M 25.9M +52.6% 37.2M +119.3% 2100
66 :north_korea: North Korea 26.6M 25.8M -3.0% 19.5M -26.6% 2032
67 :sri_lanka: Sri Lanka 23.2M 24.8M +6.8% 21.2M -8.5% 2051
68 :guatemala: Guatemala 18.7M 24.7M +32.0% 25.9M +38.7% 2077
69 :benin: Benin 14.8M 24.4M +64.9% 39.6M +167.2% 2100
70 :burundi: Burundi 14.4M 24.1M +67.7% 37.9M +163.2% 2100
71 :guinea: Guinea 15.1M 23.4M +55.0% 32.0M +112.0% 2100
72 :rwanda: Rwanda 14.6M 22.7M +55.9% 32.8M +125.0% 2100
73 :cambodia: Cambodia 17.8M 21.9M +22.9% 22.7M +27.4% 2078
74 :ecuador: Ecuador 18.3M 21.3M +16.7% 19.1M +4.4% 2063
75 :chile: Chile 19.9M 20.3M +2.3% 13.4M -32.4% 2041
76 :netherlands: Netherlands 18.3M 19.0M +3.3% 17.5M -4.6% 2041
77 :south_sudan: South Sudan 12.2M 18.3M +50.5% 23.8M +95.6% 2100
78 :jordan: Jordan 11.5M 16.4M +42.1% 21.3M +85.1% 2100
79 :bolivia: Bolivia 12.6M 16.1M +28.0% 17.8M +41.2% 2086
80 :romania: Romania 18.9M 16.0M -15.2% 10.8M -43.1% 1991
81 :togo: Togo 9.7M 15.6M +60.3% 26.3M +170.5% 2100
82 :tajikistan: Tajikistan 10.8M 15.6M +44.4% 20.2M +87.3% 2100
83 :united_arab_emirates: United Arab Emirates 11.3M 15.4M +35.4% 26.1M +130.3% 2100
84 :papua_new_guinea: Papua New Guinea 10.8M 14.9M +38.5% 18.6M +73.2% 2100
85 :honduras: Honduras 11.0M 14.8M +34.9% 17.0M +54.7% 2090
86 :haiti: Haiti 11.9M 14.7M +23.6% 15.2M +27.3% 2075
87 :tunisia: Tunisia 12.3M 13.1M +6.4% 10.7M -13.7% 2051
88 :israel: Israel 9.5M 13.1M +37.6% 19.7M +107.5% 2100
89 :dominican_republic: Dominican Republic 11.5M 13.0M +12.8% 11.7M +1.3% 2060
90 :sierra_leone: Sierra Leone 8.8M 12.9M +46.8% 15.9M +80.7% 2092
91 :belgium: Belgium 11.8M 11.9M +1.0% 11.1M -5.9% 2044
92 :sweden: Sweden 10.7M 11.3M +6.1% 11.4M +6.7% 2079
93 :azerbaijan: Azerbaijan 10.4M 11.2M +8.0% 10.0M -3.6% 2050
94 :congo_brazzaville: Congo 6.5M 11.0M +69.7% 20.0M +208.9% 2100
95 :central_african_republic: Central African Republic 5.5M 10.6M +92.6% 18.8M +240.6% 2100
96 :czech_republic: Czech Republic 10.6M 9.8M -7.4% 8.2M -22.4% 2023
97 :portugal: Portugal 10.4M 9.8M -6.2% 8.8M -15.9% 2010
98 :laos: Laos 7.9M 9.8M +23.9% 9.3M +17.6% 2068
99 :kyrgyzstan: Kyrgyzstan 7.3M 9.6M +32.2% 11.7M +60.8% 2100
100 :turkmenistan: Turkmenistan 7.6M 9.6M +26.5% 9.9M +30.6% 2078
101 :mauritania: Mauritania 5.3M 9.4M +77.2% 17.1M +222.1% 2100
102 :cuba: Cuba 10.9M 9.4M -14.2% 5.6M -49.0% 2012
103 :switzerland: Switzerland 9.0M 9.3M +4.2% 9.1M +1.8% 2051
104 :libya: Libya 7.5M 9.3M +24.2% 9.8M +31.2% 2086
105 :liberia: Liberia 5.7M 8.9M +55.5% 12.7M +121.0% 2100
106 :greece: Greece 9.9M 8.8M -11.3% 6.3M -36.9% 2010
107 :nicaragua: Nicaragua 7.0M 8.8M +24.9% 8.6M +22.9% 2071
108 :hungary: Hungary 9.6M 8.7M -9.4% 7.5M -22.5% 1980
109 :austria: Austria 9.1M 8.7M -4.3% 7.4M -18.8% 2023
110 :paraguay: Paraguay 7.0M 8.6M +23.2% 9.0M +29.0% 2077
111 :palestinian_territories: Palestine 5.6M 8.5M +51.2% 11.5M +105.4% 2100
112 :oman: Oman 5.5M 7.8M +42.4% 12.1M +120.1% 2100
113 :belarus: Belarus 9.0M 7.5M -17.2% 4.4M -51.6% 1993
114 :lebanon: Lebanon 5.8M 7.0M +19.7% 7.2M +23.0% 2080
115 :el_salvador: El Salvador 6.4M 6.7M +4.7% 5.1M -20.3% 2047
116 :kuwait: Kuwait 5.0M 6.4M +26.7% 9.6M +91.0% 2100
117 :denmark: Denmark 6.0M 6.1M +2.0% 5.9M -2.3% 2041
118 :singapore: Singapore 5.9M 6.1M +3.6% 4.2M -29.1% 2040
119 :ireland: Ireland 5.3M 6.0M +12.5% 5.3M -0.4% 2053
120 :norway: Norway 5.6M 5.9M +4.9% 5.4M -3.7% 2050
121 :new_zealand: New Zealand 5.3M 5.8M +9.6% 5.8M +10.7% 2077
122 :eritrea: Eritrea 3.6M 5.7M +57.9% 8.4M +134.1% 2100
123 :panama: Panama 4.6M 5.6M +23.2% 5.9M +29.2% 2080
124 :serbia: Serbia 6.7M 5.5M -17.3% 3.7M -44.7% 1986
125 :bulgaria: Bulgaria 6.7M 5.4M -19.6% 3.5M -47.4% 1988
126 :costa_rica: Costa Rica 5.2M 5.4M +3.9% 3.8M -26.7% 2044
127 :finland: Finland 5.6M 5.4M -4.8% 4.6M -18.2% 2025
128 :slovakia: Slovakia 5.5M 4.9M -9.8% 3.4M -37.4% 2023
129 :namibia: Namibia 3.1M 4.5M +45.9% 5.9M +90.7% 2100
130 :mongolia: Mongolia 3.5M 4.5M +28.0% 5.5M +56.9% 2100
131 :gambia: Gambia 2.8M 4.3M +52.4% 5.7M +102.1% 2100
132 :qatar: Qatar 3.1M 4.2M +33.6% 7.3M +133.4% 2100
133 :gabon: Gabon 2.6M 4.1M +57.5% 6.9M +166.2% 2100
134 :georgia: Georgia 3.8M 3.7M -3.8% 3.0M -22.0% 1988
135 :guinea_bissau: Guinea-Bissau 2.3M 3.4M +52.8% 4.7M +107.3% 2100
136 :botswana: Botswana 2.6M 3.4M +34.2% 3.8M +49.8% 2086
137 :uruguay: Uruguay 3.4M 3.3M -3.9% 2.2M -33.6% 2020
138 :croatia: Croatia 3.8M 3.2M -16.0% 2.1M -44.4% 1990
139 :equatorial_guinea: Equatorial Guinea 1.9M 3.1M +62.2% 5.0M +158.2% 2100
140 :lesotho: Lesotho 2.4M 3.0M +26.7% 3.3M +37.9% 2082
141 :armenia: Armenia 3.0M 2.5M -15.5% 1.7M -42.7% 1991
142 :bosnia_herzegovina: Bosnia and Herzegovina 3.1M 2.5M -21.8% 1.4M -56.5% 1991
143 :jamaica: Jamaica 2.8M 2.5M -13.5% 1.1M -62.4% 2023
144 :moldova: Moldova 3.0M 2.4M -21.5% 1.5M -50.3% 1991
145 :lithuania: Lithuania 2.8M 2.3M -20.2% 1.2M -57.3% 1991
146 :albania: Albania 2.8M 2.2M -19.2% 1.2M -57.3% 1991
#6

The projections about US population growth are interesting and probably flawed.

There was an article 4 days ago in NYT that I won’t link because it is behind a paywall but the jist was that all the estimators use very rosy projections.

Things like fertility rates staying stable from today. When you see the trend in every developed country and see that it doesn’t plateau - it continues to decline.

The other trend they see (they being these population number predictors) is highish immigration rates and what the author points out is that the backlash we see today isn’t magically going away in 2028. Even if politics change, they will change again. No Democrat is going to push high immigration rates anytime soon.

Without births and immigration. This author predicts peak US population in mid 2030s and showing declines by 2050.

The author made very good points in my opinion that the US will likely not grow anywhere near what these predictions say. When you dissect the numbers they are using, the predictions look just ridiculous.

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#7

Agree… ridiculous…and further, no consideration is given to the enormous negative effects that we will most likely see with continuing global heating via irresponsible use of hydrocarbons.

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