The coming years will be marked by a seismic change in the economic landscape in the US. Firstly and most importantly, we are going to see economic growth slow down dramatically. Jeremy Grantham, an asset manager I respect, believes we’ll see global growth at 2% over the next seven years. Personally I believe it could be even lower than that.
The reasons for this slow down are myriad but the most important are:
Age demographics: a growing percentage of the population will be retiring while fewer younger people are entering the workforce.
Excessive debt overhang.
A return to more frugal “common sense” spending patterns in the developed world.
Political and Geopolitical uncertainty.
Regarding #1, Europe is the most glaring situation. According to Eurostat, between 2004 and 2050, the number of people of non-working age relative to those of working age will increase dramatically. In the EU in 2004 there were approximately four people of working age (19-64) for every person of non-working age (65 and older). By 2050, this number will have dropped to only two people of working age for every person of non-working age.
Over the same time period, Europe will also see a tripling in people considered to be “elderly” (80 or older) from 18 million to 50 million.
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1 comment:
Has anyone ever thought about if the country did go bankrupt what would happen?A lot of people seem to thing this can never happen.
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