The Elderly US Population as a threat to the US Economy
One of the biggest threats to the US economy is the elderly population. It really is a ticking time bomb that a lot of people are trying to ignore. With the baby boomers about to retire there is a real crises on the horizon, one for which we are totalled unprepared. Other countries have been preparing for this problem by actively encouraging immigration; the United States has been trying to limit the number of immigrants who come to the country. This is going to make the aging population a bigger problem than it is in other countries.
The reason that an elderly US population is a threat to the economy is that as the population gets older the percentage of people who are working is going to decline. That means that the tax burden will fall on a smaller number of people at a time when government spending has to increase in order to pay for the extra cost of having more seniors. The cost of health care in particular is going to go up dramatically but there will be increases in a number of areas of government spending. The only possible way that this increased spending can be paid for is with higher taxes. This will be especially problematic since there will be fewer people working. That means that people will have less money to spend and that inevitably the economy will be hurt.
The other big threat the aging population poses to the US economy is simply that there will be fewer people working. That means that the countries productivity will have to decrease. If there are fewer workers the amount of work that can be done is going to have to go down. Ultimately the economy will have to shrink since there is less being produced and fewer people earning wages. This will almost certainly cause a contraction in the economy and inevitably a lower standard of living for the American people.
Another problem that an elderly population presents for the US economy is that older people will have little incentive to save money; in fact they will be actively drawing down their savings. This is likely to cause an inflationary pressure on the economy since there will be less production at the same time that more money is becoming available in the economy. This will create the real problem or rising prices at a time when the economy is shrinking. The fact that seniors will be taking money out of their savings is also a problem since it means that there will be less money for investment. All of that money that seniors had saved over the years for their retirement was invested in stocks and bonds. That money was helping businesses to raise the money they needed to grow. Once that money is no longer available it will be harder and more expensive for companies to find the money they need to grow.