Our major public policies are based on the assumption that America will continue to enjoy growth. Economic growth and population growth.
Through most of our history, this assumption has proved to be correct. These days, not so much.
Last week, the Commerce Department announced that the gross domestic product shrunk by 0.1 percent in the fourth quarter of 2012. And the Census Bureau reported that the U.S. birth rate in 2011 was 63.2 per 1,000 women age 15 to 44, the lowest ever recorded.
Slow economic growth and low population growth threaten to undermine entitlement programs like Social Security and Medicare. Despite contrary rhetoric, they are programs in which working age people pay for pensions and medical care for the elderly.
When Medicare was established in 1965 and when Social Security was vastly expanded in 1972, America was accustomed to the high birth rates of the post-World War II baby boom. It was widely assumed that the baby boom generation would soon produce a baby boom of its own.