Monday, October 18, 2010

Longer lives, greater debt?

Life expectancy throughout the developed world is up. So are the costs of supporting the aged. That's the thrust of a New York Times article explaining how current state-sponsored pensions and health-care spending will be unequal to the bills run up by populations that stay old longer.

Several reforms are discussed, all of which are easy to state and none of which looks easy to implement in the short term: raising the retirement age, increasing opportunities for older people to work, finding cures for Alzheimer's and other age-related diseases, and decreasing the amount governments spend on health care.

There's also the glass-half-full school of thought:
[S]ome governments and companies may need attitude adjustments so they can view aging populations not as debt loads but as valuable wells of expertise.

“I rather dispute your calling it a problem,” said Lady Greengross when I called to ask her how governments could better handle global aging. “It’s a celebration.”

As one example of how to embrace aging populations, she cites an equality act, recently passed by British legislators, that prohibits discrimination against older people (among others) seeking goods and services like car rentals or mortgages. Separately, she says, Britain next year will eliminate its default retirement age of 65, allowing people to remain in the work force longer.
Baroness Greengross is " a member of the House of Lords in Britain and chief executive of the International Longevity Centre U.K in London." She should, therefore, know more about aging and the aged than I. Yet I can't help thinking she missed the boat here. She is cheerleading for us all to adopt a better attitude toward the elderly. That's a lovely prescription for how you should treat your grandparents. What does it have to do with the problem of ensuring that their state-provided income and health care expenses don't bankrupt your country?

To be a "valuable well of expertise," a person has to possess skills or other knowledge that are in short supply. Given how quickly the world has been changing, the older you are and the further you have gotten from your days in the work force, the less expert you are likely to be today.

As for that "equality act," of what earthly relevance is that to this discussion? Discrimination on the basis of age is to be discouraged, but I rather think the problem we're going to face -- and the one we certainly face right now -- is that we won't have enough jobs for people who haven't reached current retirement age, much less enough for those who have.

At the rate we're going in the United States and Europe, I don't see the "elder quake" ending well. It's going to be a wrenching shock because until external forces (read: your country's creditors) decide your nation can afford no more, your government is going to avoid the problem of how to pay its elder-related costs.

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