Aging Population Poses Global Challenges

[papau]

http://www.washingtonpost.com/wp-dyn/articles/A55582-2005Feb1.html

washingtonpost.com
Aging Population Poses Global Challenges
Health Care, Other Rising Costs to Strain Budgets in U.S. and Abroad
By Jonathan Weisman
Washington Post Staff Writer
Wednesday, February 2, 2005; Page A01


When President Bush delivers his State of the Union address tonight, his prescriptions for Social Security are likely to vault that issue to the front of the nation's political agenda. But Social Security's financial problems are a relatively small sliver of the far larger challenges posed by an aging population, economists say.

From untamed health care programs to military pensions, housing and heating assistance to coal-miners' benefits, programs for the elderly have proliferated and grown more generous, even in the face of an aging trend that demographers have long seen coming. In that light, the fight over Social Security marks only the beginning of a national debate over the cost of a graying society -- and the inevitable reallocation of resources that is sure to produce winners and losers, in the United States and around the world.

"The question is whether we can support the elderly with a decent standard of living without imposing a crushing burden on the young," said Richard Jackson, director of the global aging initiative at the Center for Strategic & International Studies. "Whether we can is a real concern."<snip>

The bulk of that growth is spending on the federal government's two largest health care programs, Medicare and Medicaid. Their combined costs are projected to more than double, to a combined total of $1.2 trillion in 2015 from $473 billion last year. Social Security spending is expected to rise to $888 billion from $492 billion in that span.<snip>


China, seen by some as the rising economic power on which other countries will be leaning by mid-century, will be grappling with a demographic problem of its own. By 2040, 28 percent of China's population will be at least 60, a higher percentage than in the United States, and because China has a thin social safety net, the burden of an impoverished elderly class could be especially acute, according to a CSIS study on China's aging problem.
Those countries' misfortunes will be shared by the United States, according to the McKinsey Global Institute, the think-tank arm of consulting firm McKinsey & Co. Since the 1980s, spendthrift Americans have forced U.S. companies to turn to the savings of other countries, especially Japan, for the capital needed to expand and improve productivity. But as people in those lender countries age, they will be spending their savings and making claims on the debts the United States owes.<snip>