America's aging, somewhat unhealthy population has created many challenges
The word tsunami has become popular when describing disasters of any sort, so it could be said the United States faces numerous “economic tsunamis” in the coming years and decades. Let’s explore these potential major disasters and see what can be done to avoid them or at least lessen their impact.
Student Loan Tsunami
According to a study by the Pew Research Center in 2010, 19 per cent of American households have student loan debt (about one in five), an increase of four per cent in three years. Moreover, student loan debt has doubled since 1995 and, according to a report by the Federal Reserve Bank of New York now approaches one trillion dollars, a total similar to total credit card debt, estimated at upwards of $700 billion.
This increase in student loan debt is exacerbated by the rising cost of college tuition and an inability of students to find gainful full-time employment after graduation. And low-income people, as a whole, have the most debt. Since they have less money to begin with, they have less to pay for debt.
It’s all about jobs. Isn’t that the refrain people hear over and over again? In order to prevent this tsunami from swamping the U.S. economy, many more jobs will have to be created so students will have the means to repay their student loans. Without these jobs, millions of students could default on their debt, sending the economy into a tailspin.
The Baby Boomers are getting on in years. (Americans born from 1946 through 1964 comprise the Boomers.) According to a University of Alabama at Birmingham News Archive, written in December 2010, the number of people 65 and older will double between 2010 and 2050, and nearly one in three Americans will be over 50 by 2012. Dubbed the Silver Tsunami, this massive wave of “cotton tops” will require billions of dollars of healthcare, particularly in geriatric specialties, the numbers of which have never been seen in the U.S. or any other country in the world.
According to the previously mentioned archive, there are currently 7,000 geriatricians in the country but a total of 20,000 will be needed. Many other healthcare professionals will be required in great numbers as well. And social organizations will be needed to help keep them occupied and involved, as Baby Boomers, in general, are a take-change bunch of folks.
Interestingly, the last of the Baby Boomers will not die until about 2080!
Just how much money this tsunami will cost is anybody’s guess, but expenditures by Medicare and Social Security will certainly increase dramatically. Japan, Germany and China also have aging populations. Perhaps the U.S. can develop strategies from these countries and vice versa.
Many Baby Boomers suffer from the ravages of Alzheimer’s dementia (AD), an often fatal disease, for which there is no known cure. It’s estimated that one in 85 people worldwide will get AD by the year 2050. In the U.S. the cost of AD could be as much as $100 billion per year. The Met Life Study of Alzheimer's disease conducted in 2006 estimates that in the U.S. it costs between $18,000 and $77,500 per person per year to treat AD.
Estimates vary, as they always do, but as many as 5.1 million people in the present era may have AD in the U.S., and as Baby Boomers age this number will almost certainly increase dramatically. Better medical procedures could lower this number in the future and perhaps lower the cost of treatment as well. An outright cure could reduce costs too, of course. Perhaps we’ll be so fortunate!
Be that as it may, barring major scientific advances in AD research, the cost of AD treatment will certainly constitute a tsunami of monumental proportions!
According to reports by the Weight Control Information Network, over two-thirds of the adults in the U.S. are overweight or obese, with over one-third being obese. Obese people have an excessive amount of adipose tissue, commonly known as body fat. Moreover, about five per cent of adults are considered extremely obese.
Also, according to these reports, the medical costs for overweight or obese people are greater than for those people with no weight problem, on the average about $1,500 per year more than people with no weight problem.
It doesn’t take a statistician, scientist or medical doctor to figure out that if millions of people in the U.S. don’t start lowering their body weight, the costs will be astronomical. Per an Internet article for HealthDay, obesity costs the U.S. $147 billion per year. (Another study in USAToday.com lists the cost at $270 billion.) Since the population of the U.S. doesn’t seem to be getting any thinner any time soon, this rise in health costs certainly amounts to a weighty mass about to crush us all!
During the Great Recession and moving forward, many states and municipalities have had trouble paying for pension fund obligations. This problem mushroomed in 2012, when pensioners all over the country were asked to take smaller pensions so governments could remain solvent or at least avoid bankruptcy. Stockton and San Jose California, as well as Providence, Rhode Island, have struggled with this dilemma: How do you pay for public obligations when revenue is short?
According an article in The Daily Journal, San Mateo County’s homepage, published in January 2012, California, the most populous state in the country, and mired in billions of dollars of debt for many years, owes half a trillion dollars in unfunded state pension liabilities. Throughout the state, pensioners are being asked to settle for less, or many public pension funds could go bust in the coming years.
One possible solution to this problem is for these government entities to raise taxes and fees in order to boost revenues, but doing so during tough economic times is a difficult pill to swallow for many folks throughout the country.
Perhaps the only way to confront these economic tsunamis is for the U.S. to return to the halcyon days of the late 1990s, when deficit spending had disappeared and unemployment stood at four per cent. It appears certain that anything less than a robust, revenue-rich economy will be squashed to a pulp by these monstrous waves. So let’s work toward better economic times. If you can, start a business. It’s the least you can do!
Then again, even a thriving economy won’t defuse all of these horrendous debt bombs and other potential calamities. Lots of hard work will be needed to beat even some of them. Are you ready for the challenge?
Please leave a comment.
© 2012 Kelley Marks
Kelley Marks (author) from Sacramento, California on January 27, 2013:
Thanks for the long comment, conradofontanilla. I'm sure some things can be done to deflect or eliminate these dreaded tsunamis, but Kaiser Permanente certainly doesn't have the answer. They simply throw pills at you and then take your money. Sorry. Later!
conradofontanilla from Philippines on January 26, 2013:
To solve these tsunamis, one must identify the tsunami that belongs in the turf of the Federal Reserve Bank or that belongs to the presidency. It will be recalled that the Fed governs monetary policies, a big lever that is out of the hands of the president. Don't blame all economic snafus on the US president. Most Americans are powerless against the Fed because members of the board are not elected.
One effective cure for an outstanding loan with no prospect of being paid is to write it off. Under the floating rate system that is easy because gold deposit for every dollar is not necessary. New money is created by means of an entry in the book of accounts. A loan is new money.
There are now cures of Alzheimer's that may be caused by aluminum fibers. Chelation therapy will remove aluminum. Red, blue and purple fruits and vegetables chelate aluminum but Big Pharma will not promote them. Neither the FDA will. Neither conventional medicine will.
Obesity can be remedied by change in lifestyle, particularly diet. Blame that on fast food chains. The Kaiser Permanente hospital has its own stalls to supply patients with fresh fruit and vegetables.
A personal debt is different from government debt incurred through government deficit budgeting. A balanced budget shrinks the economy. Deficit budgeting expands it. What is needed is judicious deficit budgeting.
Kelley Marks (author) from Sacramento, California on October 10, 2012:
Thanks for the comment, carol7777. All of these problems could break the bank, if you will, and all five could be a catastrophe. Let's hope for very good leadership and judgment in the coming years. Later!
carol stanley from Arizona on October 10, 2012:
Pretty scary outlook for the future. You said it well and we do have reason to be concerned..We hope problems will create solutions. Thanks for this eye opener. Voting up and sharing.