It Misses the Question

Ben Wattenberg wrote about demographics as a cause of our “entitlement crisis” in a recent Wall Street Journal op-ed.

As he pointed out, birth rates are falling drastically in the nations wealthy enough to have an entitlement régime.  Contradictorily, that’s a normal result of the development of widespread wealth within nations.  For a variety of reasons—delayed marriage, increasing education, increasing incomes, more effective means of birth control, lower stigmatization of terminating pregnancies, and so on—birth rates in developed nations have fallen below the replacement rate needed simply to maintain their existing population levels (generally, 2.1 births per woman).   The birth rates in Italy, Spain, Greece, Eastern Europe, Russia, the former Soviet republics, and South Korea, for instance, are all below 1.5.  Japan’s rate is a potentially catastrophic 1.2.  The US rate, at about 2.0, still isn’t quite high enough to maintain our own population; although until the current economic failures, we could count on immigration to make up the shortfall.  Sort of.

All this adds up to not enough people are entering the labor force to pay for the existing entitlements.  When the US’ Social Security entitlement program was created 75 years ago, there were 7 people in the labor force for every retired person, and that retiree could count on living about 6 years in retirement.  Today, the number of people in the work force is  around 2-3 (and falling), and the retiree being supported can count on living around 35-40 years in retirement (that longer support duration is a demographic that Wattenberg doesn’t mention).

This certainly does emphasize the proximity of the crisis that’s upon us.

Wattenberg identified two current solutions to this: cutting the entitlements or running massive deficits.  He then offered what he thinks is a better solution.  Harking back to the ’60s and ’70s worries about the population bomb and the meme that we need to reduce our birth rates, he wants a similar program, this time preaching the opposite: our new parents need to have more children.

But Wattenberg misses the crisis’ cause.  It’s not that birth rates are too low, or that there aren’t enough new workers entering the system to support the entitlement economy.  That argument proceeds from a false premise.

The real answer, the individual liberty- and responsibility-preserving answer, is to eliminate the entitlements and privatize them, instead.  It’s as wrong for government to try to “influence” the family timing and size decisions of free men and women as it is for government to try to “influence” any other family-related decisions made by free men and women—or any other decision founded in individual conscience.

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