There are a lot of things taking place in the world. Many are making forecasts about what will happen. While predicting the future is very difficult, there are some things we can incorporate into our analysis that can tell us where things are heading.
One of the biggest issues is that of demographics. This is a little watched field especially as it pertains to economics. Unfortunately, the situation is rather dire.
We also live in a world of a lot of misinformation. Have you heard about the population problems? Of course. Since the 1970s, we were told the population was getting out of hand and we would end up reproducing to the point where people would be starving to death.
Sadly, for anyone keeping this viewpoint, it is completely wrong. To start, we have less starvation than we did three decades ago. We now produce enough food to feed the entire planet. Hence, we do not have a food production problem but, rather, one of distribution.
That said, the population problem is not from too many people. Instead, we are confronting a path where underpopulation is the biggest problem facing us. This is something clear as day for anyone who is willing to look.
The biggest factor is fertility rate and almost every developed country is under replacement rate. At the same time, the two largest nations in terms of population, China and India, are both below it. The former is going to be highlighted in this article.
Demographics are predictable. This is something that we can forecast out because, if you are low of 20 years old, then in 2 decades you will be short on those who are 40.
So let us take a look at what is going on.
The Next Japan
Everyone is aware of the situation in Japan. That country has the lost decade (actually 3 but who is counting) due to their demographic decline. This is a problem that gets worse with each passing year. It is a reality that once a woman leaves child bearing age, she no longer can add to the population. This only compounds the problem as Japan found out.
With that, here are countries that are waiting to die.
Germany
THis is a bad situation. When we look at the demographic tree of this country, it is ugly. There is no economic model for what this nation is facing.
Let is start with a look at the chart.
Source
It is interesting that someone made a note on the chart detailing the problem. Notice how tight it is at the bottom. There are going to be a lot fewer people in this country by the middle of the century.
There is another problem. Look at the most populous range: those in their 50-60s. Here we have a group of people who will all be retired by the middle of the next decade. Thus, they are out of the workforce, not producing, reducing their spending, and drawing in social benefits.
How is the country going to pay for them? Obviously there will be much smaller tax base to draw from.
This is why Germany is trying to import immigrants. This is an issue since assimilation is not something most of these European countries excel at.
Russia
It is rather ironic to see the Russians and Germans bickering over energy since they are both in the same boat. The reality is both countries are screwed.
Russia is better than Germany only in that it has a bit more time. In this regard, they run about a decade behind but end up at the same point as the Germans.
Source
Russia would have until around 2050 before they encounter major issues as compared to today. That would be under normal circumstances. With Russia, things are anything but normal.
A challenge for them is the baby bust they had after the fall of the Soviet Union. The last Soviet children are now in their 30s. This means that the numbers get a lot slimmer after that. It could explain why Putin was forced to make a military move now. In another 10 years, Russian will be unable to field troops unless they want to send a bunch of 40 year olds into combat.
There is another problem facing Russia: men do not have great longevity. The average life expectancy of a Russia male is around 60. Notice how the men start to be dwarfed by the women as they proceed through their 50s.
What this means is that many of the male side of the chart, between 35-50 today, will be gone in the next 20 years. The early 2040s could see a problem for the Russians.
China
Here we have another country that could be in a lot of trouble by the middle of this century. Certainly, when we are dealing with a population of over 1.3 billion people, there is plenty of room to negotiate.
Unfortunately, demographics can be unforgiving.
This is what things look like for the Chinese.
From a population perspective, this is China's heyday. It only gets worse from here. Once again, add 20 years to the chart, putting us in the 2040s, and things look bad.
Things do not get better after that. If we focus upon the group just entering child bearing age, we see a lot fewer women then in previous generations. Hence, even if the birthrate stays the same, the fact there are a lot fewer females means the population is going to encounter issues.
This Is How Countries Die
Countries need people to remain economically vibrant. No matter what the system, consumption is required. At the same time, those who are exports, like Germany and China, will only find it more difficult to remain competitive as their populations implode.
If you have less people, that means an increase in exports is required. This is problematic if the rest of the world is facing a similar situation. With the demographic issues most of Europe has, are they going to want to increase the goods they buy from Germany? Not likely.
These countries are basically dead on their feet. It is interesting to watch the media and how they frame them. This gets to be downright humorous when looking at the situation. Often, when I see reports about the future of these countries as powers, I ask "how?".
We all heard of zombie corporations. Perhaps we start to apply that term to countries.
This his literally how countries die, at least on a global perspective.
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