I've been listening to everyone talk about the impending crisis of the Social Security System that will result from the gradual retirement of the baby-boomers, and I've read the latest
GAO Report that declares solvency to 2042. What I wanted to see for myself was just how big this post-war population explosion really was.
So I looked up the population data and made a few simple charts.
In fact, the per capita birth rate was actually higher between 1915-1925 than the period that followed WWII. What's even more important, is that per capita of the workforce 65 years later, it measures higher as well.
See charts and more discussion after the fold:
The first graph is the straight data on the number of births per year available at the CDC. This
pdf and it's
companion are rather large, but they are a treasure trove of data on everything having to do with vital statistics from 1900-1960. The remaining years are broken out in smaller pieces
here.
The second graph is a weighted per capita number based on births per 1000 population. The data is from the same vital statistics source at the CDC website. What is apparent here is that the percentage of the population having children following WWII was not unprecedented.
Still, the actual number of children born in relation to the number of workers that are around to support the system when they retire is what is really important.
So, in the third graph, I've turned the clock ahead, and measured the births from those same years against the workforce 65 years later.
The years are from 1980 to 2066. Projections of future population data were obtained at the Census Bureau here. The Y axis is a percentage number that is derived from dividing the actual number of births 65 years earlier to the number of people in the workforce the year they reach retirement age. The number of people in the workforce was taken from the excel file available here. This is also a great summary page of statistics. I'm using 65 as the retirement age for sake of simplicity.
What this clearly shows is that in 1980, we had a larger number of retirees entering the beneficiary population per worker paying into the benefit pool than we will have in any year in the future.
The year 2000 saw the most sustainable ratio, but it was only a pause in between two demographic surges. It may seem that we are headed up a mountain, but its peak is not any higher than the one we already successfully climbed just 20 years ago.
Of course this ratio is just one factor and there are plenty of more in depth studies like GAO-03-907 Social Security Reform: Analysis of a Trust Fund Exhaustion Scenario that go more in depth on the cumulative effects of more complex demographics and income projections.
But what none of these studies addresses is what really makes our situation today any worse than the one that we faced in 1980. They only focus on the impending baby-boomer retirement, and neglect to figure out how we dealt with the similar demographics of the late 70s and early 80s.
We can't let the Grover Norquists, with their hand-trimmed statistics, fail to respond to this important question from the reality based community, where we don't like cropping charts to a point that is convenient to our argument.
If there is one thing that the 70s should show us it is that when you have a demographic retiree bubble approaching, deficits do matter. They matter a lot. We got through it then, but shouldn't we learn from the inflationary bumps that were in that road?
(updated 12.13.7:30EST, responding to some great points in comments)