Question by Tee: Aging population: good or bad for the economy?
Like we all know, the Chinese population is aging very fast (because obviously, the Chinese can only have 1 Children per couple?). Is this good or bad for the economy. We have all these people age people who dont work but still have to eat, and use resources; most of them would have retirement savings etc. So, i would think it would be good for the economy. But at the same time is bad for the economy because when the population shrinks, the economy shrinks as well. What do you think?
Answer by Paul E
well it depends on the economy your talking about? when it comes to the Chinese, most of them probably have little retirement savings, but as far as i know they dont have pensions either.
Countries like the US and Australia. are concerning to me, as Australia i know has 4 Million Baby Boomers retiring. and i think America has something like 100 Million. (i think) . most dont have enough 401K / Superannuation. so to provide all those people with pension the US would have to come up with 1 Trillion each month and Aus has to come up with 4 Billion. both of these amounts is money that the governments cant afford to provide. So i can only see the Pension system collapsing under the weight of expense.
the other thing is the 401K and super, these are invested in the stock market. which relies on a balance of buying and selling to remain level. now when a retiree withdraws benefits the company sells stock to pay for the withdrawal. now what do you think might happen when 100 Million + people withdraw benefits. sounds like a lot of selling on the market. this may cause a major crash of the markets world wide.
Thats what i would be worried about
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