Demographics and Government Debt Destructive Forces That Will Compound World Challenges

Over the last few decades, changes in demographics have played a major role in the shaping and direction of developed world economies. Developed nations like the United States, and Japan, after years of middle class growth and wealth creation, are now struggling to fund the increased costs associated with an aging society.

To compound these demographic issues, they are occurring at a time when the world finds itself in the midst of a global economic slowdown.  The demographic burden will add a great strain to economic growth prospects and the ability of the governments to respond to economic crises, given their obligation on pensions, healthcare and other social programs.

As populations age, the base of taxpayers to support them must grow in proportion, or otherwise face huge obstacles to meet obligations. Unfortunately for most developed countries, this will not be the case and as a result already over indebted governments will need to incur more debt to pay for increased social obligations.

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