Why More Immigrants Are An Answer to the Coming Boomer Entitlement Mess | TPMCafe
Fed Chair Ben Bernanke this week listed the choices. "To avoid large and unsustainable budget deficits," he said in a speech on Wednesday, "the nation must choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above."
Bernanke is almost certainly right about "some combination," but he leaves out one other possible remedy that should be included in that combination: Immigration.
You see, the biggest reason Social Security is in trouble, and Medicare as well, is because America is aging so fast. It's not just that so many boomers are retiring. It's also that seniors are living longer. And families are having fewer children.
Add it all up and the number of people who are working relative to the number who are retired keeps shrinking.
Forty years ago there were five workers for every retiree. Now there are three. Within a couple of decades, there will be only two workers per retiree. There's no way just two workers will be able or willing to pay enough payroll taxes to keep benefits flowing to every retiree.
This is where immigration comes in. Most immigrants are young because the impoverished countries they come from are demographically the opposite of rich countries. Rather than aging populations, their populations are bursting with young people.