The problem is not the absolute number of people, but the ratio of relatively younger people who work and produce something, and the elderly who already are too frail and can only consume (pensions, medical care, etc).

Japan has now fewer productive workers per elderly person than most developed countries.

Even if the birth rate suddenly tripled, it wouldn't solve that issue for at least a generation. There's going to have to be other solutions, maybe in the form of automation/robotics/etc in conjunction with societal/economic changes. I wouldn't be surprised if the older population resists necessary changes and exacerbates the problem, though.

Solving in a generation is fine if it starts now. GP is talking about a projection 100 years out.

A change to immigration policy could solve the issue within years, but Japan seems like the least likely nation to embrace that approach.

==Japan has now fewer productive workers per elderly person than most developed countries.==

Maybe, over the long run, we could change the expectation that elderly people can't be productive. Perhaps eliminating 20% of the workweek will allow people to maintain careers that are longer? The need to race towards retirement may lessen if we ease the burden of our weekly work schedule.

A lot of elderly Japanese already keep working well into old age. Some do it for health reasons (physical and mental), financial reasons, or out of something like civic pride/need to contribute to society. The problem is the sector of jobs that elderly people can't do.

It's just biology. People in their 70s and older are very likely to have physical and/or cognitive issues that substantially reduce their potential productivity. This is one of many reasons we should prioritize preventing and repairing the effects of aging, but until that happens it's going to be a problem.

It's just fear mongering, maybe they are like 10% less productive every decade-group after 60 on average, but it's hard to tell considering people leave the work force at 65. I'd wager that they are more productive on average than 20-30 year olds unless they have dementia.

Having an older population is only a problem if want unskilled labor to remain cheap relative to it's social value. The whole world has seen from America that relying on an immigrant underclass creates too many negative externalities for the price saved, I doubt Japan will copy this plan, they will just bite the bullet, pay more, and then act surprised when NEETs decide to work.

I don't see many of my 40-ish age who live healthy enough by exercising, going to work by bike or walking instead of car, so they can still be active, let alone productive when they enter retirement age.

I'm not sure I follow your comment. It's possible that AI will change the idea of who can be productive, just as the internet has changed the idea of who can be productive (people with limited mobility, for example).

Oh the productivity fallacy. AI making your job easier and saving you an hour a day doesn't mean that you'll spend this hour to do sport or even be able to use that hour as you please. We have cars (after trains, bicycles and horses) to get faster from A to B but at the same time the commute to work has grown. Many machines have been invented over the last millennia, yet we use this gain in productivity not to have more leisure time but to enforce consumerism onto the workers.

The problem isn't that companies are "afraid of not growing", or governments are "afraid to cut spending", it's that they've already signed off on paying back loans over the span of decades and were expecting to be able to pay off those loans with the value created by a growing population.

It's less about fear and more about economic realities.

Western governments hardly operate on a shoestring budget, rather they've spent generations spending profligately with the assumption that massive sustained economic growth would bail them out without having to make any hard tradeoffs. That strategy has worked out ok so far but it has always been a fragile one and we might be entering an era where it fails to work in many places.

The transition to much lower deficit spending certainly won't be popular and might go catastrophically poorly. I actually think there's a pretty good chance that things will go quite poorly, but there's no reason it has to be so.

> there's no reason it has to be so.

Besides basic human nature.

Well, mainly the majority of wealth is being focused in the hands of a minority of private individuals and corporations which rather hamstrings the budget.

What currency are the loans denominated in?

If they are looking at a large aged population (lots of retirement savings) and lots of debt, inflation seems like an obvious solution, right? People not working will take a QoL hit due to their savings being worth less. But that is… what it is, I guess.

A lot of Japanese videogames seem to be set in a sort of pseudo-post-apocalyptic sort of setting (Final Fantasy comes to mind), where it isn’t like… mad max raider stuff, but it is clear that society once was larger and more developed, and now things are diminished with some remnants. I’m wonder if their population dynamics inspired that.

WWII is a much more likely inspiration.

The population more than halving in the next century causes issues for normal people with expenses of supporting aging population and maintaining infrastructure with an ever dwindling percent of the population working age. There are some benefits to lower populations but also significant practical drawbacks to working class people.

It's not great if it's 15 million supporting 35 million children, elderly and sick.

Here's a case where robotics and other innovations can help out.

A diaper changing robot would take care of both ends of the spectrum, young and old.

Changing baby diapers everyday for a year and knowing the process and at the same time looking at the video of state of the art robot moving parts between shelves I'm pretty sure that this solution is in a Sci-Fi (or Sci-Fi-horror) realm for a long long time.

What percentage of the 50 million will be old people?

40.4%

When populations age and shrink, everything becomes more difficult.

Fewer working hands have to support more elderly retirees.

Less spending means less development, less maintenance, things break down and nobody can afford to fix them. Entire towns and villages slowly wither into nothing. It’s a long, slow, grinding, painful process with no other way around it.

And it’s easy to say “maybe that village should disappear” when it’s not your village.

It's not sustainable. Immigration would help but from what I've heard, it seems that Japan isn't very immigration positive overall.

It's not about the amount of people but your population pyramid. If your population halves, expect a lot of pain. Especially for the elderly.

Especially for something like Social Security safety nets, which relies on a larger younger population paying into it. I'm not sure if Japan has an equivalent but I think they do.

This is a great argument for individual retirement accounts rather than using the young to pay for the elderly. In the United States, if everyone's social security tax were put in an index fund, then everyone would be millionaires upon retirement.

There are solutions other than pleading with people to have more kids.

While I'm skeptical of the current state of Social Security, this doesn't quite work. The dollars in your account are useful only to the extent that there is stuff being produced that you can buy with them. If your population is mostly retired people, there's not going to be much stuff and prices will be bid up rapidly. So great, there's $10 million in your private account, unfortunately your home nurse costs $2 million a year.

Numbers in a database, whether they are in the millions or billions or trillions, don’t mean anything unless there are sufficient things/services to buy.

I think you also generally need an exponentially increasing supply of working people in order for the economy to grow exponentially.

The idea behind OASDI (Old Age, Survivors, and Disability Insurance), more commonly known as Social Security, is not that you retire a millionaire.

It's the US government saying "since we are a wealthy nation, we will not let you spend your elderly years destitute."

That's it. That's literally all it is. It was meant to keep grandpa from being a burden on his family when he was too old to work, which in the 1930s meant when you were too old to do actual physical labor.

Since then the American public has seen it as a nice little bonus they get for living past 65 and has started stealing from younger generations in the form of sovereign debt in order to maintain that instead of treating it like the insurance policy it actually is.

==Since then the American public has seen it as a nice little bonus they get for living past 65 and has started stealing from younger generations in the form of sovereign debt in order to maintain that instead of treating it like the insurance policy it actually is.==

Social Security has it's own funding stream, a tax on wages earned. It does not add to the deficit or increase borrowing. If the funding dries up, the benefits are reduced. This is the Social Security cliff we hear about all the time.

But there's only so many dollars you can pull from a wage earned. A dollar pulled for OASDI is a dollar that can't be pulled for anything else, and the person earning said dollar will express dissatisfaction at the ballot box if you try to make up for that by taking another dollar.

A retirement bonus (which is what OASDI is for millions of retired Americans) costs more than a retirement insurance plan, because one gets drawn from by everyone, while the other can simply be denied if it isn't strictly necessary for the person trying to collect the benefit.

A more expensive program requires more tax revenue to administer, revenue that could be used on anything else. Since we haven't had a real national discussion about federal taxes in 30+ years in the US, we now take the spending that would be funded with the tax revenues that could be freed up by a less-expensive implementation of retirement insurance - one that's treated as actual insurance - and instead fund it with deficit spending.

==A more expensive program requires more tax revenue to administer, revenue that could be used on anything else.==

More complexity is what makes programs more expensive to administer, not size. You are suggesting adding significant complexity (actual insurance) to what is currently a relatively simple program.

There are lots of things that make it more complex. For example, actual insurance requires you to continue paying in each year to get a benefit. Currently, I can take a year off from working and it has minimal impact on my SSI benefits (as SSI just takes and average index of your 35 highest earning years).

In the end, it is a matter of the amount of labor done by the future generation to support the previous one, vs the amount they do for themselves, right? I mean, we can account for it however we want, but if every elderly person was a millionaire, I guess we’d just have… very high demand for the types of doctors that serve the elderly.

The money doesn’t take care of people, people paid by the money do.

I do already put money into a 401k. I will likely be a millionaire before retirement, assuming no major catastrophes and steady employment in jobs that pay at a similar level (adjusted for inflation) before then.

I don't know if the same would be true for most people, though (I make significantly more than the average household income -- although probably less than a lot of people here because I'm not making Silicon Valley money -- and I don't have children).

It's an interesting idea worth exploring, but I'm not sure if just switching social security money to retirement accounts would be sufficient.

Administration and making sure people don't dig into them before retirement would potentially be very expensive too (although to be fair, I'm sure Social Security administration costs are very high also).

Are you aware of any studies that analyze such a solution? I imagine there must be something out there.

every social safety net in every country needs to be funded somehow and a shrinking population means more debt to take on or higher taxes on existing workers. nothing is free.

Yeah that was kind of my point. That's why it's better if there are more younger people to contribute than elderly people. If there's less, then the burder is greater on individuals.