The Greater Depression Will Be Magnitudes Worse than ’30’s Depression…Here’s Why

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by Chris Hamilton

 

In 2008, the US Census Bureau projected strong population gains through 2050 helping to drive growing consumption and US economic growth.  The projected population growth was generally balanced across age segments primarily driven by gains in young Hispanics due to higher birth rates and immigration.  But in 2012, in a story here the Census acknowledged that these were bad assumptions as these trends were not continuing, as had been expected.  In December of 2014, again here, the US Census affirmed and further downgraded it’s population projections from 2012.  The Census now anticipates a 32% reduction from it’s previous 2008 projections for US population growth from 2015 to 2050 (or about 36 million fewer Americans…chart below).

The US is still projected to grow by 77m but significantly less than the previous estimate of 113m.  95% of the cuts to the population growth are in the under 45yr/old population.  As the chart below highlights, the cuts among the 0-24 and 25-44 populations were massive…the change in growth among the 45 and older miniscule.

The chart below highlights the reductions in population growth across the age segments, and as mentioned above, the 0-24yr/old population growth was slashed by 76% or 24 million fewer youth and 40% fewer 25-44yr/olds.  That this isn’t front page news is, I suppose, a sign of the times.  GDP and potential economic growth estimates weren’t ratcheted back to match the huge slowdown in young vs. continuing growth among older populations.

Although the Census doesn’t exactly say it, the numbers (chart below) show clearly that the primary number downgrade 2050 downgrade is due to the US Hispanic total population being cut by 21% based on decelerating birth rates and immigration (total 2050 est. #’s slightly off from above due to rounding and differing sources w/in Census data).  All kinds of reasons for those changes, however that’s not my point here…the economic impact is.  Absent a growing young population…the economic slowdown will move from the bottom age segments up.  Toy companies, school districts, then colleges, and onward and upward to declining demand for cars, houses, etc.

For those wondering when economic growth will be getting back to normal…the US Census has made it clear there is a new abnormal…in the new abnormal population growth is among the old and flat among the young, wage growth is next to nil, and the only hope for those awaiting “trend” growth is another doubling or tripling of credit / debt every seven years or so to move the needle along.  Never mind that’s pretty much next to impossible without the wheels coming off the cart.

And for those curious, even during the great depression, there was generally continuing population growth among the young to maintain rising consumption…but this time around in the Greater Depression, the world faces overcapacity, too much debt, and declining flat to declining young the world over (except Africa) only offset by the liability that is the rapidly rising older population.  For those believing the rest of the world will carry the day here is an article outlining the breakdown of population growth worldwide (again, except for huge gains in Africa).

Welcome to the new abnormal which the Fed, Federal .Gov, nor Wall St. will ever acknowledge.

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