WELCOME TO THE ECONOMIC COLLAPSE:DEFLATION AND AGING
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Acts have consequences. This elemental truth often escapes from memory in rights societies.
Health has come a long way: it is hard to say this in times of a pandemic, but the life expectancy of the population is higher than ever, and medical advances have spread throughout the globe.
Less mortality and more longevity.
This medical feat, no doubt celebrable, has consequences for the economy; and they are not what you think.
I am not going to talk here about pension spending, or the cost of healthcare, but about the tendency to deflation caused by aging societies.
Let's think about it this way: Marcelina and Juan are both 80 years old. They have had three children, whom they have managed with great effort.
Let's review how his life has been, similar to that of many others.
Marcelina and Juan marry when they are 20 years old, work and pay for a house. They have 3 children, and between that and the letters on the floor, the expenses multiply.
They must work hard. Multiply the income to meet the many expenses.
What happens now? When are they 80 years old? After a lifetime working, they now collect their pension. This is considerably lower than the income received in assets, so that their income decreases; Luckily, the expenses have also decreased, since their children no longer represent a cost-they are pulling-and the floor is already paid.
Marcelina and Juan have less income and less expenses.
What can we conclude here? An aging society will stimulate less demand than vigorous young societies. In fact, one of the patterns that has been followed in the history of the economy is that it grows at the same time as the population.
What happens if people demand less goods? That there are fewer products to offer and economic activity is depressed. That is why the aging of societies pushes them towards deflation.
A nightmare that tortures politicians around the world.