Has Bernanke Swallowed the Kool-Aid?
I had always assumed that Ben Bernanke was a moderate economist until he was appointed to be a governor at the Fed. Even as Bush’s chief economist, he never seemed to descend to the hackdom of Mankiw or Hubbard. Now, he seems to have swallowed the Kool-Aid, picking up the theme of the Social Security Crisis.
“In coming decades, many forces will shape our economy and our society, but in all likelihood no single factor will have as pervasive an effect as the aging of our population. In 2008, as the first members of the baby-boom generation reach the minimum age for receiving Social Security benefits, there will be about five working-age people (between the ages of twenty and sixty-four) in the United States for each person aged sixty-five and older, and those sixty-five and older will make up about 12 percent of the U.S. population. Those statistics are set to change rapidly, at least relative to the speed with which one thinks of demographic changes as usually taking place. For example, according to the intermediate projections of the Social Security Trustees, by 2030–by which time most of the baby boomers will have retired–the ratio of those of working age to those sixty-five and older will have fallen from five to about three. By that time, older Americans will constitute about 19 percent of the U.S. population, a greater share than of the population of Florida today.”