Will Population Aging Push Us over a Fiscal Cliff?
The share of the US population age 65 and older is rising dramatically. In the year 2000, 12 percent of the population was over age 65; by 2050 that share will be 22 percent. Much of that aging has already occurred: in 2022, just over 17 percent of Americans are retirement age. Population aging is applying upward pressure on government deficits as a result of increased public spending on programs, including Social Security and Medicare, that are designed to support older Americans. I argue that broader distributional measures assessing who pays for and who benefits from age-related government programs, both across and within generations, are necessary to inform policy decisions. However, in addition to direct aging-related government expenditures, I argue that unfunded spending in other, non-aging parts of the budget along with recent tax policy changes portend significant intergenerational redistribution. These distributional impacts should be measured and taken into account by lawmakers who seek to address looming fiscal challenges in a more equitable way.