Why The Next Recession Will Morph into a Decades Long Depressionary Event...Or Worse

Economists spend inordinate time gauging the business cycle that they believe drives the US economy. However, the real engine running in the background (and nearly entirely forgotten) is the population cycle. The positive population cycle is such a long running macro trend thousands of years in the offing that it's taken for granted. It is wrongly assumed that upon every business cycle downturn, accommodative monetary and fiscal policies will ultimately spur greater demand and restart the business cycle once the excess capacity and inventories are drawn down. However, I contend that the population cycle has been the primary factor in ending each recession...and this most macro of cycles is now rolling over. Without this, America (nor the world) will truly emerge from the next recession...instead it will morph into an unending downward cycle of partial recoveries...contrary to all contemporary human experience.

The evidence for my contention begins with the annual change in the 25-54yr/old US population, which peaked in the late 1980's, turned negative in 2008, and has again turned negative in 2017 (this population is presently about 400k fewer than Dec of '07). The impact on employment among the largest and most influential segment of the US economy, the 25-54yr/olds, has been zero net job growth since 2007.

The annual change in 25-54yr/old US population (blue shaded area) rose, peaked in the late 1980's, and went negative in 2008 (& negative again in 2017) vs. annual changes in total full time US employees (black shaded area). The macro core population cycle provided millions of new adults (consumers) and their increased demand restarted the more frequent gyrations of the micro business cycles...until 2008 and again now in 2017. Some may take note that the Federal Reserve cost of money (the Federal Funds Rate, yellow line) generally followed the population cycle, only making some deviations for the business cycle along the way. The ZIRP enabled and encouraged massive federal debt growth (red line).

But the change per 8 year periods of the 25-54yr/old population and total US full time employment turns out to be not so dissimilar. In fact, it's a pretty nice correlation.

Without the growth of the core population (and employment among them), interest rate cuts and debt were substituted to maintain the appearance of growth. The chart shows federal debt, on a per capita basis, against the quantity of 25-54yr/old employees. Unfortunately, real median household income, the increased ability to pay for that debt, has absolutely stalled.

And so, since population growth means so much...two differing views on where this population is headed. In red, the Census and in black, an unbiased view of growth based on the child bearing population, birth rates, and current and future immigration trends.

Why would I feel such confidence in a lowered estimate of growth? Check the '08 Census projection for the 0-24yr/old US population through 2050 (blue line, chart below) and the massive downgrade of growth by the 2014 projection update (red line). And it is still far too optimistic and the upcoming projection update will only further downgrade upcoming population growth, based on the ongoing declining birth rates combined with huge declines in illegal immigration since '09.

But if we widen out to the 15-64yr/old population vs. US full time employees...the chart below details both sets.

Taking a look at the annual 15-64 population growth should be pretty telling. 2008 wasn't a debt crisis...it was an end of an atypical period of abnormally high growth which so many had assumed was in fact "normal".

Charting the change in the core population of the US vs. full time employment. During each downturn in full time employment, the growth in the core population continued and eventually pulled the business cycle to a fresh start. However, as the population cycle slowed the downturns were deeper and recoveries slower due to minimal growth in demand from the population cycle.

Below, focusing from the turn of the century 'til now, the downtrend of core population growth is very plain and the negative impact on the business cycle should also be easily understood. The expected Federal Reserve response is of course interest rate cuts to incent record quantities of new debt...to maintain the unsustainable present. The next economic downturn will see no buoying impact of the core population growth to exit the downturn.

the economy isnt strictly tied to population levels, theres been reductions or growth of population that had no relative effect on the economy, die in a fire for casting doom

Anyway, the chart above makes it plain that the population cycle of the broad core of the US (and in fact, that of the 0-64yr/old population) is now on the precipice of turning Japanese...also known as depopulating.

The next business cycle recession will be unending and is very likely to run years into decades and perhaps a century or more. A declining population already indebted with record debt and zero interest rates will consume less...meaning overcapacity and excess inventories will never be fully cleared before the next downturn...and on and on and on.

But the absence of a growing consumer base isn't just a US issue...this is a global problem. The annual growth of the 0-64yr/old population of the combined OECD nations (most the EU, US, Canada, Mexico, Chile, Japan, S. Korea, Australia / New Zealand) plus China, Brazil, and Russia show the growth that has driven nearly all economic growth has come to an end...and begins declining from here on. And when importers are shrinking, exporters have no one to export to...and on and on and on.

The end of growth is the start of the SHTF scenario in which we now find ourselves. While this situation offers short term nirvana to investors, the economic repercussions are ultimately disastrous.

This is completely unique event in human history

If your theory had any merit you wouldn't be trying to impress retards on Veeky Forums with it.

>If your theory had any merit
Most banks, hedge funds, pension plans, policy makers, ect already know all this

We need command economy. Modern IT makes it possible.

It already exists, it's called central banks

Then why are you trying to impress retards on Veeky Forums?

Why do you have a problem with people making threads?

Please return to /pol/ and/or reddit

TL;DR

bump

TL:DR please.

Capitalism bad!

Capitalism cause depression!

ME no from reddit!

>tfw secular stagnation

This is not Veeky Forums related.

Assuming
>aging of the population
>life expectancy increase

Do you think a scenario in which old-age care becomes the motor of the economy is unlikely?
>more people to take care of, with all the material and human ressources it implies
>increase productivity of those working
>economy relies on a base of net consumers rather than net producers
I'm just throwing shit at the wall here, 3 lines for a whole paradigm shift is light. What I mean is that population decrease, as a punctual event, has never happened in technologically evolved societies (letting aside wars, which are by nature punctual and growth-triggering afterwards)

The societal collapse we see associated from depopulation in history is due to the fact the "survivor" aren't enough to keep the whole thing going.
This time, "survivor" (young ones) output is high enough that one person can have the output of 10 in the middle ages (random number). Also, we think of 67 as old, but by 2030, I'm pretty sure most people will still be able-bodied at that age (already the case in some countries), and technology will make it much easier to have a productive output with a weakened body.

This probably won't be enough for 8% growth, but this now reaches beyond demographic. We can't realistically expect infinite growth be it population or economy wise.

Also, why are they not more threads like this on Veeky Forums? Would be a welcome break from cryptoshills

> Do you think a scenario in which old-age care becomes the motor of the economy is unlikely?

Thing is, unless old age care provides as much demand as a normal working adult, it's going to cause a drop in demand and thus a contraction of the economy. God knows most boomer didn't save enough money to actually live on a decent standard of living once retired.

The way I see it, there's a couple "solutions".

1. Mass immigration, open the floodgates and admit enough immigrants that we make up for all the retirees. You'd also have to prevent naturalized citizens from bringing their parents into the US, only children. Good luck with that considering how xenophobic the US is and the backlash against immigration.

2. Export to the rest of the world to make up for domestic demand. While domestic demand can drop off, productivity hasn't due to improved technology and training. To do that, we need trade agreements with the developing world that would make our goods price competitive. Considering the US just pulled out of the TPP after signing it, getting into new trade agreements is going to be tricky. Plus, the status of the US dollar as the global reserve currency is going to result in overvalued US exports.

3. Greatly increase fertility by making child-rearing easier/cheaper. I mean, like, get paid money to have kids cheap. It costs about a million from birth to put a middle-class kid through college, which is why most families struggle with 2, nevermind 3 or more. Daycare would have to be free, and transportation to and from school/afterschool would be subsidized/provided, so parents can actually handle the schedule of 3+ kids. Higher ed would also have to be subsidized/price controlled. All this would necessitate very high taxes on the childless, and possibly result in unfit parents being financially incentivized to have children.

So out of the 3 possible solutions, the first 2 have just been rejected by the US, and the last one is the hardest to pull off.