Gray Dawn: How the Coming Age Wave Will Transform America--and the World

The challenge of global aging, like a massive iceberg, looms ahead in the future of the largest and most affluent economies of the world. Visible above the waterline are the unprecedented growth in the number of elderly and the unprecedented decline in the number of youth over the next several decades. Lurking beneath the waves, and not yet widely understood, are the wrenching economic and social costs that will accompany this demographic transformation-costs that threaten to bankrupt even the greatest of powers, the United States included, unless they take action in time. Those who are most aware of the implications of this extraordinary demographic shift will best be able to prepare themselves for it, and even profit from the many opportunities it will leave in its wake. The list of great hazards in the next century is long and generally familiar. It includes proliferation of nuclear, chemical, and biological weapons; high-tech terrorism; deadly superviruses; extreme climate change; the financial, economic, and political aftershocks of globalization; and the ethnic and military explosions waiting to be detonated by today's unsteady new democracies. Yet there is a less-understood challenge-the graying of the developed world's population-that may actually do more to reshape our collective future than any of the above. This demographic shift cannot be avoided. It is inevitable. The timing and magnitude of the coming transformation is virtually locked in. The elderly of the first half of the next century have already been born and can be counted-and the retirement benefit systems on which they will depend are already in place. The future costs can therefore be projected with a fair degree of certainty. Unlike global warming, for example, there can be little theoretical debate over whether global aging will manifest itself-or when. And unlike other challenges, such as financial support for new democracies, the cost of global aging will be far beyond our means-even the collective means of all the world's wealthy nations. How we confront global aging will have direct economic implications-measurable, over the next century, in the quadrillions of dollars-that will likely dwarf the other challenges. Indeed, it will greatly influence how the other challenges ultimately play out. Societies in the developed world-by which I mean primarily the countries of North America, Western Europe, Japan, and Australia-are aging for three major reasons: Medical advances, along with increased affluence and improvement in public health, nutrition, and safety, are raising average life expectancy dramatically. A huge outsized baby boom generation in the United States and several other countries is now making its way through middle age. Fertility rates have fallen, and in Japan and a number of European countries are now running far beneath the "replacement rate" necessary to replace today's population. The impact of so few young people entering tomorrow's tax-paying workforce, while so many are entering benefit-receiving elderhood, is of profound consequence. As a result, I believe that global aging will become the transcendent political and economic issue of the twenty-first century. I will argue that-like it or not, and there's every reason to believe we won't like it-renegotiating the established social contract in response to global aging will soon dominate and daunt the public policy agendas of all the developed countriesPeter G. Peterson is the author of 'Gray Dawn: How the Coming Age Wave Will Transform America--and the World', published 2000 under ISBN 9780812990690 and ISBN 0812990692.