This article examines the economic and financial challenges facing Western countries due to an aging population. It discusses the impact of rising pension and healthcare spending—up by about 5% of GDP since 1980, with the IMF forecasting further growth by 2030. As societies age, older people remain active, work longer, and hold more wealth, partially offsetting some economic pressures.
Pension payments remain popular across all generations. The political influence of pensioners makes it difficult to enact reforms and balance budgets, and any attempt to change pension systems sparks major protests.
The article also addresses benefits of longer lifespans, such as the ability to maintain or increase population numbers despite low birth rates, as well as the downward pressure on real interest rates. However, generous pensions create fiscal and tax burdens, leading to increased government debt and challenges to implementing real reforms.
In conclusion, population aging is transforming Western economies, politics, and society, requiring new approaches to budgeting and social security reform.
