AlexS

California - And by Extension the U.S. - Headed for Permanently Smaller Economy

I don't believe the aging population is underconsuming. They underconsume on some items but overconsume health care. From what I've been reading the growth in U.S. GDP and employment for some time has been due to health care, increasingly consumed by people who do not work and who do not contribute to GDP. In the same way the growth in our education budgets have come largely for special needs children. In both cases, we have been "investing" in our most unproductive sectors. Meanwhile, Asian countries that have no such inclinations have been investing in steel, factories, and the education of their elite. The Obama Administration is an example of this dynamic, as most of the funds from the rescue of Chrysler went to UAW retirees, and much of our productive capacity will be forced overseas with CO2 cap and trade. Unfortunate choices, I think.