Birthrates and Welfare States

Posted by PITHOCRATES - October 22nd, 2013

History 101

Birth Control and Abortion hurt the Welfare State because Babies become Taxpayers

People typically have fewer children during bad economic times.  Because you have to feed and clothe kids.  Which is very hard to do during bad economic times.  Especially if you lost your job during a period of high unemployment.  Such as the Great Depression.  Or if you’re going through a period of high inflation.  Like during the Seventies.  We can see this if we look at the birthrate over the years.

Number of Children per Woman R1

(source: Population Reference Bureau)

Bad economic times (Great Depression) fewer births.  High inflation (the Seventies) fewer births.  Of course, there was something else happening during the Seventies.  Which followed the Sexual Revolution.  Women were having more sex outside of marriage.  But they were using birth control and recently legalized abortion to avoid having children.  Women were liberated.  The feminists were moving into careers once reserved for men.  And because they were having careers they were not being stay-at-home mothers raising a family.

Also during the Seventies there was the zero population growth movement.  Among many other movements.  As the hippies turned antiestablishment.  And anti-capitalist.  Preferring a communal life.  Where there was no greed or profits.  Where everyone was equal and had an equal share.  Like the communists enjoyed.  Or, rather, suffered.  The zero population growth movement protested against having babies.  And the threat they posed to the limited resources of the earth.  So they were quite happy to see the birthrate fall below the replacement birthrate (about 2.1 children per woman in the United States).  Because below this rate future generations will be smaller than previous generations.  Which will burden the limited resources of the earth less.  But it created a big problem for those who wanted a large socialist state to provide cradle to the grave welfare.  For babies become taxpayers.

Because of the War on Poverty it takes Two Incomes to raise a Family Today

We just emerged from a government shutdown that ended with an agreement to raise the debt ceiling.  Why?  Because they can’t raise tax rates high enough to pay for all of the government’s spending.  At least not without putting most everyone below the poverty line after taxes.  Which makes that declining birthrate a big problem.  For the fall in the birthrate coincided with the expansion of the welfare state in the Sixties.  As can be seen in the explosion in welfare spending following LBJ’s launching of his War on Poverty.

Total Welfare Spending 1950 - 2010 R2

(source: The Heritage Foundation)

So just as women were having fewer babies so following generations would be smaller LBJ’s Great Society gave us a new expanding welfare state.  That is, once our tax base began to grow smaller with each subsequent generation federal expenditures were growing larger with each subsequent generation.  Resulting in higher tax rates on the smaller tax base to pay for it.  And massive new borrowings to pay what our taxes won’t.  As the government took more of our earnings away median household income stagnated.

Federal Spending and Median Income

(source: The Heritage Foundation)

If you’ve ever wondered why we can’t raise a family on one income these days this is why.  It’s the growth of federal spending.  Paid for with a growth in tax revenue.  Leaving us less money to raise our families.  Requiring that second income.  This is what the Great Society gave us.  And it’s what birth control and abortion gave us.  But it gets worse.

This Year Adult Incontinence Pants outsold Baby Diapers in Japan for the First Time

The Sexual Revolution gave us a baby bust generation.  Following a baby boom generation.  Giving us an aging population.  Where more people are leaving the workforce than are entering it.  So more people are consuming taxes (Social Security, Medicare, Medicaid, etc.) than are paying taxes.  Causing a massive wealth transfer from the young to the old.  So an aging population makes it even harder to raise a family.  Especially for the young just starting their families.  Because of the higher tax rates on a shrinking workforce required to pay for that aging population.  Which can lead to worse things than a collapse of the welfare state (see Why have young people in Japan stopped having sex? by Abigail Haworth posted 10/19/2013 on The Guardian)

Japan’s under-40s appear to be losing interest in conventional relationships. Millions aren’t even dating, and increasing numbers can’t be bothered with sex. For their government, “celibacy syndrome” is part of a looming national catastrophe. Japan already has one of the world’s lowest birth rates. Its population of 126 million, which has been shrinking for the past decade, is projected to plunge a further one-third by 2060…

Fewer babies were born here in 2012 than any year on record. (This was also the year, as the number of elderly people shoots up, that adult incontinence pants outsold baby nappies in Japan for the first time.) Kunio Kitamura, head of the JFPA, claims the demographic crisis is so serious that Japan “might eventually perish into extinction”.

This is the zero population growth movement on steroids.  The Republicans in the United States shut down the government in an attempt to curtail federal spending.  As the public debt is approaching 100% of GDP.  Very dangerous territory to be in.  But if you think that’s bad it’s far worse in Japan.  As their public debt is approximately 214% of GDP.  To support a massive welfare state.  In a country where the taxpayer is fast becoming an endangered species.

This is the ultimate end of any democracy that learned it could vote itself the treasury.  As taxes rise people cut back on their spending.  And a big cost item is children.  So we have declining birthrates in developed countries with expansive welfare states.  And immigration problems.  Immigrants who come for those generous state benefits.  And governments that want to grant them citizenship.  To make them taxpayers.  To make up for that declining birthrate.  And prevent their own extinction.

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Baby Boom causes new Short-Term Cost Pressures for NHS but offers Long-Term Hope

Posted by PITHOCRATES - November 17th, 2012

Week in Review

Now that President Obama won reelection and the Democrats retained the Senate Obamacare is here to stay.  Unless something happens in the 2014 midterm elections that turns Congress over to the Republicans with supermajorities that will allow them other ways to defund or otherwise shutdown Obamacare.  Or the states stand together on their end and refuse to implement Obamacare.  But unless these things happen Obamacare is here to stay.  Perhaps one day evolving into a full blown national health care system.  Which they designed it to do.  By putting in requirements that encourage employers to drop health care.  Opening the door for the government to step in to save the day from the health care crisis they created.

So what will life be like under Obamacare?  Start following what’s happening in the British National Health Service (NHS).  And you’ll get an idea of what national health care is like (see New baby boom to put ‘enormous’ strain on NHS by Stephen Adams posted 11/12/2012 on The Telegraph).

In the first three months of this year alone, 4,600 more babies were born than during the same period last year, according to official figures

Midwives are warning that the trend is continuing and will swell births to more than 700,000 in England this year – the first time that level has been reached since 1971.

Birth rates have been on the rise for a decade, due principally to immigration, with the number growing by about 12,000 a year…

Professor Cathy Warwick, chief executive of the Royal College of Midwives, said the increase was putting “enormous” strain on the NHS…

Before David Cameron came to power, he promised another 3,000 midwives across the NHS, but to date only an extra 900 have been employed.

The RCM is arguing another 5,000 are needed across England, to keep pace with the rising number of births…

A recent RCM poll of more than 2,000 midwives found nine in 10 did not feel they could give women all the care and support they needed.

A lack of midwives has been cited as one reason for the high proportion of caesareans in Britain, with mothers sometimes opting for surgery to avoid repeating a traumatic first birth.

The NHS is struggling to slash its budget.  For before this current baby boom birthrates had been falling after the establishment of the NHS.  Shrinking the tax base.  And the funding for the NHS.  At a time when people were living longer thanks to advances in health care.  So the NHS finds itself chronically underfunded thanks to that shrinking tax base.  And overburdened by more elderly people living longer after retirement consuming a lot of health care resources.  Which is why the NHS relies on midwives to deliver babies.  Often in the mother’s home.  To relieve the hospital of an enormous expense of handling something so mundane and routine as delivering a baby.  Midwives are a way to cut costs.  Without sacrificing quality health care.  As most births proceed without any complications.  When there are complications they take the mother to a hospital.

Midwives help the NHS spread their limited resources over as many people as possible.  Much like the quasi death panel Liverpool Care Pathway.  By encouraging people to let their loved dies instead of trying to prolong their lives with costly health care resources.  Of course, the NHS is currently revising their constitution to make sure those decisions are based on the patient’s best interests and not the hospital’s bottom line.

And speaking of bottom lines there is nothing like a baby boom to solve a government-funded organization’s chronic underfunding.  Because babies become taxpayers.  When they join the workforce.  And if they sustain this baby boom long enough it may bring the age of the British population down.  By having more people entering the workforce than leaving it.  Provided there are jobs for them when they are ready to enter the workforce.  So a rising population growth rate can’t fix all of their problems alone.  They also need a business-friendly environment that will create jobs to employ these new taxpayers.

Of course you know what will happen then.  After the baby boom creates a tax revenue boom the government will make more spending obligations it won’t be able to meet once their population ages again.  And they will be right back where they started from.  Only the spending obligations will be greater the next time around.  And here lies the problem.  It’s the spending that is the problem.  Always has been.  And always will be.  If governments stopped spending themselves into these kinds of messes they wouldn’t have these problems to begin with.  And the Americans have just given themselves a spending obligation that will create the mother of all messes.  Obamacare.  And whatever it will evolve into.  For the US has about 5 times the population of the UK.  So its cost pressures will probably be 5 times what the NHS is feeling.  Or more.  So the Americans can expect midwives to replace the maternity wards their mothers gave birth in.  And a Liverpool Care Pathway quasi death panel.  Why?  Because if the British couldn’t avoid these things than it isn’t likely the Americans will with 5 times the cost pressures.

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