The Country Needs an Influx of Young People & Another Baby Boom

Dec 26, 2022 | Macro Insights, No Bull Economics


An aging population of retirees will put downward pressure on tax revenues and upward pressure on entitlement spending, propelling crippling deficits according to long-term CBO estimates.  

Key Points:

Demographics represent a significant challenge for the country as the percentage of the 65+ population is forecasted to grow dramatically until 2032. This suggests a rapid increase in Social Security and Medicare enrollment, two very expensive programs which both have the potential to bankrupt the country.

Enrollment in Social Security and Medicare Graph
Enrollment in Social Security & Medicare Graph

The government’s financial condition as forecasted by the CBO is greatly stressed by aging demographics as identified in the table below. More elderly retirees mean less tax revenue and more entitlement spending. Notably, we see a nearly doubling of social security outlays as a % of GDP from 1972 to 2032. Worse yet, healthcare spending is poised to increase nearly 7x during the same period as all those elderly consume more services. All this means much larger deficits such that net interest as a % of GDP is expected to exceed defense spending by 2032. Of course, higher interest rates have the potential to further aggravate this problem. 

CBO's Baseline Projections Graph
CBO’s Baseline Projections Graph
Marketing NFS Graphic Updated
NoBull Posts Thumbnail
Restaurant Research

Email Sign-up

15 Second Posts

2Q23 Retail Same Store Sales

NoBull’s Retail Same Store Sales Report benchmarks 80+ large consumer retail companies by domestic same store sales including annual (2019 – 2022) and quarterly results (2Q22 to 2Q23).

Walmart Investor Presentation: Inflation Here to Stay

While general merchandise prices are lower y/y, they remain elevated compared to 2 years ago. As Walmart does not believe general merchandise and food (dry grocery) & consumable prices are ever going to completely disinflate, management suggests the need for a country-wide wage increase rebalancing.

Interesting Conversation with Fed Chair Powell

Okay, Powell didn’t actually take our call, but we offer a transcript of a potential discussion between the Fed Chair and John Q. Public. It’s very insightful, so please read on.

The Problem with Investment Diversification

Every investment advisor and business student knows that portfolio diversification is key to wealth building. Show me an investor who can beat the S&P 500 Index by buying a few handpicked stocks and I will show you a hedge fund manager in the making. However, there is a huge problem with this strategy that no one is talking about.

Part 3: Analyzing Performance of Low-Income Oriented Retail Companies

We created an index for the financial performance of 5 low-income oriented retail companies to assess the health of this demo. While we recognize that these companies have benefited from the trade-down of higher-income consumers, things look reasonable at least through calendar 2Q23. 

Part 2: Incremental Interest Payments Squeeze Disposable Income

In this post, we quantify the pressure on disposable income driven by credit card & auto loan payment increases since the onset of the Fed rate hikes in early 2022 in addition to the impact of the coming resumption of student loan payments in October 2023.

Part 1: Keeping an Eye on the Consumer’s Top-Line

The consumer’s top-line benefits from a high employment rate, generous raises, and a healthy savings rate which indicates an income surplus.

Teenage Wasteland No More

The American youth (15 – 24-year-old) unemployment rate makes our country look downright productive compared to the rest of the world!

The Fight for Global Manufacturing Gets Personal

Post-covid U.S. exports of goods & services have skyrocketed as American companies have worked hard to onshore their supply chains, providing them with products to sell overseas. Correspondingly, U.S. imports from China have fallen considerably since late 2022 after China’s extended covid lockdowns left their American customers without product to sell.  

China’s Deflation Looks Pretty Good Compared to U.S. Inflation

While the U.S. has been suffering from severe post-covid inflation, China’s prices have been spiraling lower. What’s up with that?

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company