Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Gersh Avery who wrote (59702)	9/4/2002 10:53:37 PM
From: Lee Lichterman III	Respond to of 94695

I don't have hard numbers and I don't know that anyone does at this time. I did recall posting something about this so I did a search on our site and found this from Greenspan testimony on 14 March 02 that I have posted here second post from the bottom........ marketswing.com Some excerpts...... In particular, productivity will play a central role in determining the nature of the economy’s response to the aging of the population soon upon us. Most economic forecasts are subject to significant uncertainty. At least by comparison, one judgment looks to be a reasonably sure proposition: The ratio of retirees to those still working will rise precipitously starting at the end of this decade and will continue to climb through the first third of this century and remain high thereafter. In part, this projected development owes to the retirement of the baby boomers. But the phenomenon is broader than that and reflects the aging of our society. Importantly, according to the social security trustees, the demographic challenge will not go away with the passing of the baby-boom generation. This ever-larger retired population will have to be fed, clothed, housed, and serviced by a workforce growing far less rapidly. The retirees may have accumulated a large stock of retirement savings, but the goods and services needed to redeem those savings must be produced by an active workforce assisted by a stock of plant and equipment sufficiently productive to meet the needs both of retirees and of a workforce expecting an ever-increasing standard of living. Though from an individual household’s point of view, saving reflects financial claims adequate to meet future needs, the focus for the economy as a whole, of necessity, must be on producing the real resources needed to redeem the financial assets. The role of finance is to channel saving into investment in the physical capital assets that assist in the production of the gross domestic product, which, in turn, serves both retirees and active workers. Clearly, an efficient system of finance can more effectively deploy a given stock of capital and thus maximize its contribution to supporting the population. Any analysis of the amount and type of saving required to finance the bulge in retirements that is just over the horizon clearly needs to project (1) the number of retirees, (2) the size of our workforce, and (3) the productivity of that workforce. Of the three, productivity is most directly affected by the level of investment, which, of course, is financed by saving. The size of the future workforce, excluding immigrants, and the size of the future retired population are relatively simple to project from today's age distribution. The level of immigration, both legal and illegal, will be dominated by public policy decisions and by economic forces, both in the United States and in the countries from which our immigrants are drawn. This forecast is more problematic, and its level matters: Over the past decade, for example, immigration accounted for approximately one-third of the increase in our workforce. The larger our workforce in 2010 and beyond, the easier producing goods and services for both retirees and active workers will be. Immigration policy will, therefore, be a key component of baby-boom retirement policy. ....... During the past six years, about 40 percent of the total increase in our capital stock in effect has been financed, on net, by saving from abroad. ......