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Mark L. Haas

America's golden years?

THE WORLD'S great powers are growing old. Steep declines in birthrates over the last century and major increases in life expectancy have caused the populations of Britain, China, France, Germany, Japan, Russia, and the United States to age at a substantial rate. This phenomenon will hinder the other major powers challenging America's economic and military dominance, largely because these countries are growing old faster than is the United States. Yet population aging may still threaten America's international security interests.

The scope of the aging process is remarkable. By 2050 at least 20 percent of the citizens in these countries will be over 65; in Japan more than 33 percent will be. China alone will have more than 329 million people over 65. The populations of Germany, Japan, and Russia are expected to shrink significantly. Russia's population is already decreasing by nearly 700,000 people per year.

The aging problem in the other great powers is so severe that, in coming decades, they will lack the resources to overtake America's huge power advantages. Graying populations will hinder countries' economic growth as working-age populations (ages 15 to 64) shrink, and will strain governmental resources as public spending for retirees' pensions and healthcare balloons. This is true even for China, America's most likely future rival. Indeed, China's economic expansion is already threatened by labor shortages due to population aging. China is also particularly unprepared to pay for the costs of an aging population. China's elderly have very little savings, the government has set aside little money for their welfare, and the family structure (the traditional form of social security) is weakening. Exploding public elderly care costs are likely to force cuts in all other discretionary spending, including for economic development and defense.

Although America's population is also aging, this country is in much better shape. The United States is the "youngest" of all the Group of Eight nations. Because it has the highest fertility and immigration rates of all the great powers, it will maintain -- even strengthen -- this position in coming decades. America's working-age population as a result is expected to expand significantly in this period. Compared with other great powers, the United States also has a relatively well-funded pension system; its public welfare commitments to the elderly are modest; its citizens work many more hours per year and significantly later in life; and its tax burden is low.

Although the aging crisis is less severe in the United States than in the other great powers, the challenges arising from this crisis are far from trivial. The Congressional Budget Office projects that by 2015, spending on the elderly in the United States will total almost $1.8 trillion -- nearly half of the anticipated federal budget. For the United States, healthcare costs are the biggest problem presented by an aging population. This country spends more than twice as much per capita in this area than any other industrialized state. By conservative estimates, absent reforms, the costs of Medicare alone will be at least $2.6 trillion in 2050 in today's dollars -- roughly the size of the current US federal budget.

To pay for the massive fiscal costs associated with its aging population, the United States is likely to have to scale back its international policies. America will be less able in the future to dedicate significant resources to preventing WMD proliferation, funding nation building, and engaging in humanitarian interventions. So at the same time that global aging will help prevent the rise of great power competitors, this phenomenon may jeopardize other vital US international interests.

To protect its international security, the United States needs to maintain its enviable demographic position. Specifically, it should reduce Social Security and Medicare payments to wealthier citizens, raise the retirement age to reflect increases in life expectancies, maintain largely open immigration policies, and, above all, restrain the rising costs of its healthcare system. A defining political question of the 21st century is whether US leaders have sufficient political will and wisdom to implement these and related policies. Failure to do so will significantly jeopardize future levels of America's global influence and safety.

Mark L. Haas is an assistant professor of political science at Duquesne University and a former fellow at the the International Security Program at Harvard's Belfer Center for Science and International Affairs.

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