TY  - JOUR
AU  - Hurd,Michael D.
TI  - The Effects of Demographic Trends on Consumption, Saving and Government Expenditures in the U.S.
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4601
PY  - 1993
Y2  - December 1993
UR  - http://www.nber.org/papers/w4601
L1  - http://www.nber.org/papers/w4601.pdf
N1  - Author contact info:
Michael D. Hurd
RAND Corporation
1776 Main Street
Santa Monica, CA 90407
Tel: 310/451-6945
Fax: 310/451-6923
E-Mail: mhurd@rand.org
M1  - published as Michael D. Hurd. "The Effects of Demographic Trends on Consumption, Saving, and Government Expenditures in the United States," in Michael D. Hurd and Naohiro Yashiro, editors, "The Economic Effects of Aging in the United States and Japan" University of Chicago Press (1996)

AB  - This paper reviews and analyzes forecasts of the Social Security trust funds, government spending, medical expenditures, and other elements of aggregate income and spending.  According to these forecasts, the aging of the U.S. population will require some increases in taxes to support the retirement system.  It should reduce the saving rate, and the composition of output will change.  By themselves, these changes seem manageable.  However, the direct effects of aging are completely dominated by the projected increases in medical expenditures.  Although medical costs interact with aging, most of the increases are not related to aging.  Even the moderately high forecast of medical spending will require that all increases in output between now and 2020 be devoted to the consumption of medical services, allowing no increase in any other component of consumption.
ER  -