EPTBut there is one final element in which Japan leads the world--and it's not necessarily a positive one: demographics. Every nation, as it gets richer and more educated, eventually experiences a falling birthrate. Presumably, raising a child to be economically competitive becomes harder, while people acquire new apsirations and leisure activities beyond popping out babies. Japan is furthest along this curve, with a dismal birthrate of 1.2 children per woman. The result? A shrinking, aging population.
Now, old people aren't necessarily bad, if they're funding their retirements from their own savings, and those savings are put into highly productive investments. Unfortunately, in the vast majority of developed countries (and developing ones, like China), retirement is funded with a mix of savings that become captive to morally hazardous Wall Street traders and Chinese and Japanese land developers, and "pay as you go" social security systems that force the current working generation to pay for the health of the prior working generation.
Put simply, old people are now a burden because we don't have enough money in the financial system to take care of them, and because we don't have enough young people to support their overwhemlingly spendthrift consumptive habits.
By consumptive habits, I don't mean retirees plunking their oxygen bottles on the deck of a Carnival cruise liner or next to the dollar slot machines at the Foxwoods Casino. I'm talking about the two iron laws that come about when you intersect human behavior, medical science, and economics.
- First, the marginal cost to keep a person alive for an additional year is constantly increasing, since their health is constantly deteriorating.
- Second, people are subconsciously hardwired to delay their own death for as long as they can.
What happens? To get someone from 60 years to 70 years in one piece requires maybe 100k USD in healthcare. From to 70 to 80? 200k. From 80 to 90? Anywhere between 400k and 1 million. And subconsciously, that 90 year old is going to want to keep living forever, up until the point where not even the combined economic resources of the world can keep alive. These numbers are hypothetical, but the trend line is not.
![[image loading]](http://cdn.theatlantic.com/static/mt/assets/business/assets_c/2011/04/us%20health%20care%20costs-thumb-600x326-47611.png)
Of course, Japan has done an admirable job of keeping its average healthcare costs low--again, because they're so damn advanced. But even they, the paragons of being efficient at keeping old people alive, are feeling the pain. Why?
Demand for healthcare is infinite, explosive, and self-perpetuating. Successfully meeting healthcare demand for this year's crop of retirees simply means you'll have to keep them alive next year as well, at a higher price, and the year after that, forever.
With that grim idea in mind, some people have taken an interesting approach to solving the problem. And since this problem is most acute in Japan, their politicians are saying what we all might be saying in ten, twenty, or thirty years:
Taro Aso, the finance minister, said on Monday that the elderly should be allowed to "hurry up and die" to relieve pressure on the state to pay for their medical care.
"Heaven forbid if you are forced to live on when you want to die. I would wake up feeling increasingly bad knowing that [treatment] was all being paid for by the government," he said during a meeting of the national council on social security reforms. "The problem won't be solved unless you let them hurry up and die."
....
The 72-year-old, who doubles as deputy prime minister, said he would refuse end-of-life care. "I don't need that kind of care," he said in comments quoted by local media, adding that he had written a note instructing his family to deny him life-prolonging medical treatment.
To compound the insult, he referred to elderly patients who are no longer able to feed themselves as "tube people". The health and welfare ministry, he added, was "well aware that it costs several tens of millions of yen" a month to treat a single patient in the final stages of life.
"Heaven forbid if you are forced to live on when you want to die. I would wake up feeling increasingly bad knowing that [treatment] was all being paid for by the government," he said during a meeting of the national council on social security reforms. "The problem won't be solved unless you let them hurry up and die."
....
The 72-year-old, who doubles as deputy prime minister, said he would refuse end-of-life care. "I don't need that kind of care," he said in comments quoted by local media, adding that he had written a note instructing his family to deny him life-prolonging medical treatment.
To compound the insult, he referred to elderly patients who are no longer able to feed themselves as "tube people". The health and welfare ministry, he added, was "well aware that it costs several tens of millions of yen" a month to treat a single patient in the final stages of life.
Now, a number of questions spring to mind after reading those four paragraphs, but the pressing one is: why is a politician talking about this? Why should voters be concerned about this?
Because it goes back to the nature of how these elderly are paying for their healthcare--by a mix of their own ill-invested savings and payroll taxes from the current generation. As the elderly draw down their savings, they add stress onto the financial system and increase the cost of capital, lowering the rate of accretion for labor-saving, capital-intensive investment for workers and decreasing labor productivity--the root of a working person's prosperity. Unless the investments have been exceedingly productive, there simply isn't enough cash left over for continued capital accumulation. Second, and more directly, payroll taxes come straight from the worker's own pocket, meaning that part of those millions of bucks that are being spent to get some random ninety-year-old to his hundredth birthday come from you.
The next logical step is a bit more chilling. Knowing that demand for healthcare is infinite, but that costs are partially socialized (and even if they weren't, they would still harm the economy), shouldn't the average working man have a say in how much healthcare the average retiree gets, and hence how long he or she will live? Follow that logic all the way to the end: since a democratic government is the executor of the popular will, shouldn't it get to decide how long a person lives?
And if they're such a drain on us--the rational, utility-maximizing, economic agents that macroeconomic history has demonstrated we often are--after sixty-five, shouldn't retirees just hurry up and die?
