Retirement Is Dead in This Economy
The comments below are an edited and abridged synopsis of an article by Patrick W. Watson
The US economy and corporate profits have diverged for some time. In the long run, aggregate stock prices (i.e., corporate profits) cannot grow faster than
Last month, the National Center for HealthStatistics reported that the US fertility rate had hit its lowest point. In theory, lower fertility means fewer workers, which should reduce GDP. The immigration uptrend that started in the late 1980s, contributing to GDP growth, peaked in1997. Since 1997, measures of middle-class prosperity went flat or declined. Additionally, the Department of Homeland Security proposed to end theInternational Entrepreneur rule, which does not allow certain foreigners to temporarily enter the US and build businesses there. These entrepreneurs start their companies outside the US and hire non-Americans. Automation will enhance worker productivity enough to offset the flat or shrinking
In order for the economy to expand, Watson believes that people should not stop working at age 65 because they do not have enough savings to support themselves without working. So, people who are healthier will want to keep working to age 75, or even older. Their talents might launch whole new industries that can employ the automation-displaced younger generation. The US may have to endure some rough years, but this is the best outcome Watson can imagine.