Business leaders and our elected policymakers should take careful note of the population around us as we enter uncharted economic territory. The last of the Baby Boom generation leaks out into retirement over the next five years and we’ll witness the fuel that propelled capital markets shrink.
A few decades earlier, this was the generation that fueled consumer spending. Look at national Real Gross Domestic Product (GDP) figures over the past 25 years for evidence. We averaged about 3.5% in growth most years, and now, over the last 12 years, we’re fortunate to hit 2.5%. Learn more about GDP >
Yes, our population has grown, but that’s because we’re living longer—not because of rising birth rates or organized immigration (we stopped having kids 25 years ago). The reality is we have fewer people to prop up consumer spending and a growing number who are leaving the capital markets.
When times are good, policy decisions can be “roughly right.” However, with Real GDP growth rates shrinking, we need to move carefully, and policy choices need to be more accurate today than ever before.
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