America is in incipient decline, and this
week's presidential election might be the last
chance to reverse it. We are becoming a different
sort of country, with a different people and
different beliefs. Another four years of Barack
Obama well might take us past the point of no
return, although no-one, to be sure, knows
quite where that lies. There is still
time to change course. There might not be time by
2016.
Nearly a third of Americans now
depend on food stamps, welfare, disability
payments, or some other form of government
support, compared with one out of five when George
W Bush left office. This enormous shift has
occurred before the detonation of a demographic
time bomb that will explode towards the end of the
present decade, and which will push America
towards even greater dependency. This time bomb
has four facets:
The baby boomers will retire, and the
percentage of Americans over 60 will jump from a
sixth to a quarter of the total population in
little more than a decade;
The population that replaces the baby boomers
will come to an increasing extent from families
with the lowest level of educational attainment;
A new underclass is in formation due to the
jump in the rate of births out of wedlock, which
comprised two-fifths of total births in 2011;
Dependency on government support will rise
sharply just as the federal government's capacity
to finance the dependent population will fall.
Proportion of Americans over Age
60 Source: UN World Population Prospects,
Constant Fertility Scenario
When I
sent my book How Civilizations Die to the
publisher in the summer of 2011, the prospect of
America's decline still seemed remote: America had
the highest fertility rate among industrial
countries, the strongest technological base, the
most advanced universities, and the most
optimistic people. But the preponderance of new
data makes the prospect of American decline a real
possibility.
The numbers shed light on
some of aspects of the presidential election
campaign which are, or at least should be,
astonishing.
Why, for example, did the
Obama administration provoke the hierarchy of the
Catholic Church by demanding that Catholic
institutions pay for abortion pills through
employee health insurance? The Catholic bishops
supported Obamacare from the beginning, and the
administration's decision to alienate an ally in
order to placate a nearly uncontested voter bloc
(young unmarried women) seems impolitic.
The answer lies in the Obama's campaign
confidence that Hispanics will vote on federal
handouts rather than faith. "Should I win a second
term, a big reason I will win a second term is
because the Republican nominee and the Republican
Party have so alienated the fastest-growing
demographic group in the country, the Latino
community," Obama told the Des Moines Register in
an October 23 interview that was originally off
the record but was published with the president's
permission. The Register proceeded to endorse Mitt
Romney, the first Republican it had supported in
two generations.
Hispanics account for 70%
of the growth in the Catholic population since
1960, and will be a majority of American Catholics
somewhere between 2025 and 3030, according to
Church projections.
Hispanic
Educational Attainment Source:
Census Bureau, 2010
Hispanics are hard workers; the labor
force participation rate for Hispanics in October
2012 was 66.3%, higher than the 64.8% for the
total population. They also seem less dependent on
food stamps than the general population (the
Department of Agriculture reports that only 10% of
food stamp recipients are Hispanics, who comprise
about 17% of the overall population, although it
cannot identify the ethnicity of a fifth of total
users).
But the Hispanic unemployment rate
was 10%, compared to 7.9% overall. Higher Hispanic
unemployment is entirely due to lower levels of
education; the unemployment rate for Americans
with a high-school diploma or less stood at 12.2%.
That explains why two-thirds of Latinos
(according to a November 1 Fox News poll) plan to
vote for Obama. They have fared worse during the
past four years than the general population, and
they have taken less government help than the
general population, but their prospects are far
poorer than the general population in a job market
that requires more education.
As the Baby
Boomers leave the labor force, they will be
replace to an increasing extent by Hispanics, who
comprise about 15% of the working-age population,
but a quarter of American children.
Hispanic Population as a Percent of
Total, by Age Group Source: Census Bureau
The notion
that Hispanics will inundate the American
population through immigration and high birth
rates is a xenophobic fantasy. Immigration from
Mexico may have reversed during the past several
years, the Pew
Hispanic Center reported earlier this year, as
construction and other jobs evaporated.
The Wall Street Journal reported on
October 3, "The overall fertility rate for women
in the US - defined as the number of newborns per
1,000 women aged 15 to 44 - was 63.2 last year,
down from 64.1 in 2010 and the lowest rate since
the government started collecting these statistics
in 1920. And the sharpest decline was among young
Hispanics: "Hispanic women between 20 and 24 saw
their fertility rate drop to 115 last year from
165 in 2007.'"
The sudden drop in Hispanic
fertility calls to mind the rapid decline in birth
rates in Catholic regions during the 1960s and
1970s, notably Quebec, Spain, and Poland, which
now have some of the world's lowest fertility
rates. Mexico's fertility rate has fallen to
barely above replacement. If American Hispanics
are following the pattern in Catholic countries,
it suggests that the next generation will be far
less Catholic than their parents.
Hispanic
Catholics are not the only segment of America's
religious population whose faith appears to
attenuate with generational change. Sarah Posner
reported October 9 in the London-based Guardian:
... the data shows [conservative
Christians] are clearly losing the public.
Another survey last week from the Public
Religion Research Institute showed that while
Mitt Romney has the support of 80% of younger
white evangelical millennials (aged 18 to 25),
this is a small and diminishing constituency:
white evangelicals comprise only 12.3% of that
age group. That's less than half their
proportion of the 50 to 64 population. The Pew
survey showed that while 32% of Americans aged
50 to 64 are white evangelicals, only 13% of
those aged 18 to 29 are.
One can't
blame President Obama for the apparent decline of
religious faith among young Hispanics or
evangelicals, but the contempt he shows the
Catholic Church surely makes matters worse. It is
harder to raise one's children in a religious
community when the president disdains the largest
religious denomination.
A generation less
imbued with traditional values, and which weaker
qualifications, is about to encounter a bleak
future.
A great transition downwards in
American educational levels is pre-programmed: as
the most successful generation in American
economic history retires, they will be replaced to
an increasing extent by children from families
with very low educational levels and little
cultural inclination to seek education for their
children. By contrast, Asian-Americans comprise
less than 12% of the total New York City school
population but about three-quarters of the elite
city high schools, where admission depends on
entrance examinations. Income has nothing to do
with the disparity; the new elite of New York City
students come overwhelmingly from poor immigrant
families.
No amount of government spending
on education will fix the problem. Children learn
how to learn, and acquire the motivation to learn,
from their families. If families want to educate
their children, nothing will stop them. New York's
Asian-American children attend the same miserable
public schools as everyone else, but their parents
scrape together the tuition for cram school.
There is an obvious solution to the
problem: encourage Asian immigration. It isn't
enough to institute a points system like Canada's
because there aren't enough Asians who already are
educated to fill the gap. It is difficult to
envisage how such a policy might be devised, let
alone accepted. But there is nothing un-American
in favoring immigrants with superior skills and
education. America succeeded because it had a 90%
literacy rate at the time of the Revolution,
compared to less than 40% for France.
The
American economy will be hard pressed to absorb
labor force entrants with low skills. Construction
provided opportunities to less-educated workers.
It won't come back for a long time. As I wrote in
a 2009 essay for First
Things:
America's population has risen from
200 million to 300 million since 1970, while the
total number of two-parent families with
children is the same today as it was when
Richard Nixon took office, at 25 million. In
1973, the United States had 36 million housing
units with three or more bedrooms, not many more
than the number of two-parent families with
children - which means that the supply of family
homes was roughly in line with the number of
families. By 2005, the number of housing units
with three or more bedrooms had doubled to 72
million, though America had the same number of
two-parent families with children.
The
number of two-parent families with children, the
kind of household that requires and can afford a
large home, has remained essentially stagnant
since 1963, according to the Census Bureau.
Between 1963 and 2005, to be sure, the total
number of what the Census Bureau categorizes as
families grew from 47 million to 77 million. But
most of the increase is due to families without
children, including what are sometimes rather
strangely called "one-person
families."
Where will jobs come from
for the unskilled?
The entrepreneurial
start-up sector is dead in the water. As I
reported in this space last week, "The average
return on investment (ROI) for 3,181 traded US
companies as of the second quarter was just 1.0%,
versus 10.2% for the top 500 by market
capitalization." Small companies can't cut in a
globalized world where technology, manufacturing
and marketing require global reach from inception.
Facebook might have started in a Harvard dorm
room, but the social networking giant has pulled
up the ladder behind it. Even in the freewheeling
world of social media, the entry threshold is
punishingly high.
A perfect economic storm
is in incubation. An American population with
lower educational attainment, and with a huge
continent of children raised in single-parent
families, will meet a labor market dominated by
corporate oligopolies that can source labor
anywhere in the world.
That is the future.
But the present is already cause for alarm.
Nicholas Eberstadt of the American Enterprise
Institute summarized his new book A
Nation of Takers: America's Entitlement
Epidemic in these bullet points:
Entitlement outlays, after controlling for
both inflation and population growth, grew by over
700% in 50 years. By 2010, the average per capita
burden of entitlements for every man, woman and
child was about $7,200 apiece, or nearly $29,000
for a notional family of four.
In 1960, one dollar of every three taken in by
the federal government was devoted to entitlements
and two dollars were designated for governance. By
2010, this had reversed to one dollar for
governance and two for entitlements.
About half of Americans live in a household
that receives one or more transfer payments.
Almost half of American children are in
households that receive one or more.
About 18% of all personal income received in
the United States is through government transfer
payments.
Almost 12 million working-age Americans in
2010 were receiving one or more disability
entitlement payments though entitlement programs,
which is one for every 11.3 people of the same age
with a job.
Around 35% of Americans in 2011 lived in
households that got one or more means-tested
benefits, which is about twice as high as the rate
in the early 1980s.
That's why the budget
deficit continues to run in excess of a trillion
dollars a year. The American economy can't survive
with just 58% of the working-age population
employed (compared to 63% before the crisis).
Employment to Population
Ratio Source:
Bureau of Labor Statistics
During the
past year, the US Treasury borrowed $1.2 trillion.
Half of that amount was lent to America by
foreigners. Mitt Romney asks whether it's worth
borrowing money from China to fund each line item
in the federal budget, but China was a net seller
of $165 billion of Treasury securities during the
past 12 months. Japan was the largest buyer, at
$220 billion.
America cannot continue to
fund an indigent population on the largesse of the
rest of the world for very much longer. At some
point foreigners will demand a risk premium for
owning US Treasury securities. And every 1%
increase in the interest rate on government debt
will cost the Treasury $160 billion a year. Obama
well may turn out to be the James Callaghan of the
United States, the Labor Party prime minister who
brought Britain to its economic nadir during the
pound sterling crisis of 1976.
Foreign
Holdings of US Treasury
Securities Source:
US Treasury
A second term for Barack
Obama promises more of the same: more dependency,
more entitlement spending, more federal debt, and
more dependency on foreign lenders - until the
rest of the world wearies of American fecklessness
and finds a better use for its money. Can America
reverse the damage? Probably, if it acts now. More
of the same is a prescription for a catastrophic
spiral into national decline.
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