Israel, Where The Baby Boom Lives On

There are many factors that contribute to the West’s general economic malaise. The biggest and most intractable though is aging demographics. The cost of care for the elderly (especially health care) takes up an increasingly larger percentage of resources as the population ages.

Social Security, Medicare, and Medicaid have grown to make up about half of the US federal budget. This is the only part of the federal budget, other than debt service, that is growing in proportion to the total.

At the same time, the number of people paying into the system is falling due to sub-replacement birthrates. There appears to be no viable political solution to this quandary.

It is difficult if not impossible to solve this problem by increasing taxes or cutting spending. Higher taxes take resources from the private sector, which slows economic growth in the long run. On the other hand, spending cuts prompt political outrage. As a result, the US and many other countries are engaging in deficit spending to fund rising age-related costs. But that resultant debt must be serviced, which reduces current and future spending. The result, once again, is political outrage.

While I’m doubtful that a political solution exists, I’m confident that there is an answer. It comes from biotech.

The cost of aging can be significantly reduced by emerging medical technologies. The balance between the old and the young can be restored by treating aging itself. Since most people are forced to retire for health reasons, people will choose to be productive longer as healthspans are extended.

The stakes are enormous. The West is headed for a financial cliff caused by aging. There is one notable exception, however. 

Here’s Why Israel Is Known As the Startup Nation

Israel has its share of problems, but population aging isn’t one of them. This is a remarkably young and vibrant country. It is also a country focused on health and health care. I’ve read that Israel has more doctors per capita than any other nation. If it’s not true, I’d be surprised.