
Contents
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Basic Facts Basic Facts
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The Demography of Aging in the United States The Demography of Aging in the United States
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The Role of Immigration And Immigration Policy The Role of Immigration And Immigration Policy
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Important U.S. Policies Related to an Aging Population Important U.S. Policies Related to an Aging Population
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Social Security Social Security
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Medicare And Medicaid Medicare And Medicaid
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Other Policies Other Policies
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The Economics of Fiscal Deficits in the Long Run The Economics of Fiscal Deficits in the Long Run
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The Overlapping Generations Model The Overlapping Generations Model
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“Ricardian” Equivalence “Ricardian” Equivalence
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The Measurement of Debts and Deficits The Measurement of Debts and Deficits
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The Future of U.S. Budget Deficits The Future of U.S. Budget Deficits
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Trust Funds and the Unified Budget Deficit Trust Funds and the Unified Budget Deficit
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Forecasts of Liabilities Forecasts of Liabilities
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Official Forecasts Official Forecasts
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Summary of Age-Related Fiscal Effects Summary of Age-Related Fiscal Effects
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Potential Effects of Alternative Policies Potential Effects of Alternative Policies
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Should the United States Be Saving More Now? Should the United States Be Saving More Now?
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Increasing Fertility Increasing Fertility
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Immigration Policy Immigration Policy
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Fiscal Stabilization Fiscal Stabilization
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Conclusions Conclusions
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Directions for Future Research Directions for Future Research
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Related Chapters Related Chapters
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Further Readings Further Readings
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References References
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Notes Notes
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33 The Fiscal Challenge of an Aging Population in the United States
Get accessSewin Chan, Robert F. Wagner Graduate School of Public Service, New York University.
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Published:18 September 2012
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Abstract
This chapter examines the fiscal challenge posed by the aging of the U.S. population. We summarize the likely future of U.S. demographics, focusing on the evolution of the dependency ratio. We describe the main U.S. government programs related to aging and assess their fiscal positions. Forecasts for the unfunded liabilities in these programs exceed $40 trillion. We provide a review of economic theory useful for understanding the likely economic impact of budget deficits. We evaluate the fiscal adjustment that is likely to be needed given the 2009 status of the U.S. fiscal position and predicted demographic changes: it is likely to be approximately 8% of GDP, which, while large, is an adjustment that has been managed by many countries in the past. Finally, we provide a brief survey of potential policies to address the fiscal challenge of aging, and of economic research evaluating such policies.
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