LTCI Watch: Babies

China, Italy and some other countries have been trying to address fears about the aging of their baby boomers by using tax incentives and other incentives to encourage families to have more babies.

See also: Italians aren’t making babies like they used to

Of course, babies are great. 

Some LifeHealthPro.com readers, especially those who are fond of Ayn Rand, might say that a government has no business helping families deal with ordinary living costs, period, and that any effort to do so is likely to backfire, by encouraging malingering, leading families to have children they can’t afford to rear, and reducing the resources employers have to hire and pay workers.

Others might say that the government should certainly help struggling families pay to care for their children, in part because, whatever ability the parents or other players in the economy have to make economic decisions, the children themselves have little or no ability to earn income or make purchasing decisions for themselves.

I think those arguments are related to but separate from the arguments about whether governments should encourage citizens to have more babies to help them deal with the effects of the aging of their baby boomers on the national labor supply, tax revenue, and the supply of long-term care (LTC) workers.

There’s a big difference between helping children who are already here and giving families artificial incentives to have more.

For now, at least, the world has obvious limits on natural resources. Any readers of this article who are sitting in California are lucky to be able to get a glass of drinking water out of the tap. If you’re in Colorado, you’re lucky if you can take a deep breath without inhaling forest fire soot. 

Japan, one country with a shrinking population, has to bring nuclear power plants damaged by the 2011 Fukushima earthquake back online because it has no other practical way for its population to have access to a developed-world level of electricity.

The economics of dealing with an aging population might be tricky, but they’re a lot simpler than dealing with a lack of drinkable water.

If a country with a rapidly dwindling population sees that government programs or taxes are keeping families from having children, of course, that country ought to consider changing those policies.

The countries that simply see people over age 65 making up a bigger share of a gradually shrinking population ought to start with other strategies.

1. They should eliminate government-created barriers, psychological barriers and education-access obstacles that keep older people from working.

The main reason that the “Silver Tsunami” looks so frightening today is that public policymakers and private retirement plan designers came up with the rules and customs that shape the labor market today at a time when the average lifespan was much shorter, and when the length of time that older people spent facing severe disabilities was, apparently, somewhat longer.

See also: OECD: Retirement Age Must Be Raised Worldwide