The U.S. Economy's Big Baby Problem

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http://www.theatlantic.com/business/archive/2014/03/the-us-economys-big-baby-problem/284237/

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Last September, the U.S. government announced that our birthrate fell to "another record low" in 2012, following a long, steady slide since the Baby Boom after World War II.



It goes without saying that, morally speaking, there's nothing wrong with this. It's natural, in a way. All over the world, birthrates tend to fall along with economic development, for numerous reasons including (a) the move away from a labor-intensive small-farm economy and (b) women's ascendance in the workforce, which uses time that used to be devoted to child-rearing. Families in richer countries tend to have fewer kids. In places like Japan and Western Europe, national populations are actually peaking.

The thing about an increasingly childless economy is that it has major implications for consumption. Just look at this new data from a Gallup survey released today on the average daily spending of families. Even after you control for income, age, education, and marital status, families with young kids spend more every day. These are the sort of spenders you want in a weak economy following a great deleveraging.

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1. The three basic costs that have exploded in the past 40 years are housing, health care and education

All of which vary upward when you have children. At the same time, the owners have expropriated 80-90 percent of our productivity gains for themselves and incomes have stagnated. Not to mention the inherent instability that comes along with our brand of capitalism. Children are an affair of the heart, but when you raise the bar this high they become an increasingly romantic choice for many, many people.