One wonders whether Mark Steyn plans to welcome Megan McArdle to his club — the club whose members realize that European demographic statistics spell doom for the continent’s future.
Steyn’s written an entire book on the topic. McArdle’s latest Atlantic feature covers similar ground as she discusses how faster economic growth would save debt-ridden European societies:
Strong growth by Europe’s troubled debtor nations would of course offer a different, and less painful, way out. After all, if you make $30,000 a year, a $10,000 credit-card balance is crippling; but if you make $300,000 a year, it’s fairly trivial. The faster Italy’s economy expands, the more manageable Italy’s debt becomes.
But that’s where the dearth of workers comes into play. Everyone agrees that rapid growth would be much nicer than higher taxes and slashed pension payments. The hitch is that over the past five years, growth in the Italian economy hasn’t averaged even 1 percent a year. Soaring growth will be tough to achieve, because more and more Italians are getting too old to work—and fewer and fewer Italians have been having the babies needed to replace them.
Italy’s fertility rate has actually been inching up from its 1995 low of 1.19 children for every woman, but it is still only about 1.4—well below the number needed to replenish its population (2.1). As a result, even with some immigration, Italy’s population growth has been very slow. It will soon stall, and eventually go into reverse. And then, one by one, the rest of Europe’s nations will follow. Not one country on the Continent has a fertility rate high enough to replace its current population. Heavy debt and a shrinking population are a very bad combination.
