timelets

The number of older people in the developed world keeps growing. Traditionally, older people are conservative spenders and investors. As a result, we see deflationary trends both in the US and Europe. So far, attempts by central banks to force spending by lowering interest rates run into a wall of uncertainty because the old people are still reluctant to spend and the young people don't have the money to spend - a generational stalemate.

The current developments in life sciences provide a hint of how we might deal with the situation. The solution seems to be to enable inter-generational trade in technology. That is, the young develop new healthcare devices and therapies, while the old pay for them because health is the only thing they have to buy. To make the whole thing work, the government needs to get out of the picture by classifying these new expenditures as wellness-, rather than health-related. Otherwise, instead of economic growth, we'll get catastrophic increases in budget deficits.

US pyramid