US Birth Rate Hits New Low – A Nation of Singles

John Mauldin

December 21, 2012

Today's OTB is not directly about the economy or investment, but rather about a key demographic shift that will certainly have a major effect on both. I have a somewhat different take on the shift than our author, my very-long-time friend Gary D. Halbert (founder of ProFutures and former business partner from the '90s); and I will be writing about this next year. There is a significant transformation going on in my thinking about how the political world in the US (and, I suspect, much of Europe as well) impacts the economy.

The real eye-opener here is Gary's reporting of the role of singles, rather than what is happening with the birth rate and fertility rate, although those are important too. As a surging percentage of US voters, singles are a game changer. They see the world differently in terms of their own personal security and the future – or at least that is how they vote.

To get a sense of how powerful the marriage effect is, not just for women but for men, too, look at the exit polls by marital status. Among non-married voters – people who are single and have never married, are living with a partner, or are divorced – Obama beat Romney 62-35. Among married voters Romney won the vote handily, 56-42.

OK, we all kind of knew that singles as a group favored Obama. But by that much? Singles are a new and rapidly rising part of the population that has not been well accounted for demographically, and that is the real import of what Gary shows us. I can tell you how many women will be eligible to vote in 2030, for instance, but there is nothing in the birth rate to predict the number of singles we'll have. That is shifting, and in terms of voting patterns that shift (at least so far) is large.

This piece gives us quite a bit to think about as we contemplate how our entitlement programs and taxes will eventually settle out. The trends Gary describes are part and parcel of our national dysfunctionality. We want maximal healthcare and minimal taxes – at least on 98% of us. Healthcare benefits have to be paid for by someone; and that trade-off is going to be large in terms not just of taxes but also how capital formation, productivity, and employment are affected. It is hard to overstate the implications of how healthcare demographics will affect the economy.

As I write this note, the hustle and bustle of Christmas shopping and planning are going on all around me. My family will celebrate Christmas together on the 26th, so I can have all my seven kids and their families in one place under my roof.

I wish you and your family a very Merry Christmas and a great New Year. I will be writing a short note for Thoughts from the Frontline this weekend, and then start to think about roasting a prime, rather than prime rates, for a few days.

Your almost ready for Christmas analyst,

John Mauldin, Editor

Outside the Box

subscribers@mauldineconomics.com

FORECASTS & TRENDS E-LETTER

by Gary D. Halbert

December 18, 2012

US Birth Rate Hits New Low – A Nation of Singles

IN THIS ISSUE:

1. US Birth Rate Falls to Record Low in 2011

2. Birth Rate Needed to Maintain Current Population

3. A Nation of Singles – Implications For the Future

4. How Did We Become a Nation of Singles?

5. Conclusions – How Do We Turn the Trend Around?

Overview

One of the issues I have been focused on for the last several years has been the trend in demographics in the US and in developed countries in general. Our populations are getting older – we all know that. But the reasons why our populations are getting older are not widely understood by many Americans. Those reasons include the falling birth rate, the falling fertility rate, the falling marriage rate and the explosion in singles – people who never marry.

The US birth rate fell to a record low in 2011. The marriage rate is tumbling as well. And the number of single Americans is now at a record high. The implications of these developments are troubling, not only for the economy, but also for the investment markets and the continual expansion of the federal government. Government debt has spiraled out of control in recent years, and the demographics suggest that this trend will continue as we care for an aging population.

Today, we will look at some new information on demographic trends in the US and in the West in general that should concern you – and all Americans for that matter. This will be a continuing theme in my E-Letters in the months and