Economic forecasts bring concerns about the future
At a recent retreat, I heard an interesting presentation by an economist predicting what New Hampshire would look like several decades from now and in the period between now and then. What I heard did not necessarily make me optimistic. Coupled with a number of subsequent experiences, the worry deepened. The largest segment of the population remains the baby boom generation. Shortly, that generation will reach the age of 60 and begin to retire. As has been true throughout its history, the focus of the Baby Boom generation will become the focus of the country, to a large extent. Focus on education will diminish, and the largest growth industry in employment will be health-care services, largely funded by insurance programs and the government. Retail business follows that, with manufacturing and other high-paying jobs decreasing. Housing demand (and jobs) will remain strong as people keep moving here. Income will increase for the “haves” and decrease for the “have-nots,” with many of the newly created jobs being at lower wages than the average present jobs. Education needed to train for those jobs will be of a different kind than now. The number of workers and the amount of salaries they are paid will create a smaller base to support the older workers and retirees. All in all, a picture that is not rosy for “producing” anything in New Hampshire, or having a strong economic base. This disturbing picture is ameliorated somewhat by the fact that New Hampshire has become a good place for wealthy retirees to move, but that has put pressure on housing. The workers with lower incomes will face higher pricing in housing a squeeze that already is apparent. Following this disturbing description (and the economic forecast was in much more detail than those items mentioned), I attended an Easter Seals conference in Washington, D.C., largely concerned about maintaining Medicaid to provide services for the neediest among us, as well as severely disabled young people and adults, especially the elderly. Medicaid primarily covers elderly people in nursing homes who cannot afford care, but the growth rate - coupled with the economic forecast described above - makes it obvious that paying for the health care for those increasingly demanding elderly will become more and more difficult, and the government’s priorities are going to have to be focused if economic calamity is to be avoided. This discussion was in the context of a “reconciliation bill” being considered in Congress to cut between $35 billion and $50 billion from the budget, a response somewhat related to the amount to be spent on the Katrina clean-up along the Gulf Coast and the cost of the Iraq war. This is a major public policy dilemma. It is one that will take discipline, hard choices and politicians acting like adults and not giving in to every perceived public demand, if it is to be solved. It may even require raising more money through taxes, not just debt!