impact on future income of young of old: drag

http://www.theglobeandmail.com/report-on-business/economy/growth/canadians-longevity-starting-to-weigh-on-economic-growth-boc/article2391986/

Speaking in Toronto, Jean Boivin – one of Governor Mark Carney’s five deputies – said the bank’s 2.2 per cent projection for the economy’s “potential growth” rate in 2014 would be 0.2 percentage point higher without the effects of people living longer while the share of working people shrinks. The drag from aging will subtract from potential output for the rest of this decade, he said, and in 20 years average incomes could be 20 per cent lower if families, businesses and governments don’t adjust...

“There are only three options: we either find more work, greater productivity or higher savings.”

In addition, Mr. Boivin warned, the less we adjust now, the worse the burden on future generations.

“As much as two-thirds of the average income loss due to the absence of an adjustment to aging – the 20 per cent figure I mentioned earlier – could be regained if productivity grew at a rate close to its average over the past 50 years, instead of the anemic rate experienced over the past decade.”

(D - our productivity has been falling behind the American rate for decades...)

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D - I have bad news for you. Boomers are just gonna keep living LONGER, as we make more medical advances. Take, for example, this promising "vaccine versus heart attacks" -
http://www.vancouversun.com/health/Vaccine+stop+heart+attacks+could+here+years/6388028/story.html

A vaccine delivered in an injection or nasal spray to prevent heart attacks could be available within five years.

Scientists have discovered that the drug stimulates the body's immune system to produce antibodies which prevent heart disease by stopping fat building up in the arteries.

It is the first time that the underlying cause of heart disease has been targeted. Current treatments focus on using drugs to reduce cholesterol levels and blood pressure.

The vaccine can cut the build up of fat in arteries by up to 70 per cent, according to tests by researchers at Lund University in Sweden. The fatty deposits cause arteries to narrow, meaning the body has to work harder to pump blood, and can lead to a heart attack.

Prof Peter Weissberg, the British Heart Foundation medical director, said the vaccine was "very promising".

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D - be afraid. Y'know, the very first pension plan would have been sustainable...

http://www.mapleleafweb.com/features/canada-pension-plan-overview-history-and-debates

In 1927, the federal government introduced the first Old Age Pensions Act, establishing a national pension scheme...
The maximum pension provided was $20 per month and $240 per year, and was made available to all British subjects over the aged 70 or older who had lived in Canada for 20 years (though Status Indians were excluded). The pension, however, was limited to seniors whose annual income was less than $350.

D - we'll look back and wish we'd left it like that...

Imagine that: Boomers that have all retired (and at an earlier age than you are allowed to) just... lingering. Absolutely refusing to just kick the bucket. Ending up with a whole lot of centenarians. Gah!