The greatest demographic event to happen this century was the baby boom. From 1946 to 1965, 76 million live births were recorded in the United States alone, a phenomenon that's been responsible for everything from the surge in baby-food products in the '50s and early '60s to the roaring stock market of today, fueled in part by boomers investing for retirement. Peter Peterson, author of
Gray Dawn, looks ahead at the implications of the baby boom, and what he sees is not the bliss that many of us imagine for our golden years but rather an iceberg that threatens to sink the economy and disenfranchise subsequent generations.
As former chairman of Lehman Brothers and founding president of the Concord Coalition, Peterson, whose previous books include Will America Grow Up Before It Grows Old?, is no stranger to this topic. In Gray Dawn, he takes a worldview of "global aging," and considers countries such as Japan and Italy, where the problem of an aging population coupled with declining fertility are creating particularly acute and, in some cases, unsustainable generational disparities. Peterson writes that "We must make aging both more secure for older generations and less burdensome for younger generations." To this end he offers several solutions, among them encouraging longer working lives and requiring people to save for their own retirement. But avoiding the iceberg means turning the wheel now, before it's too late. Thoughtful, well-researched, and full of charts and statistics that do well to underscore Peterson's main arguments. If you've ever wondered what retirement might look like, you'll find this a provocative read. --Harry C. Edwards
The elderly constitute an increasingly larger share of the population, particularly in the most industrialized countries. Peterson (When the Boomers Retire, LJ 9/1/96), cofounder of the Concord Coalition and adviser to governments at various levels, warns that steps must be taken now to avert the crises, primarily financial, that demographic changes could bring. The near future will see each elderly person supported by fewer workers. Social programs differ around the world, as do current and future demographics, but none of the industrialized countries seems prepared for the upcoming demographic changes. Peterson also reflects on the world's political and financial power and how both might shift to countries with younger populations. He calls on leaders around the world to convene an Agency on Global Aging to discuss the issues and find global solutions, offering few answers but doing a tremendous service in keeping the issues open. Recommended for all public and academic libraries.?A.J. Sobczak, formerly with California State Univ., Northridge
Copyright 1999 Reed Business Information, Inc.
Review
"Pete Peterson's Gray Dawn is persuasive and moving. Those who care about public policy will ignore his warnings at peril of being ultimately judged uninformed, unserious, and unhelpful."
--Peggy Noonan, author of What I Saw at the Revolution
"Pete Peterson's new book demonstrates with conviction and eloquence the need to recognize that we face a social, political, and economic time bomb in the aging of America--and of every other industrialized country. The bomb can be defused, but only if we summon up the will to act soon. This book explains the options clearly and forcibly for political leaders and citizens alike."
--Paul A. Volcker, former chairman of the Federal Reserve
"Gray Dawn is a wake-up call. Declining fertility rates and rising longevity rates are evident in virtually every country, with profound and varying meaning in the short and long term. You'd better read this book and think hard about what the trends foretell. He's talking about you."
--George P. Shultz, former secretary of state
"Pete Peterson elucidates what may be the transcendent global policy challenge of the twenty-first century--and the one least discussed: the unsustainable, multi-trillion-dollar unfunded liabilities for social security and health care systems around the world. He illustrates how this growing crisis represents a global challenge not only to the solvency of governments, but to the economic and moral health of civil society. And he makes clear what can and must be done about it."
--Senators Sam Nunn and Warren Rudman, co-chairmen, The Concord Coalition
"Pete Peterson is the watchman on deck warning us all to wake up because of the 'Iceberg dead ahead!' His facts are explosive. His stories, rich. His solution, compelling."
--Diane Sawyer, ABC News
From the Inside Flap
onomies of the world are on a collision course toward a huge, as-yet-unseen iceberg: global aging. Increased longevity is a blessing, but it carries with it costs and questions few countries wish to deal with. This looming demographic challenge may become the transcendent issue of the twenty-first century, affecting not just our economies but our political systems, our lifestyles, our ethics, and even our military security. In <b>Gray Dawn</b>, Peter G. Peterson, the respected statesman of Washington and Wall Street, sounds the warning bell and prescribes a set of detailed solutions which, if implemented early, will prevent the need for Draconian measures later.<br><br>In today's developed world, people aged 65 and over represent 14 percent of the total population. That share will almost double by 2030. In the United States, the 85-and-over set will more than triple. And fertility rates are so low in many developed nations that populations may actually fall to half of today's size before t
From the Back Cover
"Pete Peterson's Gray Dawn is persuasive and moving. Those who care about public policy will ignore his warnings at peril of being ultimately judged uninformed, unserious, and unhelpful."
--Peggy Noonan, author of What I Saw at the Revolution
"Pete Peterson's new book demonstrates with conviction and eloquence the need to recognize that we face a social, political, and economic time bomb in the aging of America--and of every other industrialized country. The bomb can be defused, but only if we summon up the will to act soon. This book explains the options clearly and forcibly for political leaders and citizens alike."
--Paul A. Volcker, former chairman of the Federal Reserve
"Gray Dawn is a wake-up call. Declining fertility rates and rising longevity rates are evident in virtually every country, with profound and varying meaning in the short and long term. You'd better read this book and think hard about what the trends foretell. He's talking about you."
--George P. Shultz, former secretary of state
"Pete Peterson elucidates what may be the transcendent global policy challenge of the twenty-first century--and the one least discussed: the unsustainable, multi-trillion-dollar unfunded liabilities for social security and health care systems around the world. He illustrates how this growing crisis represents a global challenge not only to the solvency of governments, but to the economic and moral health of civil society. And he makes clear what can and must be done about it."
--Senators Sam Nunn and Warren Rudman, co-chairmen, The Concord Coalition
"Pete Peterson is the watchman on deck warning us all to wake up because of the 'Iceberg dead ahead!' His facts are explosive. His stories, rich. His solution, compelling."
--Diane Sawyer, ABC News
About the Author
Peter G. Peterson is chairman of The Blackstone Group, a leading investment bank. He chairs the Council on Foreign Relations and the Institute for International Economics. He is also a director of the Federal Reserve Bank of New York and is one of the founders of The Concord Coalition. A former secretary of commerce, Peterson has advised presidents from Richard Nixon to Bill Clinton. He is married to Joan Ganz Cooney, founder of Children's Television Workshop.
Excerpt. © Reprinted by permission. All rights reserved.
The challenge of global aging, like a massive iceberg, looms ahead in the future of the largest and most affluent economies of the world. Visible above the waterline are the unprecedented growth in the number of elderly and the unprecedented decline in the number of youth over the next several decades. Lurking beneath the waves, and not yet widely understood, are the wrenching economic and social costs that will accompany this demographic transformation-costs that threaten to bankrupt even the greatest of powers, the United States included, unless they take action in time. Those who are most aware of the implications of this extraordinary demographic shift will best be able to prepare themselves for it, and even profit from the many opportunities it will leave in its wake.
The list of great hazards in the next century is long and generally familiar. It includes proliferation of nuclear, chemical, and biological weapons; high-tech terrorism; deadly superviruses; extreme climate change; the financial, economic, and political aftershocks of globalization; and the ethnic and military explosions waiting to be detonated by today's unsteady new democracies. Yet there is a less-understood challenge-the graying of the developed world's population-that may actually do more to reshape our collective future than any of the above.
This demographic shift cannot be avoided. It is inevitable. The timing and magnitude of the coming transformation is virtually locked in. The elderly of the first half of the next century have already been born and can be counted-and the retirement benefit systems on which they will depend are already in place. The future costs can therefore be projected with a fair degree of certainty. Unlike global warming, for example, there can be little theoretical debate over whether global aging will manifest itself-or when. And unlike other challenges, such as financial support for new democracies, the cost of global aging will be far beyond our means-even the collective means of all the world's wealthy nations. How we confront global aging will have direct economic implications-measurable, over the next century, in the quadrillions of dollars-that will likely dwarf the other challenges. Indeed, it will greatly influence how the other challenges ultimately play out.
Societies in the developed world-by which I mean primarily the countries of North America, Western Europe, Japan, and Australia-are aging for three major reasons:
Medical advances, along with increased affluence and improvement in public health, nutrition, and safety, are raising average life expectancy dramatically.
A huge outsized baby boom generation in the United States and several other countries is now making its way through middle age.
Fertility rates have fallen, and in Japan and a number of European countries are now running far beneath the "replacement rate" necessary to replace today's population. The impact of so few young people entering tomorrow's tax-paying workforce, while so many are entering benefit-receiving elderhood, is of profound consequence.
As a result, I believe that global aging will become the transcendent political and economic issue of the twenty-first century. I will argue that-like it or not, and there's every reason to believe we won't like it-renegotiating the established social contract in response to global aging will soon dominate and daunt the public policy agendas of all the developed countries.
By the 2030s, these countries will be much older than they are today. Some of them may exceed a median age of 55, twenty years older than the oldest median age (35) of any country on earth as recently as 1970. Over half of the adult population of today's developed countries and perhaps two-thirds of their voters will be near or beyond today's eligibility age for publicly financed retirement. So we have to ask: When that time comes, who will be doing the work, paying the taxes, saving for the future, and raising the next generation? Can even the wealthiest of nations afford to pay for such a vast number of senior citizens living a third or more of their adult lives in what are now commonly thought of as the retirement years? Or will many of those future elderly have to do without the retirement benefits they are now promised? And what happens then?
This is not the first time I have spoken out on demographic trends and the clash between popular expectations and fiscal realities. In 1982, I began writing on the long-term challenges facing the U.S. Social Security system-a concern that is now, at last, moving onto the center stage of national discussion where it should have been long ago. After studying the early Reagan budgets, I spoke out against the danger of ballooning federal budget deficits, and began organizing national bipartisan efforts to control and reduce them. In the 1980s, five former Secretaries of Treasury and I founded the Bi-Partisan Budget Appeal, made up of 500 former public officials and business CEOs. In 1992, with Senators Warren Rudman and Paul Tsongas, I cofounded The Concord Coalition. This organization was devoted originally to balancing the budget. With the short-term budget outlook improving, it is now focusing on the long-term impact of ballooning spending on federal entitlement programs, which threatens to unbalance the budget again early in the next century, and on the great advantage of acting to reform them sooner rather than later. (It was in that context that the White House asked The Concord Coalition in 1998 to cohost a series of televised national conferences on the future of Social Security with an unlikely bedfellow, the American Association of Retired Persons.)
In 1996, I presented my views about the aging of America and the impending crisis in U.S. retirement programs in my book, Will America Grow Up Before It Grows Old? So, one might ask, why write another book on what sounds like the same subject? The answer is, it's not the same subject. My last book focused on America's own domestic problem. But while writing that book, I became aware that, imposing as the challenge of an aging society is in the United States, it is even more serious in Japan and much of Europe. In most of the other developed countries, populations are aging faster, birthrates are lower, the influx of younger immigrants from developing countries is smaller, public pension benefits for senior citizens are more generous, and private pension systems are weaker. Most of the other leading economies therefore face far worse fiscal fundamentals than we do. Even some major developing countries-China, for example-face serious aging challenges in the next century.
Given the instant and sometimes painful interactions within global capital markets and the likelihood of varying national responses to the coming fiscal challenge, I can easily envision that sometime in the next decade or two demographic aging will trigger unprecedented financial pressures, both on fragile regional economic arrangements such as the European Economic and Monetary Union and on the world economy as a whole. The economic and political outcome could make today's Asian or Russian crisis look like child's play.
Demographic aging is, at bottom, a global challenge that cries out for a global solution. That is why I have written this book.
