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Gray Dawn: The Global Aging Crisis
Peter G. Peterson is the author of Gray Dawn: How the Coming Age Wave Will Transform America-and the World. He is Chairman of The Blackstone Group, a private investment bank, Chairman of The Institute for International Economics, Deputy Chairman of The Federal Reserve Bank of New York, Co-founder and President of The Concord Coalition, and Chairman of The Council on Foreign Relations.See more by this author
The list of major global hazards in the next century has grown long and familiar. It includes the proliferation of nuclear, biological, and chemical weapons, other types of high-tech terrorism, deadly superviruses, extreme climate change, the financial, economic, and political aftershocks of globalization, and the violent ethnic explosions waiting to be detonated in 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.
Over the next several decades, countries in the developed world will experience an unprecedented growth in the number of their elderly and an unprecedented decline in the number of their youth. The timing and magnitude of this demographic transformation have already been determined. Next century's elderly have already been born and can be counted -- and their cost to retirement benefit systems can be projected.
Unlike with global warming, there can be little debate over whether or when global aging will manifest itself. And unlike with other challenges, even the struggle to preserve and strengthen unsteady new democracies, the costs of global aging will be far beyond the means of even the world's wealthiest nations -- unless retirement benefit systems are radically reformed. Failure to do so, to prepare early and boldly enough, will spark economic crises that will dwarf the recent meltdowns in Asia and Russia.
How we confront global aging will have vast economic consequences costing quadrillions of dollars over the next century. Indeed, it will greatly influence how we manage, and can afford to manage, the other major challenges that will face us in the future.
For this and other reasons, global aging will become not just the transcendent economic issue of the 21st century, but the transcendent political issue as well. It will dominate and daunt the public-policy agendas of developed countries and force the renegotiation of their social contracts. It will also reshape foreign policy strategies and the geopolitical order.