Generational Warfare Propaganda from the St. Louis Fed

In a FRED Blog post titled Changing demographics, the Fed's Maximiliano Dvorkin wants us to see this graph:

Graph #1: From the FRED Blog

I see the lines crossing. I see pretty significant swings, the one line up, the other down.

But then I see that the blue line shows the working-age population as a percent of total population. And the red line shows the retirement-age population as a percent of total population. I see that both lines show parts of the population as a percent of the total, and I wonder why they are not both shown on the same axis.

The one line is always 63.5% or more, while the other is always less than 14.5%. These lines are separated by half the U.S. population or more. That fact is hidden from view on Dvorkin's graph.

I put both lines on the same axis:

Graph #2: The Same as Graph #1 Except Both Lines Use the Same Vertical Scale

The demographic problem doesn't look quite so dire now, does it.


A few weeks back I found Circuit's old post on demographics at Fictional Reserve Barking. Circuit says "seniors are, and will remain, a relatively small share of the total population." You can see this in the second graph, but not on the FRED Blog graph.

Circuit says working people support everyone -- themselves, and people too old to work, and people too young to work, and people of working age who are not working. Everyone. He's right.

And as Jim points out, the baby boomers were all "carried" by the rest of the economy once before: from World War Two to the mid-1960s. Those years, as it happens, were the “Golden Age of Capitalism”.

There is an economic problem, but baby boomers ain't it.

If you think Dvorkin's graph exaggerates the demographic problem to the point of dishonesty, you might want to tell him yourself: Maximiliano.A.Dvorkin@stls.frb.org