America is headed for a depopulation crisis.
That, at least, is the major takeaway of a new report released this month by the Congressional Budget Office. According to the CBO, if current trends continue, American deaths will outnumber American births in a mere eight years. With a united Republican government, we have an opportunity to address this upcoming crisis by building on the economic success of President Trump’s first term and making it easier for Americans to start or expand their families.
The projections are obviously uncertain, but recent trends paint a pretty dismal picture. Just last year, the CBO had hoped that births would outnumber deaths until at least 2040. New data forced them to revise their estimates sharply downward. If anything, this year’s projections may still be too optimistic.
The main problem is declining birth rates, which are now the worst they have ever been and well below replacement level, with no sign of improving. Notably, this isn’t just a product of changing social attitudes. People say they want significantly more children than they ultimately end up having, and if that gap were to be closed, the population crisis would disappear overnight.
Until then, however, demographic decline is on the way — alarmingly quickly in some areas. For example, the number of young Americans (under the age of 25) will start to decline in 2027, just two years from now. In that same timeframe, the number of American seniors is projected to increase by at least six percent. In short order, American seniors will outnumber American children by a sizable margin.
This is obviously a disaster for many reasons, including economically — for our businesses, social programs, tax revenues, etc. The ratio of working-age Americans to seniors is already the lowest it has ever been, and it’s getting worse by the year, dropping below four-to-one for the first time in 2012 and below three-to-one a little more than a decade later. CBO has us racing towards almost two-to-one very quickly.
Economic analysis, however, doesn’t capture the whole picture. Population decline hurts the entire nation, not just the GDP. To state the obvious, a country needs people. When the people start disappearing, the country disappears along with them.
At least many Republicans at the top of the Trump administration seem to recognize the magnitude of the threat, most notably Elon Musk and Vice President J.D. Vance. During last year’s campaign, Trump and his team issued a number of serious proposals to help resuscitate the American family.
The simplest among them can be accomplished in just a few months: saving Trump’s child tax credit. If allowed to expire this year, the tax break, which has already lost more than 20 percent of its value due to Biden’s inflation, will be cut in half. A tax hike for families with children is an awful way to deal with a population crisis, to say nothing of the looming debt crisis. To state the obvious yet again, it’s hard for America to pay off its debts when its work force is shrinking.
Extending the Tax Cuts and Jobs Act (TCJA) implemented during Trump's presidency will undoubtedly fuel economic growth and increase household family incomes. The TCJA provided significant tax relief to middle-class families and businesses in 2017 and is in danger of expiring for good without congressional action. By extending the popular law, Washington can continue to alleviate the financial burdens that discourage potential parents from having children. The enhanced child tax credit, along with an improved economy, would contribute to making it more affordable for families to grow.
We should also ensure the business-side tax provisions are retained and strengthened so the economic heart of America keeps pumping. Importantly, keeping business taxes low is essential for maintaining a robust economy that supports job creation and leads to higher wages for all income groups. Congress should also heed President Trump’s call for lowering the corporate tax rate even further to enhance America's competitiveness on the global stage and beat China. By reducing the tax burden on businesses, we encourage investment, expansion, and innovation. This not only preserves existing jobs but also creates new opportunities, giving young adults the economic confidence to start and support larger families.
Things get even harder if the good-paying jobs American families rely on start disappearing, such as the 6 million jobs at risk if Republicans fail to revive Trump’s pro-manufacturing policies. Simply preserving the status quo won’t be enough — the child tax credit should be higher than it was before inflation, for example — but Republicans certainly shouldn’t let the problem become even worse.
Elon Musk was right when he predicted last year that current trends could “lead to mass extinction of entire nations.” We should, at the very least, do everything in our power to make sure that America isn’t one of them. Whether Republicans are able to save Trump’s pro-family tax policies will give us a good sense of how likely that outcome will be.
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