Wall Street Journal: Babies are Human Capital

The editorial page of the Wall Street Journal made an eloquent connection between Nancy Pelosi’s contraception policy and the population bust in Europe and Asia:

Ms. Pelosi’s remarks ignore the importance of human capital, which is the ultimate resource. Fewer babies would move the U.S. in the demographic direction of Europe and Asia. On the Continent, birth rates already are effectively zero, and economists are predicting labor shortages in the years ahead. In Japan, where the population is aging very fast, workers are now encouraged to go home early and procreate. Japan is projected to lose 21% of its population by 2050.

The age and growth rate of a nation help determine its economic prosperity. A smaller workforce can result in less overall economic output. Without enough younger workers to replace retirees, health and pension costs can become debilitating. And when domestic markets shrink, so does capital investment. Whatever one’s views on taxpayer subsidies for contraception, as economic stimulus the idea is loopy.