NEW YORK ( TheStreet)--A few weeks ago, I had journalist Jonathan Last on my radio show. Last's most recent book, "What to Expect When No One is Expecting," details what we might expect from America's population implosion.That's right, implosion. The alarmist 1968 Book, "The Population Bomb," written by Stanford University Professor Paul Erlich, which predicted mass starvation and other privations, has largely been refuted as fertility rates over the last 40 years have fallen below the so-called replacement rate. The U.S. replacement rate is 2.1, meaning that if the average woman in the population has 2.1 children, the population will remain constant. Last wrote, "We have touched the replacement rate once or twice in the last 40 years."
The population trend sets in motion ideas on investing for long-term growth and cash flow, and in the nearer term offers clues about our economy and immigration. According to Last, "When your fertility rate is below replenishment level what happens is, over time, the age and structure of the population inverts. You end up with more old people then young people, and that then sets off a whole chain of economic reactions." For instance, the debates about Social Security and Medicare are really conversations about the fertility rate. The reason the programs are falling apart and are so expensive is that, according to Last, we have not been making enough future taxpayers to sustain the programs. Likewise, the impact on immigration could be just as far reaching. "Without the immigration we have received over the last 35 years, the United States would be in much worse demographic shape than we are now," Last said. The challenge, Last said, is that immigration rates tend to fall as fertility rates fall. Because countries in Central and South America are experiencing population declines, net immigration from those countries to the U.S. has been zero. "Mexico, which has traditionally accounted for two-thirds of immigrants into America, has sent us a net of zero immigrants over the last five years," said Last. As a result, the great debate on immigration may well be moot, and "whatever political decisions we make here on our side may not ultimately matter."