That’s an interesting point that since pension funds will be net sellers of stocks in the future, it naturally means that there will be downward pressure on stocks at the index level. On the other hand, that money flows back into the economy, both as profits for healthcare companies (sector rotation within the index) and as an increasing wage bill for nurses, which leads to that money being spent elsewhere. So, in a way, it’s an economic stimulus paid for by selling equity assets. Stimulus is often good for the stock market as earnings rise. Simultaneous selling pressure and earnings growth would pull valuation multiples in different directions, but where would the equilibrium settle?
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I listened to a professor emerita’s views on elderly care on Areena today, and I wouldn’t have believed how little economic understanding is shown when things are presented as the truth on Yle.
The main point seems to be to raise taxes and put more money into elderly care.
Listen on Yle Areena:
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Stories and experts according to the target audience. When the next elections come, all politicians will get behind this argument because it is the only way to succeed in the elections.
One key reason for the fragile existence of Western democracies is the age structure of the electorate. Old uncles and aunts vote old candidates into power. Decisions favor elderly people.
Young voters are disappointed from one election to the next and from one country to another.
edit: that Yle link and a quote from it
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Many small municipalities are ruining their finances because their boards and councils are extremely hostile towards wind power, for example, which would currently guarantee at least some small level of vitality for the municipality. Mergers with other municipalities are also not carried out in time.
Surprise, surprise, the boards are mostly made up of older people.
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The Kurzgesagt channel addresses the demographic problem this time from the perspective of its home country, Germany. 14 min.
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