Declining U.S. Birthrate Another Reason to Rein in Federal Spending

COMMENTARY Budget and Spending

Declining U.S. Birthrate Another Reason to Rein in Federal Spending

Jul 26th, 2021 3 min read

Commentary By

Rachel Greszler

Research Fellow in Economics, Budget and Entitlements

Emily Marsh

Summer 2021 Member of the Young Leaders Program at The Heritage Foundation

Ever-higher spending increases, accompanied by declining fertility rates, will almost certainly lead to a smaller economy. Jose Luis Pelaez Inc / Getty Images

Key Takeaways

2020 marked a record-low fertility rate of 1.64 children per woman and the sixth straight year with an outright decline in the number of births.

If fertility rates remain low, each American’s share of the national debt will continue to rise even if policymakers miraculously decide to limit spending.

Policymakers should support families by allowing them to keep more of their incomes to spend as they know best.

Initially, COVID-19 lockdowns were projected to produce a baby boom, but what ensued instead was a baby bust.

According to the Centers for Disease Control and Prevention, 2020 marked a record-low fertility rate of 1.64 children per woman and the sixth straight year with an outright decline in the number of births.

A fertility rate of 2.1 is needed to maintain a stable population.   

The pandemic and all its uncertainty likely contributed to the 2020 decline, but birthrates were already declining well before the COVID-19 pandemic.

American women have been having fewer children for some time now. The 3.605 million babies born in the U.S. in 2020 were 712,000 fewer babies than the 2007 peak in U.S. births.

And that fertility rate of 1.64 marks a significant decline from rates of about 2.0 in the early 2000s, and a peak of 3.77 in 1957.

As steep as the decline is in U.S. births, the increase in U.S. debt has been even more dramatic.

In 2020 alone, U.S. debt shot up by $4.21 trillion—a 16% increase in just one year. And since 2007, U.S. debt has more than tripled, from $9 trillion to the current $28 trillion.

That creates a double whammy for today’s young and yet-to-be-born generations; namely, fewer people left to pick up a higher tab.

Whereas a baby born in 2007 faced a debt of $30,532 per capita, that figure was $59,338 for a baby born in 2020.

If fertility rates remain low, each American’s share of the national debt will continue to rise even if policymakers miraculously decide to limit spending to the revenues they collect.

But responsible kitchen-table budgeting that ordinary Americans confront each day is anathema to politicians in Washington.

If the typical American household budgeted like the federal government, they would be making $63,179 each year, while spending $75,423 and putting $12,244 on the credit card—and that was before policymakers’ COVID-19 economic responses equated to putting $62,917 on the family credit card in 2020 alone. And that doesn’t account for the $6.4 trillion tax-and-spend agenda being pushed by the Biden administration and liberal members of Congress.

Already insolvent entitlement programs are shifting incomes and resources away from younger workers to older ones.

Ever-higher spending increases, accompanied by declining fertility rates, will almost certainly lead to a smaller economy.

A recent Federal Reserve report noted that lower fertility rates lead to slower economic growth.

America has enough unfunded entitlement programs. Before politicians consider adding new entitlements for everything from paid family leave to child care to community college, they should first fix what’s broken.

The best way to help young and future generations is to not saddle them with six figures of debt from the day they are born.  

President Joe Biden’s American Families Plan and American Jobs Plan claim to help families, but similar government programs have not historically encouraged work or marriage, which are key components of thriving families

Moreover, most European countries—the models for the American Families Plan—have lower fertility rates. Despite significant government programs and mandates aimed at supporting families, countries such as Austria, Denmark, and Portugal still have significantly lower fertility rates than the U.S.

People don’t have children because politicians pay them to do so.

Instead of forcing families to give up more of their incomes in exchange for fewer choices and less control over their circumstances, policymakers should support families by allowing them to keep more of their incomes to spend as they know best.

And they should support children by not saddling them with reckless amounts of debt, effectively requiring them to finance their own upbringing.

This piece originally appeared in The Daily Signal