America's Quiet Crisis Impacting Your Money, LFG Daily - November 17, 2025

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America’s Quiet Crisis: Population Collapse, Productivity Myths, and the Future of Financial Stability

For years, economists have warned about inflation, federal debt, market bubbles, and recessions. But there’s a bigger economic storm forming quietly in the background—one that could reshape everything from Social Security to housing markets to stock returns: a collapsing population growth rate.

And unlike the headlines about AI, interest rates, or elections, this one doesn’t make for flashy TV segments. But it should.

The U.S. Is Running Out of People

For decades, American prosperity rode on one simple economic engine: more people producing more goods and more services, fueling more consumption, more tax revenue, and more innovation. A growing population is the foundation of the American economic model.

Today, that model is breaking.

Birth rates have fallen below replacement levels for over a decade. Households are smaller, people are waiting longer to have children, and many are choosing not to have kids at all due to cost, lifestyle preferences, or economic uncertainty. Immigration growth has slowed relative to long-term needs.

This is how great economic powers lose their footing—not through a sudden collapse, but through slow demographic erosion.

The False Promise: “AI Will Solve It”

A lot of folks wave off demographic decline and say, “Don’t worry—AI will take care of productivity.” It’s a nice theory. But it ignores something fundamental:

AI cannot consume. AI doesn’t buy homes, invest in retirement accounts, pay taxes, or raise families.

You can’t run a modern economy on algorithms alone.You need people—workers, innovators, savers, entrepreneurs, taxpayers.

Even if AI makes each worker 30–50% more productive (a very optimistic scenario), the math doesn’t magically fix itself. You still need a growing base of human beings to support:

• Social Security and Medicare

• Healthcare and long-term care industries

• Real estate and housing markets

• Consumer demand

• Small business creation

  
  

Without population growth, economies stagnate. Look at Japan. Look at parts of Europe. Productivity gains have never fully offset demographic decline.

The Hidden Cost: Rising Government Dependence

Here’s the uncomfortable truth:

When fewer young people support more retirees, government spending skyrockets.

The U.S. already runs massive deficits in a growing population. Imagine those same obligations in a shrinking one. Without enough people working and paying taxes, the government is forced to:

• Raise taxes

• Increase borrowing

• Expand social programs

• Intervene more in private markets

  
  

It’s the opposite of what we want as advocates for free markets and small, efficient government—but the math pushes us there if demographic decline continues.

And once a country goes down the road of higher reliance on government, it’s extremely hard to reverse. Markets get distorted. Entrepreneurs slow down. Innovation lags. Growth stalls.

Behavioral Shifts Are Making It Worse

Demographics are only one part of the equation. The other part? Consumer behavior.

Younger generations are dealing with:

• Higher housing costs

• Higher education costs

• Higher taxes

• Higher expectations for lifestyle

• Lower patience for delayed gratification

  
  

That’s a dangerous mix for building families, long-term savings, or entrepreneurial risk-taking. We’ve built a culture of spending without saving, consumption without production, and expectations without tradeoffs.

In the long run, that accelerates demographic decline—and the financial instability that comes with it.

What This Means for Investors and Financial Planning

From a planning perspective, demographic decline isn’t theoretical. It affects:

1. Long-term market returns

Slower population growth generally means slower GDP growth—which means more modest market returns over the long run.

2. Higher future tax burdens

To fund Social Security, Medicare, and other aging-related obligations, taxes almost certainly rise.

3. More volatility in entitlement programs

Benefits may be reduced, thresholds may shift, and eligibility could change.

4. A greater need for personal responsibility

The less we can rely on government programs, the more we need:

• Retirement savings

• Private healthcare planning

• Long-term care strategies

• Diversified income sources

  
  

In short: you can’t depend on Washington to solve a math problem that has no political solution.

Where Does This Leave Us?

Population decline is not destiny—but it is a risk most Americans are ignoring. Demographics move slowly… until suddenly they hit like a brick wall, and the entire economic model has to adjust.

If the U.S. wants strong markets, strong families, and a strong economy, we need more people, more producers, more builders, more savers—not just more software.

And individually, this is a reminder that your long-term financial security will depend less on the government and more on the decisions you make today. That’s where real planning matters.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

I’ve talked about how there are a variety of ways to look at what happened last week, and today I want to look at it from a liquidity perspective. If you use my growth, inflation, and liquidity model, very little has changed with growth and inflation has actually improved. From a fundamental perspective, it’s liquidity that’s been hit.

I think you can see this both from a top-down and bottom-up perspective. From a top-down perspective, and as mentioned on Thursday, Fed head Powell indicated that a December rate cut isn’t a given, which moved stocks down from all-time highs. Then, we finished off this week with several Fed Presidents echoing that sentiment, moving expectations of a December cut from nearly 100% to 44%.

That hurts both because incremental cuts help stimulate the economy and the mix of lower inflation expectations and a hawkish Fed raises real rates, which is a break on longer-duration risk assets like gold, bitcoin, and growth stocks. Basically, farther-out gain expectations are functionally considered to be worth less.

That real rate retrenchment has also helped credit spreads hit the top-end of their recent range, which shows the bottom-up stress. From the top, liquidity has been stressed, while from the bottom, credit spreads have been getting more worried.

Additionally, the government shutdown has halted the ability of the government to add liquidity, and that continued for a record-long time. In fact, the government has been acting as a break, as they still collect tax receipts but sequester them, waiting for the government reopening.

Secondarily, while China has been spending a fair amount of time stimulating, they recently indicated they’re not interested in providing more support, despite signs of a slowing economy. Really, no major central bank seems to be providing liquidity, right now.

I wonder if some of the trouble on Thursday and Friday were that expectations for an explosive recovery were too high. Back when we had another long shutdown in 2019, it ended on Jan. 25th, but backpay didn’t show up until Jan. 30th or Feb. 1st. While the overall market reaction was quite positive, the initial reaction was a little messy, as you can see below. The arrow is where the government reopened and we started with a little sell-the-news reaction. Things got much better.

I wouldn’t put all my money into a sample size of one, but I think it’s fair to say that it may be hasty to worry about a selloff. Obviously, the details are different, as back then the market sold off pretty hard prior to the shutdown, then bounced when the shutdown started. This time, the market held up until the Fed started taking away rate cuts.

Nonetheless, a long shutdown does cause damage, and it will take some time for liquidity to come back. Last time, the initial Treasury drain (and corresponding initial boost for markets) took place over roughly five weeks. There’s no reason to think the government has gotten any faster, over time.

We certainly have more going on than just liquidity issues, but that particular stress seems likely to be getting better in the weeks to come. As I hope I showed, that liquidity took some time to come back last time, and there’s no reason to think we shouldn’t see something similar, here. If we don’t see improvement in the next week or two, then we can get more worried, but if past is prologue, better days should be ahead.

The Fed’s Logan said it would be hard to support another cut.

The Fed’s Schmid banged the same drum of inflation concerns.

Fed head Brainard actually said something different, that they should err on the side of preventing greater labor market weakness. Ultimately, December rate cut odds drifted a bit lower, now at 45%.

Auto loan delinquencies are on the rise.

Japanese GDP was -0.4% q/q vs. exp. -0.6%.

Japan’s 20Y bond yield hit the highest since 1999, in a sign of carry trade stress, as Japan considers a $110B stimulus package.

Bitcoin briefly wiped-out YTD gains over the weekend but has since bounced back, some.

GOOG is up 5% on news Berkshire Hathaway (BRK.B) invested $4.9B.

For all the craziness last week, SPX actually closed the week marginally positive. We’re seeing a modest continuation of that this morning, as Treasury funds should be working their way back into the economy.

Yet more Fed speakers, today, along with NY Fed Manufacturing.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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