Low US Fertility, Aging and AI Threaten Long-Term Fiscal Stability

New federal data showing the U.S. fertility rate falling to a record 1.57 children per woman in 2025 has sharpened focus on the profound economic and fiscal strains an aging society will place on future generations of workers. The figure, released last week, came in below even the Congressional Budget Office’s projections from the prior year and remains far short of the 2.1 births per woman required for a stable population without immigration. The United States has not reached that replacement level since the Great Recession.

The immediate effect is not a shrinking population but a rapidly aging one. In 2000, there were roughly 24 Americans aged 65 or older for every 100 working-age adults. By mid-century that ratio is expected to reach 43 per 100, according to CBO forecasts. The shift places growing pressure on the tax base that funds Medicare and Social Security. Spending on these old-age entitlements is projected to rise from 6 percent of gross domestic product at the turn of the century to 12.7 percent by 2055, driven largely by demographics. That increase, combined with interest on the accumulating debt, threatens to crowd out other federal priorities and saddle younger cohorts with higher tax burdens or reduced benefits.

The trajectory stands in contrast to the overpopulation panic that shaped much of the environmental debate for decades. Paul Ehrlich’s 1960s warnings that unchecked human numbers would exhaust resources and produce mass famine captured the public imagination and, by some accounts, discouraged younger generations from having children. Those predictions did not materialize. Instead, advanced economies are confronting the opposite problem: sustained sub-replacement fertility that erodes the demographic foundation of pay-as-you-go entitlement systems.

The numbers reflect deeper changes in American life. Women are marrying later, pursuing longer educations and careers, and facing elevated costs for housing, child care, and education. These costs have risen faster than wages in many parts of the country, partly because of regulatory barriers, zoning restrictions, and the steady expansion of government spending that must ultimately be financed by taxes or borrowing. The result is a shift in incentives that makes larger families less economically attractive for many middle-class households.

In response, some conservative policy organizations are urging direct government action to reverse falling marriage and birth rates. A January report from the Heritage Foundation titled “Saving America by Saving the Family” calls for an array of federal initiatives. These include HHS-run “marriage bootcamps” for cohabiting couples with children, featuring government-funded education in relationship skills, parenting, and father involvement. Successful participants would receive $5,000 on their wedding day and be paired with mentor couples. The report also proposes a national messaging campaign with slogans such as “Give her a ring before she gives you a baby.”

Further recommendations include expanding so-called Trump Accounts that give every newborn a $1,000 government investment account and creating New Early Starter Trust accounts seeded with at least $2,500 at birth. Beneficiaries could withdraw the funds, with tax advantages, upon marrying or turning 30. The explicit goal is to use public money and federal bureaucracy to make early marriage and family formation more financially appealing.

Past federal efforts to engineer stronger families through similar programs have produced only modest results, a fact the Heritage authors themselves acknowledge. Government attempts to alter intimate personal decisions about marriage, childbearing, and career timing frequently encounter the law of unintended consequences. People respond to the full range of incentives they face, not merely the ones highlighted in a federal pamphlet or grant program. When public policy subsidizes certain behaviors while regulatory and tax policies raise the cost of others, the net effect can differ sharply from what planners intended.

The demographic challenge is real and will not solve itself. An older society with fewer workers supporting more retirees faces slower economic growth, higher dependency ratios, and difficult choices about entitlements. Yet experience suggests that centralized bureaucratic solutions often prove less effective than broad-based improvements in economic opportunity, reduced regulatory burdens on families, and cultural norms that value self-reliance and long-term thinking. How policymakers weigh these competing approaches will shape not only birth rates but the fiscal health of the nation for the next half-century.