“There will be no West if this continues,” professed Elon Musk on X in September 2025. The crisis in question was none of the usual suspects—climate change, nuclear war, autocracy—but rather dropping fertility rates. Musk, to his credit, has personally endeavored to solve this problem one kid at a time: He is believed to have fathered 14 children. Unfortunately for the United States, his abundance of offspring remains an anomaly; the total fertility rate (TFR) in the US sits at 1.6, significantly below the requisite replacement rate of 2.08 at which populations can sustain themselves.
Musk’s concern is valid. Failing to address this problem will burden government finances and stall economic growth. Consider the already-struggling Social Security program: Assuming the TFR holds at 1.6, the 2099 annual balance (the difference between revenue and expenditure as a percent of taxable income) will be -7.39 percent. Using the present-day 12.4 percent tax as a baseline, at the current TFR, Social Security taxes would have to rise by 59 percent just to maintain current benefits. At replacement TFR, taxes would still rise but by only 28 percent. That is just one program: Over the next century, an economic downturn driven by a falling population will exacerbate government debt obligations and increase the burden of an aging population. While this population-driven economic crisis might be alleviated through immigration, massive demographic shifts will likely generate backlash.
As such, President Donald Trump has advocated for pronatalist policies designed to increase birth rates. Options on the table have included $5,000 baby bonuses to parents or the establishment of $1,000 ‘Trump accounts’ for each baby born between 2025 and 2028. Intuitively, these policies make sense: We should be making it easier for people to have kids. But the policies proposed by Trump are unlikely to change the behavior of those choosing not to have children and will redirect money away from true cost-saving initiatives. It costs nearly $400,000 for a middle-class family to raise a child in the United States; $5,000 is little more than a distraction masking sky-high childcare and education costs. Even Hungary, which spends a staggering 5.5 percent of its annual GDP on pronatalist transfer payments, has seen birth rates fall after initially rising.
In the United States, many lower- and middle-class women (whose reduction in child-bearing has led to most of the recent decline in TFR) simply do not want more kids, making a TFR rebound nearly impossible despite incentives. Much of the reduction in TFR has resulted from a 23 percent fall in unplanned pregnancies since 1993. Likewise, the number of pregnancies per 1,000 females aged 15–17 has fallen from 75 in 1989 to just 11 in 2020. In this context, the only cost-effective means of raising fertility is social regression: banning abortions and reducing access to sex education and contraceptives.
Baby incentives will fail as long as their proponents misunderstand the scale of the problem. We can look back to the 18th century to find a similar dilemma. Back then, English economist Thomas Malthus predicted that population growth would far surpass food production, resulting in mass starvation and death. No such die-off occurred, despite the exponential population growth observed across the 19th and 20th centuries. Although our current problem is of an opposite nature, we can find a solution in the same mechanisms that prevented Malthus’ mass die-off.
Ultimately, it was technology that prevented the prophesied Malthusian hellscape. New technologies allowed us to industrialize food production to keep up with population growth. From agronomist Norman Borlaug’s ‘Green Revolution’ to the Internet, technology has improved productivity and, by extension, the consumption per capita measure of wellbeing.
In the 21st century, technological advances—chiefly AI—will drive overall economic growth, preventing dependency- and debt ratio-driven spending crises. Suppose AI does indeed achieve the potential efficiency increases ascribed to a $5 trillion Nvidia valuation. In this case, labor will become significantly more productive, possibly mitigating any economic decline associated with a reduced labor force. McKinsey and Goldman Sachs both estimate that AI will add between 0.5 and 3.4 percentage points to productivity growth by 2075. The Wharton School estimates that AI will raise living standards by 3.7 percent by then. If the median estimates hold true, a decreased fertility rate will no longer be the problem it is currently made out to be.
However, even if AI ends up influencing the world no more than other recent technological innovations like laptops or smartphones, the current breed of pronatalist policies will still offer limited returns. Governments will be better off investing in cheaper healthcare (especially at the end of life) and better support for the elderly. Medicare, for example, highlights that variations in healthcare costs render any fertility-sensitivity considerations null. For a fertility bump of 0.1, the 75-year deficit decreases by just $425 billion. If healthcare costs grow 1 percent faster than expected? An incomprehensible $15.99 trillion will be added to the 75-year deficit, dwarfing the Social Security fertility sensitivity considered earlier. Preventative health care, emphasis on primary care networks, and reduced drug costs will all go far in preventing such additions to the deficit.
Historically, economic growth has been a product of both pushing the technological frontier and an increasing population. The US labor force, though projected to continue growing through 2060, must recognize that overall growth will not keep pace with historical trends, but so long as debt is kept in check, standards of living will. GDP per capita, not GDP alone, is what matters. Some economic theory even suggests that “slower population growth can be expected to increase the ratio of capital to labor, which in turn will increase the level of per capita income.” In essence, a smaller, more equal population may, in the short run, be able to leverage an excess in capital per capita for more education and more well-being.
Scholars have long recognized this overstated problem: In 2022, Norwegian demographist Vegard Skirbekk wrote that if we appropriately reassign capital investment to educating a slimmer workforce and invest in women’s labor force participation, “we can decline and prosper.” Likewise, Professor David Weil wrote that “much of the worry about sub-replacement fertility is overstated. Quantitatively, the net effect of even a large fertility reduction on the US economy would be a relatively small decline in the standard of living.” Even with fertility drops, students will continue to gain advanced degrees at similar rates, preserving the majority of innovation and growth along the technology frontier.
Worrying about a suboptimal population catastrophe decades away is simply not pragmatic, and, as such, learning to live with an aging population may be the optimal strategy. A focus on balanced budgets, affordable childcare, quality education, and reduced healthcare costs—while keeping an eye on the supposed “AI revolution”—will be best. Even if your definition of the purpose of humanity is to be fruitful and multiply, ultimately, a leaner, more efficient human population might be the one better adept at managing climate change or preserving social cohesion as AI becomes more widespread, maximizing human utility in the long run.