A number of these strategies will not only help overcome the resource challenge of global aging but will also lead to large economic gains for future generations, including faster growth in labor productivity and a higher standard of living for all age groups. On the other hand, many of the strategies will be quite difficult to implement. Some, like later retirement or adjusting benefits according to need, will challenge popular expectations. Some, like pronatal policies and stepped-up immigration, will trigger cultural and social controversy. Some, like investing more in children, may require more patience and wisdom than most governments now possess. And practically all of the strategies will be more acceptable in some countries than in others. Stressing filial piety, for example, will be easier in Asia than in North America, while mandatory savings accounts will appeal more to North Americans than to continental Europeans.

Setting Limits on Health Care

Even if these six measures are successful, however, global aging may still impose an unsustainable fiscal and economic burden unless the developed countries confront the special and especially daunting problem of how to set limits on health care. This will require a sensible redefinition of just what "health" means for an aging population.

Health spending is not growing at its present pace due to the proliferation of useless medical services. It is growing because of the continuous introduction of new technologies and treatments that are beneficial but expensive. And the pace of innovation may be accelerating. Pointing to an enormous wave of medical research now on the horizon, health technology expert William Schwartz insists that few governments have any idea of what is about to hit them. "Everything that's happened up to now in medicine is a prelude," he reports. "What's really ahead is stunning. It's going to be very expensive."

"Health," moreover, is not a fixed target. It is a subjective standard that has risen over time as society has become more affluent, less tolerant of risk and discomfort, and more prone to see happiness as the ultimate goal of life. This rising standard has interacted with medical advances to transform the practice of medicine. While health care once meant an occasional visit to the doctor, it has today become a lifelong process of diagnostics and fine-tuning in which any extra dollar is likely to confer some benefit.

Global aging will compel the developed countries to answer some difficult questions. Is health care a right of citizenship to which every person must be guaranteed unlimited access, or is it something more like food or housing, for which the government simply establishes a floor of protection? As the pressure on public health-care budgets grows, the second view may gain more support. Governments must eventually recognize that at some point it is less important to spend another dollar on health care than to spend another dollar educating children, investing in infrastructure, or cleaning up the environment. But at what point will the limit be drawn--and who will draw it? Should cost or probability of survival matter? What about "bad" genes or risky lifestyles? In short, who lives, who dies, and who decides?

Societies will differ in how they set limits on health care. In Europe and Japan, where patients are accustomed to deferring to their doctors and complying with government health-care standards, reform may require less public debate. Limits will be set implicitly as providers try to allocate scarce resources within fixed overall health budgets. A more rights-oriented society like the United States would never find such an approach acceptable. Some believe that only explicit guidelines will satisfy Americans' traditional sense of fair play. It is far from clear how these dilemmas will be resolved. One thing, however, is certain. No aging society can avoid the dreaded "R-word"--rationing. Whether implicitly (through market prices or professional discretion), or explicitly (through government regulation), access to publicly funded health-care benefits will have to be rationed.

Rising above Ideology

Global aging will become the transcendent political and economic issue of the 21st century. By the year 2015, according to UN projections, over one-third of Western Europe's adult population will be at or beyond today's eligibility age for publicly financed retirement. No later than 2035, East Asia will pass the same demographic benchmark; by 2055, South America will as well. So we must ask: As global aging progresses, who will be doing the work, paying the taxes, saving for the future, and raising the next generation?

These questions are less urgent in the developing world, where the aging trend is delayed and where government pension and health-care programs are less entrenched. These countries have time to overhaul their social-insurance programs before they reach maturity by, for example, substituting funded pensions for pay-as-you-go financing and thus avoiding some of the dilemmas facing their older, more affluent neighbors.

In the developed world, however, the demographic transformation no longer lies on the horizon. It has already arrived and is about to redirect world history, perhaps in unpredictable ways. How will global aging restructure the economy as many nations with shrinking workforces experience a long-term stagnation or decline in their real GDP? How will it affect global financial markets and regional economic unions like the European Monetary Union as different nations respond to the aging challenge with divergent benefit reforms and fiscal policies? How will it transform attitudes toward progress and posterity--as young people become less numerous and influential a lobby? How will it influence the geopolitics of the next century and the capacity of the great powers to maintain their security commitments--as today's global divide between rich and poor nations is redefined as a divide between older nations with shrinking populations and younger nations with still expanding populations?

Before taking effective action, leaders must rise above ideology and engage the practical realities. The political left must stop defending the expansion of retirement benefits as the cornerstone of progressive government and realize that they are fast pushing all future-oriented spending out of public budgets. The political right will have to move beyond a program of mere fiscal restraint and offer a coherent blueprint for how society will cope with tomorrow's vast number of elders. The new paradigm of aging that emerges must repeal the assumption that old age itself is a health problem, an assumption that can only lead to the conclusion that the government must spend whatever it can to provide a solution. Unfortunately, the government can never spend enough because old age can never be cured. Nations that do not repeal this assumption are heading for fiscal catastrophe.