[gumby]

What's the downside or "the way of Japan"?

They had a terrible 20 year economic hangover due to a massive bubble poorly handled, and that definitely had massive negative social spillover effects. But over the past 15 years social surveys have shown increasing (and solidly net positive) happiness and satisfaction with the quality of life across all demographic groups except the extremely old. Notably, over the past decade Japanese life satisfaction levels are higher than the same surveys show in North America and Europe.

An economic system that depends on a pyramid model is ultimately unsustainable. I don't mean in the "there's a population bomb problem the planet's going to die unless we do something!" sense -- I don't in fact agree with that. But there's no reason why the system can't and ought not achieve balance.

[mlindner]

The downside of "the way of Japan" is that they'll shortly have no one to pay for all the old people. Keeping old people alive is expensive.

In the US young people pay old people's social security income. You see how many people are talking about the aging baby boomers right? Imagine that but much worse.

[gumby]

Increased labor productivity through automation (and allowing people to live longer on their own through assistive devices) should ameliorate this.

There's no shortage of young people globally so Japan could always import more if they wanted to.

Again, a pyramid-based model can't go on forever.