From a demographics perspective, it is noticed that an ageing
population affects the macroeconomy significantly. A large portion
of the ageing population's consumption is financed by the public
sector, which causes government expenditure to increase, hence,
causing a greater budget deficit. e.g. Expenditure on social
security, medicare,medicaid, etc.
From another perspective, if the population is ageing, labor
force growth rate slows down , whereby reducing tax revenues for
the government, which increases debt. Hence, increasing the budget
deficit.
It is noted that the government debt(hence budget deficit)
would continue on an upward trend, relative to the GDP.