Japanese Population Decline - Intro

As a Japanese-American guy who plans on doing a lot of reproducing in his lifetime (ladies?) I think a lot about Japanese population decline.  Which is why I decided to write a series of essays that specifically discuss this issue.  Japan's population decline is the most pertinent issue facing the country.  According to the Economist:

Japan's birth rate fell below the replacement rate of 2.1 in the early 1970s. It slid to a low of 1.26 in 2005, before inching up last year to 1.32—nobody calls it a recovery. In 2005 Japan's population began to fall in absolute terms, despite increasing life expectancy. It is about to shrink at a pace unprecedented for any nation in peacetime. The National Institute of Population and Social Security Research estimates a total population of 95m by 2050, with the elderly accounting by then for two-fifths of the total.

The implications to Japanese society are enormous.  From a purely conceptual level the Solow growth model predicts a decline in national GDP directly proportional to the decline in population.  For more concrete consequences one need only look at rising per-capita healthcare costs and the imminent social security meltdown.    Specifically I'd like to address:

1. What is causing it?
2. What can be done?

Who cares?  Well, me for one.  I am one proud Japanese dude but when I look at the graph above I think 'wow, the party's almost over'.  Of course, Japan is not the only country facing this problem.  Similar replacement rates exist in European countries particularly France, Italy and Germany.  China, with it's 40 year-old one child policy is beginning to face the music.  The truth is population decline is an issue that will effect everyone in some way.  Japan is a just an exemplary in this aspect.

To be continued...