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Their rising needs are likely to trigger an increase in governments' health care spending.
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Parker said the increase in government outsourcing would probably continue.
Construction activity unexpectedly rose in September, buoyed by an increase in government projects.
Moynihan added: "There has been a huge increase in government control in the past 20 years.
But although Reagan cut tax rates, he also oversaw a large increase in government spending.
The largest increase in government health-care provision since Medicare was George W. Bush's prescription-drug benefit.
In both the United States and Europe, a significant increase in government spending remains controversial.
But a big increase in government debt tends to push up interest rates.
The plan included a net increase in government revenue of about $1 trillion over a decade.
Since there are no spare resources, any increase in government demand would just replace spending elsewhere.
The compromise regulators devised was to assume a sharp increase in government bond yields.
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