[ame=http://www.youtube.com/watch?v=bb7AZED2r0o]YouTube - America's Debt is Trivial. Naysayers are wrong.[/ame]
America's debt is trivial.
- Thread starter Dispel
- Start date
Interesting video..
I don't understand the bit about labour shortages, I'm sure he explains it more in his book but right now it makes no sense.
Decreasing population doesn't necessarily cause labour shortages. Population size isn't important, its the ratio of employers:employees that matters. He gives no reason why the ratio would grow faster on one side or the other. He just says that the worlds richer countries are going to see their population shrink away and this is going to lead to labour shortages, which makes no sense.
Anyway like I said I'm sure he gives a reasonable argument in his book.
I don't understand the bit about labour shortages, I'm sure he explains it more in his book but right now it makes no sense.
Decreasing population doesn't necessarily cause labour shortages. Population size isn't important, its the ratio of employers:employees that matters. He gives no reason why the ratio would grow faster on one side or the other. He just says that the worlds richer countries are going to see their population shrink away and this is going to lead to labour shortages, which makes no sense.
Anyway like I said I'm sure he gives a reasonable argument in his book.
I'm not sure whether a shrinking population would in fact create labor shortages (although if labor pool shrinks but demand stays the same it makes sense, number of 'employers'/demand for labor would not also shrink in export-based industries for example) or just low unemployment, but there's a whole swag of economic problems that the shrinking/aging population will create for countries like Japan, Russia and Germany:
Depopulation and Ageing in Europe and Japan
Less people working means there less people to tax. The worker-retiree ratio is going to tip further and further in the direction of the retirees. This means less income for the government, while pensions sore. For example Japan currently spends about 8% of GDP on public pensions. By 2020 it will have to spend about 15%. The numbers are similar for various European countries.
Regarding labour shortages, as the labour pool shrinks,
Depopulation and Ageing in Europe and Japan
Less people working means there less people to tax. The worker-retiree ratio is going to tip further and further in the direction of the retirees. This means less income for the government, while pensions sore. For example Japan currently spends about 8% of GDP on public pensions. By 2020 it will have to spend about 15%. The numbers are similar for various European countries.
Regarding labour shortages, as the labour pool shrinks,
Japan, Russia, and Germany are certainly among the worst off currently, but most of Europe is all ready below the 'replacement' fertility rate (2.1) for population growth, and trending downwards.
For comparison - Japan is at 1.21, Russia 1.41 - with the United Kingdom at 1.66, Spain 1.31, Netherlands 1.66.
France is looking better with 1.98, but that could be in part from a lot of the immigration they have been experiencing.
It's going to be interesting to see what happens with all of the social programs becoming too top heavy with the workforce aging so quickly.
The average age in the United Kingdom in 2008 was 39 years old - and it is rising each year.
Something I read once- Japan might be in the position to solve it's population problem with technology advancements - like cloning, and robotics. Makes me think of the Japan in the Ghost in the Shell series.
well, i suppose cloning would solve part of the problem, not we'll be seeing cloned humans for a while yet.
robots on the other hand don't pay taxes, buy housing, spend their income, have entepreneural ideas. they would just help with labor shortages.
sure it was't South Korea you were reading about? they've been going hard preparing for the population drop, working on their robots. They even have 'robots rights' laws:
S Korea devises 'robot ethics charter' - Telegraph
and shit, they're already rolling out robot preschool teachers two years from now:
South Korea: Robot Teachers Rolling Out in 2012
and robots actors:
Robot to take starring roles in S.Korea plays
"Robot Princess and Seven Dwarfs" lol
edit WTF:
http://www.geekologie.com/2009/09/huuuge_robot_statue_coming_to.php
"South Korea is erecting a massive 364-foot statue (twice as large as the Statue of Liberty) of Robot Taekwon V (aka Voltar the Invincible)."
robots on the other hand don't pay taxes, buy housing, spend their income, have entepreneural ideas. they would just help with labor shortages.
sure it was't South Korea you were reading about? they've been going hard preparing for the population drop, working on their robots. They even have 'robots rights' laws:
S Korea devises 'robot ethics charter' - Telegraph
and shit, they're already rolling out robot preschool teachers two years from now:
South Korea: Robot Teachers Rolling Out in 2012
and robots actors:
Robot to take starring roles in S.Korea plays
"Robot Princess and Seven Dwarfs" lol
edit WTF:
http://www.geekologie.com/2009/09/huuuge_robot_statue_coming_to.php
"South Korea is erecting a massive 364-foot statue (twice as large as the Statue of Liberty) of Robot Taekwon V (aka Voltar the Invincible)."
The ageing population problem is only temporary. If you think about it low birth rates only lead to a temporarily old population. When fertility is higher than usual we temporarily get a younger population, and when its low we temporarily get an old population. As soon as fertility rates stabilise this won't be a problem. Better diets and health providers however do cause a permanent ageing problem, but this is simple to solve by increasing the pension age.
Maybe awhile for cloned humans - and there's a whole mess of ethics that will have to be worked out for it I'm sure. However, I could see it being used for 'parts' replacement- to get more out of the workforce itself. As you age, clone your organs - if it fails or has problems, replace it with an exact match of your own - extending your life expectancy and years of productivity.
The kind of tech used to create working robots could also be applied in the same way - advanced robotics research leads to artificial eyes, limbs, hearing. I know it's a ways off and in the realm of complete science fiction, but think about entire artificial bodies, with human brains. You don't need to worry about replacement fertility rates and an aging workforce as much with tech that lets you make a new body when your natural one shows wear and tear.
It might have been. I didn't realize how accomplished South Korea was with their robots - that's cool.
So was the Great Depression, so what. All political and economic problems are temporary. Its still at a minimum 2-3 generation long 'problem'.
Going beyond that, so much could happen by then its foolish to even try and predict what the big problems with be then.
Only if the low birth rates rise again. But in most countries they haven't even stopped falling. The 'old population' problem is only alleviated when births per woman rise to 2.1 or above (and there is no certain reason to believe that would ever even happen again in some Western countries). Then you have to wait another generation for the children to even start entering the workforce.
Koala above said Japan is down to 1.2. Lets say it stabilizes at 1.2 for a while - for as many years as it remains there the population will continue to shrink, percentage of population in retirement age will remain high and the aging problem will continue.
The forces causing declining birthrates, like urbanization, aren't exactly going away either.
As I said, only if they stabilise at a birth rate of 2.1 or above. Europe could easily half its population before that even happens, if it does.
You mean increasing the retirement age. That can help, but only partially.
Anyway, the video was not about population aging.
If a population decreases, and the bulk of the economy is predicated on consumer spending, that means there will be less people buying what is produced, which means lower manufacturing output which means fewer employees needed, which makes the whole 'labor shortage' argument just a tad moot.
Thought I already answered that and again, this is not what the video is about (the point was that an economic model only makes sense as one part of the complete geopolitical model), but you're not getting it.
The population is not decreasing evenly. With a below replacement rate birth rate each year a smaller number of people enters the workforce. Each year the number of people retiring (not dying) is greater then entering the labor pool. Retired people are still consumers (who are living longer and longer)!
Alternatively, what you're describing is a deflationary spiral - hello Great Depression!
The uneven is also geographic however - its a global economy, but population declines are currently going to be concentrated in several regions, gradually spreading to others. Some of the biggest exporters - Japan, Germany China, are also the biggest exporters. In the case of China one of their biggest problems is precisely the lack of a domestic market, and thus dependence on markets in other countries.
A friend of mine is living in Japan right now. He tells me that there's a trend among married couples to buy homes/condos with 2 master bedrooms..so they can sleep apart. They don't have sex and have no desire to. No desire for kids either.
meh at the mistakes in my last post.. the biggest exporters are also the biggest exporters! whatever
Anyway, begs the question why those Japs are getting married at all. companionship? convenience? social norms?
Watching Japan crumble is going to be very instructional.
Anyway, begs the question why those Japs are getting married at all. companionship? convenience? social norms?
Watching Japan crumble is going to be very instructional.
Painful to watch for a few reasons.
1. His projections are based on what he knows now, not what he will know in 40 years. The "Black Swan" problem.
2. He completely misunderstands economics and capital theory. Economics is a factor in geopolitics, but geopolitics cannot exist with the economic. In fact, all modern existence is predicated on the economic. Next, he talks about land, labor and capital. This is also an error in his understanding of capital, and capital shortages.
3. On labor and unemployment, he seems to be missing the picture on what actually causes unemployment. Prior to the 20th century, the notion of unemployment wasn't even a social issue. There was work for everyone, including children.
4. While his basic accounting math is correct about having a greater net worth than liabilities, that first, doesn't pass the acid test, and second, because it doesn't pass the acid test, means that debts cannot be paid as they come due.
An example is, bank assets right now. They are being bought in private auction at pennies on the dollar. Assets which have tremendous value. They are being sold to liquidate into a cash position to meet current obligations. The banks would rather not sell them. The reason they are going so cheap, is that there are few buyers, and even fewer buyers with the significant liquidity to pay more than a fraction of the value of these assets.
So while the US may have a net worth of $339 trillion (I'm sketchy on this, but I will come back to it later), at $0.10 on the dollar, it's not enough to meet unfunded liabilities in medicare and social security.
So if the US completely liquidated the entire value of the country, it might still not be able to pay its debts to its now non-existent self.
Next, he tosses out $339 trillion. Does that include worthless derivatives? Is that based on asset valuations and in what year? everything was worth more nominally (and in real terms) in 2007 than it is in 2010 including the stock market and real estate.
Does it include only government holdings, or all of the private holdings of citizens as well?
If the latter, would he then claim that the citizens could liquidate their assets, so that they could continue to get entitlement checks? Isn't that like selling the cow so you have money to buy milk?
Lastly, who will buy the US' assets comprising this net worth? There is no one to buy these assets. Like the vultures picking over the bones of the banks, people will only buy the most worthwhile assets, and only for pennies on the dollar. The global economy is simply not big enough to buy the US. So the $339 trillion might as well be $300 million trillion of the purpose of valuation.
He's got the basic accounting principles right, but a complete lack of business sense and economics.
Lastly, employment is not what makes countries wealthy. The Chinese have millions of employees working their asses off. They aren't as wealthy as everyone else. They however are wealthier today than they were 20 years ago, because they now are able to accumulate private savings.
Savings = capital for investment (seed money to hire employees, to buy land, to discover markets through research, to build automation).
I watched the whole thing to see if he would address capitalism at any level, and he basically employed the same failed public school conception of economics. If you want to believe what he is saying, it sounds really good. If you are even remotely a cynic and understand business/economics, you know his vision of the future is very flawed.
Doesn't mean his predictions won't be right (Black Swan again) but if they are, they won't be for the reasons he outlined.
We know that working more doesn't make you wealthy. Being more productive makes you wealthy. It is why the backhoe driver makes more than the ditch digger with a shovel. He can get more done with less mud on his boots. The only way to increase productivity is capital. And running persistent deficits (along with 0% interest rate stimulus) consumes any capital that could be invested in production.
1. His projections are based on what he knows now, not what he will know in 40 years. The "Black Swan" problem.
2. He completely misunderstands economics and capital theory. Economics is a factor in geopolitics, but geopolitics cannot exist with the economic. In fact, all modern existence is predicated on the economic. Next, he talks about land, labor and capital. This is also an error in his understanding of capital, and capital shortages.
3. On labor and unemployment, he seems to be missing the picture on what actually causes unemployment. Prior to the 20th century, the notion of unemployment wasn't even a social issue. There was work for everyone, including children.
4. While his basic accounting math is correct about having a greater net worth than liabilities, that first, doesn't pass the acid test, and second, because it doesn't pass the acid test, means that debts cannot be paid as they come due.
An example is, bank assets right now. They are being bought in private auction at pennies on the dollar. Assets which have tremendous value. They are being sold to liquidate into a cash position to meet current obligations. The banks would rather not sell them. The reason they are going so cheap, is that there are few buyers, and even fewer buyers with the significant liquidity to pay more than a fraction of the value of these assets.
So while the US may have a net worth of $339 trillion (I'm sketchy on this, but I will come back to it later), at $0.10 on the dollar, it's not enough to meet unfunded liabilities in medicare and social security.
So if the US completely liquidated the entire value of the country, it might still not be able to pay its debts to its now non-existent self.
Next, he tosses out $339 trillion. Does that include worthless derivatives? Is that based on asset valuations and in what year? everything was worth more nominally (and in real terms) in 2007 than it is in 2010 including the stock market and real estate.
Does it include only government holdings, or all of the private holdings of citizens as well?
If the latter, would he then claim that the citizens could liquidate their assets, so that they could continue to get entitlement checks? Isn't that like selling the cow so you have money to buy milk?
Lastly, who will buy the US' assets comprising this net worth? There is no one to buy these assets. Like the vultures picking over the bones of the banks, people will only buy the most worthwhile assets, and only for pennies on the dollar. The global economy is simply not big enough to buy the US. So the $339 trillion might as well be $300 million trillion of the purpose of valuation.
He's got the basic accounting principles right, but a complete lack of business sense and economics.
Lastly, employment is not what makes countries wealthy. The Chinese have millions of employees working their asses off. They aren't as wealthy as everyone else. They however are wealthier today than they were 20 years ago, because they now are able to accumulate private savings.
Savings = capital for investment (seed money to hire employees, to buy land, to discover markets through research, to build automation).
I watched the whole thing to see if he would address capitalism at any level, and he basically employed the same failed public school conception of economics. If you want to believe what he is saying, it sounds really good. If you are even remotely a cynic and understand business/economics, you know his vision of the future is very flawed.
Doesn't mean his predictions won't be right (Black Swan again) but if they are, they won't be for the reasons he outlined.
We know that working more doesn't make you wealthy. Being more productive makes you wealthy. It is why the backhoe driver makes more than the ditch digger with a shovel. He can get more done with less mud on his boots. The only way to increase productivity is capital. And running persistent deficits (along with 0% interest rate stimulus) consumes any capital that could be invested in production.
Those country don't know the way to survive in the gene pool. Get rich bang bitch.
Maybe they need more relaxed sexual norms? I've heard prostitution is taxed in German. That's a discrimination against those that prefer paying for sex rather than marrying.
And forget marriage. The richer a man, the more he doesn't want to get married because that means risking all his wealth. Kicking themselves out of the gene pool. How pathetic.
Maybe they need more relaxed sexual norms? I've heard prostitution is taxed in German. That's a discrimination against those that prefer paying for sex rather than marrying.
And forget marriage. The richer a man, the more he doesn't want to get married because that means risking all his wealth. Kicking themselves out of the gene pool. How pathetic.
You got great points.
But I just wanted to say. Most females were stay at home moms during this time. I'm pretty sure the work force consisted of largely males. There's actually more jobs now.
The guys does make a great point with the fact Americas immigrant policy has been a large ecominic factor.
Unemployment is a social myth created by government intervention in the economy. Prior to minimum wage, unemployment benefits, retraining programs, hiring standards etc, anyone could find work if he wanted to.
Why?
Because like we see here at WF, if you can negotiate any terms, and any price, you will find a job, even if you are super incompetent. Someone will hire you to click competitor links or copy/paste. I could hire dozens of workers at $1 an hour, I just don't have the time to manage them all. But there is certainly enough work for them.
In older times, there was always a field to work, a fence to mend, a cow to milk. People with wealth would always be willing to arbitrage cheaper labor (as many of us here do) in order to have more leisure time, family time, whatever. The same holds true today. We always have something else we could be doing if we could get someone to do our work for less than it costs us in time and money to do it for ourselves.
When there aren't jobs in the modern economy, it means that it is too expensive for firms to hire people and too few new firms adding staff.
The former is because labor rates are not being allowed to fall. Minimum wage, employment standards artificially create higher wages. And which small businesses can compete with unemployment benefits (money for nothing, paying workers not to work)?
The latter is because there is a shortage of capital, too much regulation and taxation is a disincentive to start new firms, and invest in hiring and training new workers.
If you removed all of that, it would be like our BST forum. Even the worst supplier would find takers at a low price and a simple task. That doesn't guarantee jobs for the incompetent, but then what economy would pay completely incompetent people a living wage besides communism (or government)?
So then the next thing is, someone would complain, "well they can't get a living wage".
Wages are naturally bid up to a living level, or the entire workforce would die and the wealthy would suffer a lower standard of living due to less productivity. We all know, a happy worker is a productive worker. That is why capitalism replaced obvious slavery.
Prior to the Depression, there was no concept of a living wage or social safety net. And yet many people of no means became wealthy, sent their kids to school, moms stayed home, and aggregate prosperity was increasing rapidly.
The Depression didn't happen because there were no jobs, it happened because Hoover and Roosevelt imposed tariffs at the same time that they tried to keep wages high when asset prices (and the price of labor) was falling. Roosevelt's administration actually went so far as to plow crops under when people were in soup lines, in order to keep the price of food high.
They ignorantly believed that high prices were the key to economic growth.
The problem with high prices, as we all know from a basic supply demand curve, is that the higher the price, the lower the demand. The fastest way to diminish economic activity, is to price yourself out of the market, or have the government force that pricing on you.
[ame="http://www.youtube.com/watch?v=7DS0XXFdyfI"]YouTube - Good Intentions 2of3 Minimum Wage, Licensing, and Labor Laws with Walter Williams[/ame]
[ame=http://www.amazon.com/Black-Passenger-Yellow-Cabs-ebook/dp/B001F0RKXE]Amazon.com: Black Passenger Yellow Cabs: Of Exile and Excess in Japan eBook: Stefhen f.d. Bryan, Suzette Burton, Shuji Goshomura, Sean Colquhoun: Kindle Store[/ame] (no aff link)
"BLACK PASSENGER, YELLOW CABS, an erotic ethnographic memoir, explores in easy lay person’s terms the socio-psychosexual dynamics of Japan and the erotic capital of the Western male. Such are the social dynamics which allows sheer effortless and infinite availability of sex, for black and white men. A phenomenon I was only too eager to explore."
the author was on Howard Stern last year i think, you just sparked my memory, i never read it but now i might