Read the rest at New Economic Perspectives
John Carney agrees with me that supporting our elderly is not an “affordability” problem, but he claims that I fail to see the “real” burden—the dependency ratios and all that. Actually I’ve been writing about that since the early 1990s. The “real” burden is the only thing that matters.
MMT FOR AUSTRIANS 3: How Do YOU Propose We Deal with the Elderly, Disabled and their Depts?
By L. Randall Wray
BTW, explain to me why economists focus on workers relative to productivity instead of investment in scaling up technological innovation, which is the actually source of increased productivity. Rising productivity increases output per unit of work, and "work" is increasing equatable with energy rather than either brawn or even brains. This makes more human workers expendable, thereby increasing either unemployment or the opportunity for greater leisure, depending on how gains from productivity increases are distributed.
So iIt seems to me that issue of availability of real resources now and in the future is a function of productive investment, innovation, ability to scale up, and sustainability. Wouldn't this be encouraged by creating incentives for productive investment and discouraging what inhibits productivity, like negative externality, waste, and economic rent. This is an issue that can be addressed through regulation, fiscal policy that targets public investment, and tax policy that encourages positive behavior and discourages negative behavior.
In some Native American tribes of hunter-gathers, where productivity was extremely low in comparison with modern society, the retirement age was about 36. Granted the life span was shorter, but the young hunter-warriors where capable of supporting the rest of society with their level of productivity. We can't do better than them?
4 comments:
"Wouldn't this be encouraged by creating incentives for productive investment and discouraging what inhibits productivity, like negative externality, waste, and economic rent. "
One of which is low wages. Nobody does productive investment if you can get an army of people to do the job for next to nothing.
Making people expensive, coupled with backfilling external sector, drives technical innovation.
The only thing bernanke and geithner are doing is driving a hot poker up the savers arse!!
Tell these Mandarins to take a lesson from 1920-1921 depression, raise interest rates and cut taxes and reward the worker savers and cut loose the squatters who dont pay thier bills, because they are gaming the systems, and I also mean the aholes bankers who never paid their bills for reckless pilfering of the US treasury. Punish the shysters, and claw back the ill gotten gains. The present bunch makes Stalin proud!
FED shenanigans apart, there was no depression in the 1920:
The Depression of 1920–1921: An Austrian Myth
There was no US Recovery in 1921 under Austrian Trade Cycle Theory!
Tom -- Good comment. I think the technological productivity gets ignored precisely because it is not human. Economics is a social science as opposed to a "hard" science, after all. It is the human agent with all of his/her irrationality that ultimately drives the system. That said, I agree with you that a very important issue is being left out. Innovation and technology are critical in order for us to have the real resources we will need without destroying Mother Nature.
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