Jed Rothwell wrote:
R.C.Macaulay wrote:
These is an end of any line. Presently the unfunded mandates accrued
by the US gov't for social and health programs tops 50 trillion
dollars and change...
I think the severity of this problem is exaggerated somewhat, at least
with regard to Social Security. Our wealth is also growing. In the
distant future, when the mandates come due, we may have far more money
than we do at present. If not, mandates can always be recalled or erased
by the Congress.
In the distant past -- the last days of Vietnam, for instance -- in
_very_ rough round numbers, we spent on the order of 5% of the budget on
transfer payments (welfare, whatnot) and we spent on the order of 5% of
the budget on the military.
One could say it represented a balance of sorts. Hysterical claims by
the left and the right that military costs and welfare costs,
respectively, were killing us were apparently exaggerated.
These days the ratios have changed somewhat, and the military is eating
a far larger share, if I'm not mistaken; hysterical claims by the left
that military costs are killing us come a lot closer to being on target.
OTOH as far as I know transfer payments haven't grown all that much.
Rumsfelt stated that deficits no longer matter.
That was a foolish thing to say.
It's a popular view among some economists, IIRC. Ever since Japan was
seen running a deficit of some 5% while apparently outproducing
everybody else on Earth the notion that deficits are somehow irrelevant
has had currency.
What people overlook is that an organization the size of a country can
run a huge deficit for quite a number of years before it finally catches
up with them -- but it will, ultimately, catch up with them, and the
symptom of this is falling value of their currency, either domestically
or internationally.
One way or another, a deficit makes itself known in the form of money
supply growth. A foreign exchange deficit results in money supply
growth relative to other currencies. Any time you have unending
increase of one commodity relative to other (interchangeable)
commodities, the value of the ever-increasing commodity must eventually
drop relative to the scarcer ones. So, ultimately, the value of the US
dollar must drop relative to other currencies; but paying the piper may
be put off for quite a long time depending on other factors.
Running a large enough internal deficit long enough must result in
domestic money supply growth, and eventually, that must result in
inflation. The alternative is to make money very tight, by increasing
the discount rate, increasing bank reserve requirements, and refusing to
monetize the debt; the result of that is to cut down on the "multiplier
effect" and consequently reduce the amount of disposable money in the
economy. That can squeeze out inflation but it also squeezes out
prosperity.
The only reason we don't have horrible runaway inflation already, IMHO,
is that the Fed is an independent entity, run by several large banks and
some representatives who are appointed for long terms (and are not
normally subject to recall). Consequently it's more beholden to the
business world, which hates inflation, than it is to the government,
which, all things being equal, tends to like inflation, as it wipes out
the deficit. If the dollar printing presses were under direct control
of the executive branch, the temptation to inflate our way out of all
debts would be well-nigh irresistible, as has been shown experimentally
by various governments throughout history.
As long as someone will work and produce sufficent food to give away,
the balancing is deferred another day.
If everyone stops working at once bad things happen.
That's clear, I think.
If everyone stops having children, the day the last worker retires will
not be not a good day for the world. But instinct militates against
that ever happening.
This strikes me as an example of projecting present-day problems too far
into the future. At the turn of the 20th century Theodore Roosevelt and
others worried about "the Christmas tree problem;" we were running out
of wild Christmas trees. Apparently it did not occur to them that
Christmas trees can be grown like any other crop. They also worried
about "the Irish maid problem;" i.e., who is going to do domestic work?
They did not anticipate vacuum cleaners and washing machines.
On a more serious note, people today in Atlanta and elsewhere are
convinced that population growth and density are limited by the amount
of water that falls as rain. Even with today's technology that is
absurd. There is no reason why we cannot purify sewage, recycling the
same water again and again indefinitely:
http://www.nytimes.com/2007/11/27/us/27conserve.html
Drinking the water is at against the law at present.
Narrow view, IMHO.
It's against the law in the United States, where 1/20 of the world's
population lives. Is it against the law in India, China, and Africa?
In most of the world cholera is something to worry about, not just
something to read about in social studies texts.
In the United States drinking water is an insignificant problem. In
areas which are short of water the lion's share goes to irrigation, with
some tiny fraction going to drinking water, flush toilets, and other
such uses. To show its concern for the problem, the government
restricts watering of lawns (irrelevant), may even restrict showering
(irrelevant), and continues to subsidize irrigation water so we can grow
cotton in the deserts of California (insane). For a long term solution
to the U.S. water problem, the government is strong-arming Canada to
export fresh water, which Canada currently has a lot of; this is a big
part of what the North American Union whoop-de-doo is really about, I think.
In bidonvilles throughout much of the world drinking water is an acute
problem.
Sorry, I'm babbling -- I just looked over what I wrote and it doesn't
seem especially connected to what anyone else was saying. Time to cut
this off...
You have to let it
percolate through the ground first. But there is no technical reason why
we shouldn't drink it. The water is purer and safer than the natural
product. The law reflects irrational fastidiousness.
Getting back to your assertion of "giving away food": by the standards
of the past, we already do that. Food is essentially free. It costs a
pittance, and it takes only a few percent of the population to produce
it. Nearly everyone used to work on farm. Around 1850 one farmer did
enough labor to 4 people, and now one farmer feeds ~80 people. In the
U.S. the average wage is $17 per hour before tax according to the Bur.
of Labor Statistics. A pound of flour costs $0.16, which is about a
half-minute of labor. In the 18th century it took the average person
about an hour of labor per day to earn that much food, as I recall.
In a century or two, food and other necessities of life will be so cheap
it will not be worth charging people for them. I suppose that food will
cost ten cents a day or so (discounting inflation). It will hardly
matter if a person wants to do labor for that money. We will just give
him the money if he does not feel like working, just as we now give
people a library card for free. It will not be worth collecting or
keeping track of such trivial sums. Robot labor will be thousands of
times cheaper than human labor, including most "intellectual" labor.
Today, one farmer feeds 80 people. In a hundred years, there will be no
farmers at all. Food factory production will be completely automated.
One food factory robot that costs a few hundred dollars (discounting
inflation) will feed a thousand people. People will have to get used to
living like today's idle rich people, devoting most of their lives to
education or hobbies or what-have-you.
We tend to forget how extraordinary computers and other of modern
technology is. Everyone knows that computers operate at 2 GHz these
days; that is, they do roughly 2 billion primitive arithmetic operations
per second. To put that in perspective, one desktop computer can do more
number crunching clerical work, such as adding columns of numbers, than
/every single U.S. office worker combined/ could have done circa 1900.
(In 1900 clerks and other office workers were ~5% of the labor force,
which was 28.4 million people, so that comes to 1.4 million people.)
Once robots are perfected enough to do ordinary household and business
manual labor, I cannot imagine there will be any work for most people to
do. At least, not as we define work today. It would be like to trying
add columns of numbers in competition with a computer. The whole basis
of our present economy is the exchange of labor for goods and services,
but human labor will be worth nothing. Either we will let people starve,
or we will change the basis of our economy. Since we are clever enough
to invent computers and robots, I am confident that we will be clever
enough to invent an economic system that allows us to benefit from them.
- Jed
