Uncertainty, deflation and interest rates question

[Polish_Silver]

Old age and Automation

If one worker with current technology can do the work of 10 previous workers, what does a low birth rate have to do with supporting retiring people?

Every developed nation is facing a demographic crisis. The only question is whether immigration helps. In my view (and Kotlikoff's) it does not because most of the immigrants are low income/low tax payers.

I don't think automation solves the problem either. For one thing, automation is mostly suited to assembly line situations, where very few people are working anyway. I don't think nurses will be automated and that's what old populations need.

Even if many professions become automated, how does that create an income stream to support retirees? All the companies will automate simultaneously, so it will not be a long term competitive advantage or big profit situation for them.

You could argue that the people freed up from automation will be able to do the elder care, and to some extent that may happen. But where the money comes from is still not settled.

A lot of the robot talk is overblown. "Machine vision" has been around for decades in some form. Computers cannot think, and cannot make goal directed decisions.
I believe they will never be able to.

A good book on this, written decades ago is "what computers can't do" by dreyfuss. I don't think any of his arguments have failed in the years since 1980.


Wiki:

In Alchemy and AI (1965) and What Computers Can't Do (1972), Dreyfus summarized the history of artificial intelligence and ridiculed the unbridled optimism that permeated the field. For example, Herbert A. Simon, following the success of his program General Problem Solver (1957), predicted that by 1967:^[6]

1. A computer would be world champion in chess.
2. A computer would discover and prove an important new mathematical theorem.
3. Most theories in psychology will take the form of computer programs.

The press reported these predictions in glowing reports of the imminent arrival of machine intelligence.

prediction 1:

off by 30 years, and consider this:

Wiki:

Deep Blue was a chess-playing computer developed by IBM. On May 11, 1997, the machine, with human intervention between games, won the second six-game match against world champion Garry Kasparov, two to one, with three draws.^[1] Kasparov accused IBM of cheating and demanded a rematch. IBM refused and retired Deep Blue.^[2] Kasparov had beaten a previous version of Deep Blue in 1996

.


prediction 2:

Computers were used as calculators in proving the 4 color map theorem, but that's hardly "discovering a new theorem"

Prediction 3):

Totally laughable.

[GRG55]

Re: Welfare states and immigration

If one worker with current technology can do the work of 10 previous workers, what does a low birth rate have to do with supporting retiring people?

Are you paying the taxes of ten workers?

[aaron]

Re: Welfare states and immigration

Are you paying the taxes of ten workers?

If I were getting paid ten times as much, I suppose I would.

It is more of a theoretical, 'real economy' sort of question. The U.S. has the resources (technological, human, and natural resources) to take care of everybody. But, the economy does not adequately serve that need. This reality does not have to be permanent.

[metalman]

Re: Welfare states and immigration

If I were getting paid ten times as much, I suppose I would.

It is more of a theoretical, 'real economy' sort of question. The U.S. has the resources (technological, human, and natural resources) to take care of everybody. But, the economy does not adequately serve that need. This reality does not have to be permanent.

the 'resources" you refer to result from competition. not everyone wins & the competition isn't fair. but eliminate the competition & the 'resources' vanish.

[Polish_Silver]

Everyone's turn to depreciate

The anti-deflation policy tool that cannot be explicitly discussed in policy circles is The Foolproof Way of currency depreciation. . . Can every economy depreciate at once?

They cannot. Instead only one country will depreciate -- the U.S. again -- . ..

Because if the U.S. goes down it's game over for the IMS.

It depends on your definition of "depreciate". If you mean, change for Forex ratio to help exports, then one it is a zero sum game, and temporary, since price levels will readjust to the new exchange rate.

On the other hand, if "depreciate" means raise the general price and wage level against existing debt, than all currencies can do it simultaneously, since all CB's have printing presses.

Roosevelt abrogated "pay in gold" contracts precisely because gold could not be depreciated. Then they wondered why the gold outflows did not cease! Like nobody could figure out what was coming!

[vt]

Re: Uncertainty, deflation and interest rates question

Japan GDP falls 1.6%

http://www.bloomberg.com/news/2014-1...ales-data.html

[aaron]

Re: Welfare states and immigration

the 'resources" you refer to result from competition. not everyone wins & the competition isn't fair. but eliminate the competition & the 'resources' vanish.

I guess you are jumping ahead to some *ism.

Metalman, would sound(er) money perhaps give us a far more efficient system than the current one?

Would cutting FIRE down to a 1/4th is current size free up the resources to support retirees?

How about cheaper energy because of policy changes? Does that free up extra wealth?

How about giving amnesty for illegal immigrants who suddenly have to start paying taxes (yes, still a net drain, but billions smaller)?

How about a military that is twice as efficient and half the size? We seem to be going that direction, no?

I also think you might agree that government could be smaller and have less regulations. While I do not think it is possible to shrink government, I think as a percentage of outlays, government personnel costs will continue to drop. EJ talked about this a bit.

Efficiency & technology keep us going towards a small number of workers doing most of the work (food, shelter, energy delivery, entertainment). I expected that to stop a few years ago. It has not.

They printed many trillions of dollars and even EJ thinks it will not end the world. What is a few more million citizens on food stamps/prison/welfare/disability/retirees ?

As you say, competition is not fair. We get fewer, more efficient workers and more jobless. Yet, the country has thrived by several measures (more of pretty much everything) and few are starving. I think the population increase has been about 12 million since the AFC. How is that for power?