[Kooler] Is the US already bankrupt?
alcocer at helixdigital.com
Tue Dec 31 11:51:07 PST 2002
On Tue, Dec 31, 2002 at 01:33:21PM -0600, Gabriel Sechan wrote:
> From: Dario Alcocer <alcocer at helixdigital.com>
> >This is IMO the crux of the matter. Here's my guess for what's
> >happening to the economy:
> >* Increasing information technology and exporting job to developing
> > countries allows for more efficient production, i.e. the amount
> > of domestic labor required per unit produced is less.
> >* Redundant workers are "down-sized", since they're jobs have been
> > eliminated.
> Ok, so we now have a lot of out of work people. Thats bad. However, after
> a short while, increased profits come into the buisness that fired them.
> They grow, or invest, or spend, creating new demand. To fill this demand,
> new jobs are created. In the end, we get them all jobs.
I think there are other possibilities too:
* the new jobs they get aren't paying as well as the ones
they used to have, thereby reducing their consumption.
* you're assuming that the increased profits are reinvested here.
what if the profits are instead invested elsewhere, or the profits
go into conspicuous consumption that doesn't create new jobs here?
> As for "extra" population- they'll find things to do.
That's what I'm *afraid* of; what if they instead decide to resort
to illegal activities to make up for their income loss?
> The economy rarely
> leaves spare resources around, they'll find jobs eventually. Probably in
> other sectors, but they will be found.
I'm not willing to accept this on faith. In fact, I'd say a long-term
labor surplus has been created in many developing countries, witness
the huge numbers of unemployed in the large cities like Mexico
City, Sao Paulo, etc. I think that long-term we may be creating
a similar situation here; I hope not, though.
 - there has been a huge growth in meth labs in the past few
 - organized crime in Mexico City has taken advantage of this
by enlisting some of the people to work in the kidnapping "business",
a growing problem there.
Dario Alcocer -- Sr. Software Developer, Helix Digital Inc.
alcocer at helixdigital.com -- http://www.helixdigital.com
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