In general, as a population skews older, consumption falls faster than production. So yeah. But there *can* be ( I could have worded that better ) a demographic effect that can negatively impact production as well. As you note, it's way much less likely than factors that reduce consumption.
I was mainly thinking of France in the interwar period:
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A lot of their monetary problems ( France had at least one hyperinflation ) was due to production simply being inadequate. WWI caused a massive loss of mostly young men. This is in no way the whole story, but it's always stuck out to me. Exports of stuff like steel went in half then. The value of the franc also divided by two. That might be a coincidence, but I doubt it.
There's some argument as to whether or not this is the case in Japan, but it's not clear.
What I meant (I wasn't any clearer than were you) was that population decline follows *prosperity*, not economic decline.
Wars have odd effects that I don't think relate vary well to what we're seeing now. The US grew out of the Depression, not because FDR's policies finally worked but because the war demanded production; slave labor, as it were. Perhaps there is a parallel to Obama's economics here...
Absolutely - we see that in Mexico, for example. But post-Boomer demographics in the US show that a recession might also depress birth rates. Taken far enough, it *might* reduce productive capacity, but only when things get more extreme. I don't think the effect of a scant-er workforce on say, outsourcing or automation is clearly understood. That's a real mess to unravel, though. Of the GenX people I've known who did the best, they were generally in very nearly trades, or trades-plus-automation.
These topics sort of expand - it's hard to constrain them, and it's easy for people to get confused. I'm probably confused anyway.
That could be. I think there's a lot of error about the interwar period, and that a lot of those errors cause us grief. I suppose what I was mainly thinking about the interwar period in France is that a lot of people think of the hyperinflation without factoring in all the political instability that went with it.
Dunno; I've got "Nation of Deadbeats" in the book queue, and I think it's going to be an important book. It mainly says that people think they can make more and more complex financial instruments and beat the boom/bust cycle, and they're shown to be wrong. When they are wrong, sometimes regimes fail, and there is a lot of war.
So then people confuse that with "free markets" and... there's nothing "free market" about tranches of CDOs. If it was your money, you simply would not do that. If you did, then you'd eventually stand as a warning to others. In *every case* where we get these boom/bust cycles, it's somebody behaving like John Law in the Mississippi Bubble.
Used to be you could depend on people at least having heard of "A Monetary History" by Milton Friedman but lately, he gets lumped in with Greenspan's "oops".
At any rate, I think it starts with Irving Fisher. And I think we're in an unnecessarily constrained period. Maybe you guys are right, and we're not.
The US grew out of the Depression, not because
Yep!
The real problem is that a lot of the legdermain about FDR is still held in high regard, when a lot of it is just flat false.
If you want wine, or a bread loaf that rises, you have to give the yeast enough sugar.
If you want roads, police, education and defense you have to give the government enough money. History is full of countries that imploded when the right-wing nitwits didn't.
The government is just the biggest protection racket in town.With care, you can make it serve useful functions. Starving it concentrates it's attention on it's own survival.
It was different then, but neither James Arthur nor krw noticed.
I spend about $1k on food a year. Maybe $1k5 these days--food's cheaper in Califarmya. My biggest cost by far is gov't at roughly $2k for the local stuff, including prop. tax, fees, and services.
I use about $20 worth of electricity and less than the minimum billable amounts of water and natural gas per month.
Here you can easily buy a fine, decent house for $300/month (or a castle for more, if you'd rather). I just cruised the real estate website and found several for > I've lived most of my life on a fraction of that, and saved the rest.
There are two answers to that. First, that's only $14k if you only work 40 hours a week, which I never have in my life. If you get
person in that position shouldn't work 60 hours a week, even if that means two jobs. 60hrs ups that to $21k/yr.
I moved from Europe on my own when I was 17, and started work at two full time jobs--one for min. wage, one $.25 more. I easily lived off part of one job's pay, and saved the rest.
The other answer is that even if you slack and make $14k a year, that's still more than enough for mortgage, food, taxes, and everything else. It is. I've done it. Forever. And I still manage to ski, buy stuff, and have all kinds of fun. And save the rest.
Paul's right. People buy altogether too much they've got absolutely no need of. Which is fine, as long as they're spending their own money--that's freedom--but it's a choice, and not my choice.
I like real sourdough bread. It costs about $0.30 a loaf, homemade, whole-grain, and it's better. I could naturally spend that time earning more money so I could pay more in "fair share", but, like Barack said, at some point you've made enough.
Today, it's curried lentils and cranberries. Life is good.
Another factor is that Congress got d@mn tired of FDR's stimulus fantasies and started fighting back, even before the war. Then when the war came, Frank dumped his old economic team and hired on a bunch of industrialists for the war effort, guys who knew how to get real stuff made and done.
It's a counter-point to stimulus-ists though, who denounce military spending as economic cost, yet point to it lovingly economically when deployed by Frank. (They're right in the first case, wrong in the second.)
FDR's policies are what ended the Great Depression,. The US GDP curves and unemployment curves turn around in 1933, and rise steadily to
1937.
There are some right-wing myth makers who like to argue otherwise, but it's rubbish, as evidenced by the fact that James Arthur treats it as gospel.
Whence the kink in the recovery in 1937, which allowed FDR to reinstate hos fantasies.
It's a different kind of job from building a self-sustaining economy.
It's one more way of encouraging economic activity for the sake of encouraging economic activity. You don't see the point, but there's a lot you don't see.
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