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Tingkai
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To find the Northwest Passage
Aug 2001
time: 13:24
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GDP measures output, not productivity or efficiency.
Hong Kong and Canada have similar GDP per capita, but most Hong Kong people work more than 50 hours a week compared to the average of about 40 hours in Canada.
So Canadians are more efficient than Hong Kongers in general terms, even though the GDPs are similar.
quote:
Originally posted by Oerdin
Wrong again. They use GDP as one indicator among hundreds because it is a hard number which can be compared and calculated completely objectively without any individual economist injecting bias into the results.
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Yes and no.
Most economists acknowledge that the GDP is not a true picture of an economy. The statistics used to calculate it may be based on questionable information. The choice of what to count as economic activity is subjective. The numbers that get reported are sometimes the figment of a politician's imagination (see China).
The commonly used PPP is based on a subjective selection of prices. And comparisons between countries can be distorted by exchange rates that affect the people of a country to varying degrees (some countries a lot, other countries very little).
Conversely, the HDI is based on "hard" facts: # of doctors, # of university graduates, average age at death, # of births, etc.
To suggest that the HDI is pulled out of thin air is simply wrong.
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Sikander
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Boulder, Colorado, United Snakes of America
Jan 2000
time: 22:24
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quote:
Originally posted by chegitz guevara
This isn't actually true. Savings still require an input of living labor to be realized. Without new workers, savings evaporate in a vacuumme of inflation, stock prices fall, etc. As well, with more people invovled in caring for the elderly, less people are involved in productive labor, which further narrows the amount of input into the system, public or private. Unless productivity increases massively, you still have the same problem. |
Which I alluded to when I said unless we had a really bizarre ratio of productive / unproductive. The labor will come from other sectors of the economy or it will be imported if necessary. Capital markets as well aren't stuck simply investing in one currency / one country anymore. Even if people managed to live as long after they retired as the worked before they retired and we ended up in a 1 to 1 ratio of workers to non-workers we could get by. It simply doesn't take one full time worker to do all the little things that a retiree needs done for them, even in a nursing home environment.
Such a situation is of course unlikely, and in any even unsustainable for practicle reasons. With such an elderly population the population of the country will be dropping unless of course immigration is stepped up. As the oldies die off their nesteggs become available to improve the situations of their heirs, and / or to be invested. At the end of the era the population will be smaller and wealthier than before.
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Sikander
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Boulder, Colorado, United Snakes of America
Jan 2000
time: 22:24
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quote:
Originally posted by Tingkai
You're making a lot of questionable assumptions. You assume that people can save assets for their retirement while they are working and that thiese assets will not suddenly disappear.
Yet, economic history shows this is unlikely. Before social security, people struggled to make ends meet. Many people never had a chance to save money. |
And yet many people, myself included manage to not only pay our inflated social security taxes, but also save for retirement. I make only about 45k a year, but save 20% of that (pretax), and pay my SS, Medicare, property, income, sales and excise taxes out of the remainder. And I live in one of the more expensive spots in the U.S.
quote:
Originally posted by Tingkai
Edit: and what Japher said.
In today's world, people's retirement savings have been savaged by stock crashes, or in the recent past, by massive inflation.
As for demand for eldery care workers, just because there are many old people does not mean people will enter the field. If the elderly have limited savings then they can't pay high wages so the supply of workers may remain low despite the high demand. |
These days people are not limited to investing their money in their own currency. When inflation rears up locally they will invest overseas to protect themselves, which will reduce inflationary pressures. As places with populations that are falling (the situation we are talking about) face downward pressures on their economies, it makes sense that some of that capital is going to go to places where economies are growing faster.
A politically acceptable system will probably consist of:
1) A welfare component whereby people who for whatever reason have failed to retain enough capital to care for themselves will be cared for at state expense adequately.
2) A pre-tax managed savings program where people will contribute to their own retirement account. This should probably be managed in many smallish chunks by professionals (to spread and minimize risk), and should be regulated closely in order to prevent abuse, theft and incompetence without being so completely controlled by politicos that the programs can be co-opted for short term political gain. Think along the lines of the federal reserve system.
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Tingkai
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To find the Northwest Passage
Aug 2001
time: 13:24
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quote:
Originally posted by Sikander
And yet many people, myself included manage to not only pay our inflated social security taxes, but also save for retirement. I make only about 45k a year, but save 20% of that (pretax), and pay my SS, Medicare, property, income, sales and excise taxes out of the remainder. And I live in one of the more expensive spots in the U.S.
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Your annual savings (20% of pre-tax income) = $9,000
You spend and pay in taxes $36,000 a year.
The average salary in the US is something like $36,000.
So someone earning the average income, and living your lifestyle cannot save any money.
Now, that's just average income earners. All of those people earning below average incomes, we could be talking 50 - 100 million people, are getting by with far less than you, and probably not saving any money.
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Tingkai
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To find the Northwest Passage
Aug 2001
time: 13:24
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quote:
Originally posted by Sikander
These days people are not limited to investing their money in their own currency. When inflation rears up locally they will invest overseas to protect themselves, which will reduce inflationary pressures.
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If inflation increases, people move money overseas, but that pushes down the value of the local currencies. If the economy is highly reliant on imports, inflation could increase.
Also, increased outflows of money, in and of itself, do not necessarily put downward pressure on inflation.
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Sikander
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Boulder, Colorado, United Snakes of America
Jan 2000
time: 22:24
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quote:
Originally posted by Tingkai
Your annual savings (20% of pre-tax income) = $9,000
You spend and pay in taxes $36,000 a year.
The average salary in the US is something like $36,000.
So someone earning the average income, and living your lifestyle cannot save any money.
Now, that's just average income earners. All of those people earning below average incomes, we could be talking 50 - 100 million people, are getting by with far less than you, and probably not saving any money. |
I live in an area that has about the same cost of living as Manhattan. I'm not sure what the average income is in Boulder, but I'm sure that it's a good deal more than what I make. My property taxes alone are $2,500. Which is a fancy way of saying that I could live as well on $36,000 in most of the rest of the country as I do on $45,000 here.
Now imagine if we were able to reduce the regressive SS taxes on the working poor. These taxes constitute a much higher percentage of the poor working man's paycheck than they do for the wealthy man's check. In my case the cost for these taxes is approx. $3,400, which alone accounts for almost 10% of the money that I don't save for retirement each year.
Most people should be able to retire comfortably enough to require no additional input from the rest of society. After all, my savings rate of 20% is a pretty high mark to set. I'll easily be worth more than $1,000,000 (in todays dollars assuming an average inflation rate of 3%) when I retire.
Some people aren't going to be able to put away enough to retire, of course. This is why there would have to be a welfare provision, perhaps amounting to 10% or so of the current SS tax. This would be a general fund expenditure (in my scheme at least) which would fall more heavily on those who make more money just as the income tax does, and would be adjusted as necessary to take into account the current conditions.
The hardest part of the implementation will be to build a bridge between the two systems. The fact that I am personally doing so easily while only barely making more than average should be a sign that it is doable. If I never receive a penny from SS I'll still be fine. The advantage will be that the government and the economy won't have to undergo constant {challenges to find money / temptations to waste money} as the demographics change over time.
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10-09-2004 09:44
And saying that economic growth is the measure of everything good is not subjective? 
Yes, rephrase the question that way! Why I state "the question is whether HDI or economic growth measure better what economic growth aims to measure"! 
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