Rantings and tirades of a frustrated economist.
Does this fall into the category of "if you owe the bank a thousand dollars you've got a problem, if you owe them a million dollars they've got a problem."
It's about to once the Baby Boomers start to retire and start sucking up a good 30% of GDP to take care of them.
Shades of Logan's Run...
In Europe they tend to work a lot less than we do in North America. They retire sooner as well.European workers (boomer gen) are about to start claiming their "unfunded" gold plated pensions right about now and over the next ten years.It will be interested to see how they react to the disappointment of the failure of their governments and employers to lead them all to the promise of never-ending bliss on the Spanish Riviera in winter and a life of leisure at home in summer.In their wake are the hoards of Muslim immigrants with an even worse work ethic.
While the extremity of america is obvious, shouldn't most western countries show similar graphs? It seems to me that with globalization causing huge growth in foreign trade, foreign debt would naturally grow as well.
Ok, Capt,did the whole supper club thing this weekend and found this online at your favorite magazine:http://www.economist.com/science/displaystory.cfm?story_id=8516366Begs the question of "are people really intelligent enough to know what they need?" and how the fundamental principles of supply and demand can be artificially maniuplated to elicit the "buy" response from people.it's cool.
The study they mention in the article really doesn't say anything at all. One part of the brain is more active when evaluating a reward, another part is more active when evaluating a cost, and a third part becomes more active when people start comparing the two. So what? The author lays down that simple framework and then makes a blind leap to say that maybe credit cards are somehow different, although they didn't study that. It's a pure guess.People are more likely to buy things when they have access to credit because they have time preferences. People prefer to have benefits today rather than tomorrow, and would usually rather pay costs tomorrow rather than today. There's nothing weird about that, and it's not inherently irrational either.I'm always wary of people who go about claiming that other people make systematic mistakes and do not learn from them, because it's almost always a running start at suggesting that an enlightened individual (usually the speaker or a politician who agrees with them) could do a better job of making their decisions for them.If people don't know what is best for them, then how can those same ignorant people be expected to know which paternalistic ruler should get to make decisions for everyone?
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