In any case I am also working on that book, which is 14 chapters out of 22 done. Many thanks to Bucktown for his help.
Regardless, I am sick and in being sick you cannot contribute to GDP. But I was glad to see Americans, true to their work-avoiding form, decided that despite a housing crash and an impending social security crisis we've now reverted to credit cards to maintain our consumption (without any additional production).
And you wonder why the dollar is tanking
The chart ends in 2005, before the housing crash began. Also, credit card usage isn't necessarily indicative of indebtedness. I spend more than that on my credit card, but I always pay it off at the end of the month and have plenty left over.
ReplyDeleteIt's just that I make a lot of purchases on the Internet and don't want to bother with the hassle of carrying cash, especially change.
I suspect that part of the increase is due to the rise of e-commerce, which is done almost exclusively through credit cards.
Appreciate the chart and hope you fend off the alien and get well soon.
ReplyDeleteIt would be interesting to see what is average balance on a per capita basis for the various countries.
On the other hand, knowing that may make us all sick!
"Regardless, I am sick and in being sick you cannot contribute to GDP"
ReplyDeleteSick people spend money on doctors. Medical care accounts for more than 15% of GDP.
I think you mean to say you can't contribute productively, which isn't the same thing as contributing to GDP. After all, government spending on pork-bridges to nowhere contributes to GDP, but sure as hell isn't very productive.
You actually have to have jobs that require work.
ReplyDeleteYou can't have that until global wages balance. And I believe the global wage average is pretty low.
So basically all Americans, Everyone of us rich and poor, must take a pay cut. I'm sure some investors will skate through since capital is global. To bad my labor isn't global and my citizenship is highly localized.
Must be nice to be a global citizen for market arbitrage. While the rest of the working stiffs have to bend over for Wall Street.
And on another note, investing in America for real jobs also won't occur until those wages balance either. Until then it is like attempting to use a telescope backwards to look at stars and planets. It's simply unrealistic.
"You actually have to have jobs that require work.
ReplyDeleteYou can't have that until global wages balance."
Anonymous, wages are a function of productivity. The United States has more capital investment per capita than any other country. That's the other side of the trade deficit balance sheet; it a capital account surplus, and we've been running one for a long, long time.
If the average American produced as much as the average Chinese, we'd see similar wages in the two countries. However, the Chinese worker on a car assembly-line has no chance of matching the productivity of a US worker who oversees a fleet of industrial robots building cars.
So don't hold your breath expecting US wages to fall like a rock. Wages in existing lower profit-added industries will slowly decline as other countries become better able to compete in them (while purchasing power increases at a similar rate), and those jobs will be replaced by cutting edge stuff with higher wages. That's how this stuff works.