Friday, December 28, 2012

The Productionless Human Bubble

No matter how complicated economists try to make economics, it really is a simple study.  If you can understand core concepts like why you can't print off more money, what is "wealth," etc, you are about 90% there, heck, you're probably better than most economists who've been brainwashed to look at "production surplus charts" and are addicted to Black Swan econometric models.  And so while economists on cable TV are citing macro and global economic figures and concepts, I want to introduce a simple, micro-concept.

If people don't produce, they will die.

Yes, we can make it more complicated.  We can take overly productive people and have them support unproductive ones.  We can borrow money from productive people overseas to support unproductive people here today.  We can even borrow from productive people of the future who don't exist yet to support unproductive people today.

But in the end, if there are too many parasites and not enough producers, the system will fail.

What's funny though is if you look at the resources we spend on the unproductive people it has all the markings of a financial bubble.

We currently spend nearly 70% of our governmental budgets of wealth redistribution, supporting the unproductive people.

We are borrowing from other productive people in foreign countries to support our unproductive ones.

And we are borrowing from the future to support our current unproductive classes.

If you add it all up, the trillions of dollars we spend every year (whether we have it or not) on unproductive people dwarfs the Dotcom Bubble, the Housing Bubble, the Education Bubble, and the Retirement Bubble.

And like all bubbles, this one will pop as well.

The problem is this bubble is not a financial one, it's a human one.  And when I say "pop" I mean impoverishment and death.

I do not wish to sound Malthusian about this, but there have been other "human bubbles" that have popped. Most notably when countries went full blown communism.  China's great leap forward and Stalin's brilliant starvation schemes put the Nazi's to shame in their ability to kill.  And it was all done in a very simple way - starvation.  In short, the economic environment changed to the point the production or earnings (in the form of food) tanked and was not adequate enough to support the price (in the form of human lives). 

Of course, these were a bit more rapid conversions from one economy to another, but the same thing is happening here in the US, albeit much more slowly.  The government is growing and crowding out the private sector to the point it accounts for 40% of our economy.  More and more people are dependent upon government for their survival to the point 1 in 2 people in the US now collect a government check.  Our economic growth rate has slowed to about half of what it used to be.  And the unproductive people tend to have more children than the productive ones, ensuring the ratio of parasites to producers will continue to increase.

The question is when will the bubble burst.

It's impossible to say, but like all bubbles it will come when lenders no longer extend credit.  China will have had enough.  The Arabs will have had enough.  Even US bond holders will have had enough.  They will realize the US does not have the economic productive capacity (desire, actually) to produce the wealth necessary to pay back its debts.  At that point in time they will cut us off and the US will take on the mantle of a charity case, desperate of "foreign aid" much like Haiti or sub-Saharan African countries.  There may be some debt forgiveness, but all the debt forgiveness in the world will not solve the problem of a lack of production.  We will become a welfare state and get to enjoy the death rates, poverty rates, starvation rates, and infant mortality rates of our third world sister countries.

And we will all blame Bush and Big Oil.

Oh, I know, I know, this is harsh and how dare I talk about death, but ignoring it won't stop it from happening.  Besides, this is how I enjoy the decline.

Enjoy the decline!

13 comments:

  1. China's great leap forward and Stalin's brilliant starvation schemes put the Nazi's to shame in their ability to kill.

    In the case of both Stalin and Mao, neither mass starvation resulted from a desire to support the unproductive parasites at the expense of the productive. In both cases, the regime wanted to create hard industry but lacked the wealth to do so, and attempted to generate this wealth by exporting food confiscated from the countryside. In Stalin's case, this worked (he created hard industry) but in Mao's case it did not. Neither Stalin nor Mao had any use at all for economic parasites, since they did not need to bribe parasites for votes as our politicians do.

    In short, USSR and PRC mass starvation was not the result of the collapse of a bubble but brutal, deliberate economic policy.

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  2. Tomato, tamato, still government intervention.

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  3. I've been going back and reading Jefferson, Franklin, Washington, Madison, and Adams and they all seemed to worry that the populace would eventually discover they could have the government borrow money and leave it to future generations to pay it off and that would be the beginning of our decline. All those old white males turned out to be right. Thinking long term seems to require a certain IQ threshold and the average voter is now probably below whatever that threshold is.

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  4. Anonymous7:47 AM

    What we need to do is bring back the consequences of sloth, failure, and stupidity. We need to stop rescuing lazy, stupid and immoral people. We need to see hordes of people starving so we can say, "See what skipping school and watching The View leads to?"

    Mock the obese. Ridicule the lazy and club hippies like baby seals.

    Bring back the Coloseum and put it on Pay Per View. Feed the liberals to the lions.

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  5. Lib Arts Major Making $31k/yr8:47 AM

    If you skip all the paragraphs and just read the one liners, the post says the same thing the last 10 "Enjoy the Decline" posts say.

    Just sayin!

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  6. Anonymous10:54 AM

    WWII on the Eastern Front has sometimes been described as a competition between Hitler and Stalin to see who could kill the most Russians - with Stalin winning hands down.

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  7. "If you skip all the paragraphs and just read the one liners, the post says the same thing the last 10 "Enjoy the Decline" posts say.

    Just sayin!"

    Yet that message is going to stay relevant for years to come. The whole Western world is declining and slowly succumbing to the welfare state. Social democracy is doing its job despite the great advances of the Internet. It's saddening.

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  8. Anonymous1:38 PM

    I've said for years that this country must ignore the parasites and let them die off just as the creatures of the wild do or risk bringing the whole herd down. Look at the upside; new job creation for collecting the bodies and a stronger, healthier society!

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  9. Matt Strictland3:05 PM

    The article is true enough but there is a reason we have a welfare state, modern production far exceeds anyones ability to actually acquire the goods it produces.

    Its not exactly a new problem, Marx remarked on it and societies as far back as Rome had welfare states for this reason (and others)

    Efficiency after a while is self destructive.

    The problem is that models designed to deal with it don't work. Even the Japanese way, that of social custom creating bloated layers of middlemen was a flop.

    Basically humans have social carrying capacity and its near its limits. Tribal banding primates wired for zero sum cannot cooperate on a large scale for too long.


    So folks understand, there are two ways out without redistribution/inflation both bad.

    #1 The African method of mass poverty and suffering on an unfathomable scale (modern Africans are poorer than Medieval Brits) till some kind of die back or event reduces numbers

    or t

    #2 The Modern European one where people stop having kids they can't afford. Thats a lot easier on everyone and even beneficial in the short run but the consequences are uglier in the long run ironically. Population replacement by R selection types or social elimination is not pleasant.

    And note the issue will only get worse so if businesses want a market other than the State they had better figure out how to get money in peoples hands. if they don't, they will fail long term

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  10. Tomato, tamato, still government intervention.

    Nah. It makes a difference if they starved their people because they were (competent and evil) and not (stupid and evil).

    It also makes a difference, as I said, that Soviet and ChiCom government intervention was not designed to bribe vermin for their votes, but to increase national power. Say what you want about Stalin and Mao, at least they believed in making Russia and China powerful, unlike our own elite which hates America and Americans alike.

    PS FUCK the fucking captcha, geez.

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  11. This just doesn't apply to the US. Pretty much most western countries are on this path. Some more than others.

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  12. "The article is true enough but there is a reason we have a welfare state, modern production far exceeds anyones ability to actually acquire the goods it produces."

    False.

    Look at the modern entertainment industry - how much of that do we need?

    You're conflating necessity with consumer demand - a disingenuous Marxist argument. I'm surprised the Captain even let you post.

    If people are left to their own devices, they will naturally create new industries for people to spend their money on. All of the things that we consider "superfluous", such as home decor, video games, sports, etc. are really ways to deal with the fact that we can produce all of our needs without much labor.

    Thus superfluous additions to the economy allow money to flow through everyone's hands.

    The problem is when government intervenes and prevents new industries from being born, thus keeping money in old hands and preventing new innovators from coming into the market.

    For example, consider www.airbnb.com - a modern innovation that allows regular home owners in cities to make a quick buck. Guess what? Cities and countries all over the world are moving in to ban this innovation because the hotel industry is being threatened. Thus the rich ass Hoteliers get to keep their customers, competition free, while the government continues to impoverish it's citizens.

    And then once the citizens are impoverished, the government says "Oh wow! Look at how the free-market has failed. We need create lots of welfare programs so the people do not suffer!" and then they make the problem 100x worse.

    So take your Marxist bullcrap outta here, and go read some actual economic theory by Hayek or Von Mises please.

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  13. Yes, this is true, but the ones doing the economic, political, and social destruction do not care about the consequences of their actions, for they want this crisis and eventual collapse of Capitalism and Democracy to occur. This is how Marxist Communism is theoretically formulated and designed to internally destroy a Nation like America, via indoctrination and subversion of the people of a nation, to carry out this end goal. Power and Control are anti-American Marxists #1 goal.

    A crisis to a marxist, or fascist , or Islamist, etc, is like food to a starving person- That's how they all take over authority and power.

    Look at the Great Depression - who benefited- in America, it was FDR and the social Democrats who started the New Deal/Socialist govt order, instead of of solidifying Free market Capitalism. In Germany it was Hitler.

    That's how Obama took the 2008 election, from the housing mortgage and banking economic crisis meltdown, which he-Obama, was behind in the polls to McCain, leading into Oct. But Obama, like a good Marxist, used this crisis to blame the Republicans on, even tough it was liberal Democratic made crisis, but perception being reality to the public- thus transferred that blame in association from Bush to McCain.

    Once Obama took over the reins of power- he started his agenda of transformation of America from Capitalist Free Market Democratic Republic Nation, to his Socialist Marxist transformation, which means as Marxist theory goes, he must internally destroy and collapse the system, to replace it with a Communist system.

    Just look at all that has happened thus far, connecting the dots- the facts to date, if one does not believe it so.

    So, for one to be warned of what can and is happening to America, one has to care.. And the people in charge now, aka the powers that be, the Democratic Party/Socialist Marxists, do not care.. as this is what they want in the first place.

    They- Obama and his army of liberal progressive Socialist Marxist Democrats, Union useful idiots, Hollywood / the leftwing MSMedia subversives, etc., all they hate America as a US Constitutional Republic, thus they hate Constitutional Conservatives / Reagan Tea Party folks,aka We the People,(not RINO's who are aligned with Obama), who are the only defenders of America and the US Constitution, where people are happy and prosperous, as you cannot convert and make any progress changing the system, when the system makes people happy and prosperous, except by direct revolt force like the Russian Bolshevic Revolution, or the French Revolution, which would never work in America, thus the need for crisis to manipulate the public into thinking their way.

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