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Everyone said, "Bail out the banks and you risk turning into Japan."

You bailed out the banks. Now you're turning into Japan.

Mazal tov, America! You're committing national suicide!




Assumption here being that US needs more younger people.

Let's see a couple trends here though:

1) US life expectancy is on the rise, I guess one of the most expensive healthcare systems in the world is good for something.

2) Average retirement age is moving farther ahead - Reuters recently ran an article about startup founders who are 60+ y.o. http://www.reuters.com/article/2012/11/27/us-valley-ageism-i...

3) Rise of robotics outsourced a good portion of typical physical jobs to machines - iRobot, Kiva Systems, Tesla's car-manufacturing robot arms

4) Youth unemployment is on the rise

5) Youth STEM skills, the only applicable skills that matter in current economic climate, are declining

Why does the country need large amounts of young people again? A bunch of the assumptions - you need younger people to slave off to contribute taxes towards the retirement of the elderly - are a bit shaky to say the least. Most of the youth employed at various menial jobs are earning low enough income to qualify them for tax credits, so they're not a huge revenue source.


A bunch of the assumptions - you need younger people to slave off to contribute taxes towards the retirement of the elderly - are a bit shaky to say the least.

The assumption that they will be able to supply that revenue is indeed shaky, but the assumption that one needs them to do so is well-founded. Traditionally immigration has been the safety valve for demographic mismatches, as ably documented here: http://www.ssab.gov/documents/immig_issue_brief_final_versio...


> 3) Rise of robotics outsourced a good portion of typical physical jobs to machines - iRobot, Kiva Systems, Tesla's car-manufacturing robot arms

This is really of no consequence. Do you know any janitor who lost a job to roomba?

CNC have been there en mass since 1970s, and robotics since 1980s. A robotic assembly line is featured in final scene of Terminator (1984), and it was very much state of the art then.

However, contrary to doomsday prophecies of the time, what replaced American jobs were not the soulless machines in Japan, but penniless workers in China. The future never seems to play out in the coolest sci-fi way.


> However, contrary to doomsday prophecies of the time, what replaced American jobs were not the soulless machines in Japan, but penniless workers in China.

This is, for many industries, clearly not the case.

Electronics used to be hand soldered. Now hand soldering is rare and machines are common. Those machines have clearly replaced human workers. A teeny tiny old pick and place machine can place 4,000 components per hour. That machine is easily available to small business. You need three staff (3 shifts of 8 hours each) to run that machine.

IC stuffers (a machine that takes through hole integrated circuits and places those into a PCB) have existed since 8" drives were common.

Look at the newspaper print industry - thousands of workers have been replaced by technology.

It is trivially easy to find people who have lost their job to technology.


It might not have happened as quickly as predicted. That doesn't mean it's not happening at all. http://techcrunch.com/2012/11/13/foxconn-allegedly-replacing...


It's just the matter of cost. Soulless machines are just more expensive to design and slower to roll to market. Some of the technologies (like self-checkout registers at supermarkets) make no economic sense until a certain price point is reached.


Interesting question: is it cheaper to use a low-skill, uneducated workforce for low-skilled work, or a smaller but somewhat higher-skilled and educated workforce to maintain the mechanized workforce replacement machines, as well as the smaller set of workers to design and program the machines? It's usually easier to point a guy to a corner and tell him to sweep, than it is to program a machine to do it and to get politely out of the way when a customer walks by.

Who pays for those higher skilled workers?

Can you get enough of them?


There's a lot of overhead (liability, benefits, dealing with people) that's removed when using machines.


Benefits are easy: don't offer them, or make sure you structure the work week so the employee doesn't get enough hours to qualify.

People deal with unplanned for interactions with people better than a machine, they're much more flexible.

Liability, you can go either way on that.

I think it's an open question still, when you get down to low enough skill and pay.

Edit: People are the ultimate low skilled contingent worker. A pre-programmed AI-equivalent in every box.


It's less about having a class of youth, as having a group of people up-and-coming to replace the old guard.


This is true for agrarian societies where if you had 20 people of current generation working the land, you'd very likely need 20 or more in the next generation.

Rise of automation and increase in average employment spans removes that urgency. Rise of health care standards slowly eradicates the image of a feeble senile 70-year-old who is threatening kids to get off his lawn and needs constant medical attention 24/7.

You still need the next generation, but it doesn't have to be 1x-2x of the current one.


Is this[1] the problem in Japan that you are talking about? Seems like the main idea is we had to find a way to get the banks to start lending again. The government can't open a shop and lend to small businesses themselves. What other option did we have other than to bail out the banks? Honest question. I don't know very much about these things.

[1]: http://web.mit.edu/krugman/www/bailout.html


The bank bailout had nothing to do with anything. This is a longer term trend.


If we are discarding of a distinction between correlation and causation, the best way to increase birth rate is to plunge the public into crippling poverty.




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