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I think the story of not having enough young people to pay for older people is missing a bit of evidence. Especially since if labor were scarce we would be seei

I think the story of not having enough young people to pay for older people is missing a bit of evidence. Especially since if labor were scarce we would be seeing increases in wages, inflation and a tight labor market. Instead we have the exact opposite. Really the economy's limiting reactant for the past few years has been demand not labor especially considering that a 2x improvement on productivity is not that big if we consider that worker productivity has been increasing much faster than that over the same period of time. How governments fund their programs is an issue but relative scarcity of labor (or resources) in the economy isn't one of them. This is especially true in europe where lack of inflation has been a real issue for so long.

candiodari 10y ago
Ever since the 2000 crisis labour has been abundant. So we can't even use the labour capacity we have (not enough jobs for everybody). But that is one perspective. It very much depends on viewpoint even here. On one hand Obama and the government are lying : there certainly aren't enough jobs to go around, and so many people are desperate for work. They do tend to "have work", so the government is not technically lying, but they have part-time jobs that they would very much like to replace with a full time job. A simplification that has been valid for pretty much the entire 20th century has been that a given labourer has a given productivity. So I assume that if we have 2 young people for every 1 old person or child, for example, that the economy would work to make that actually happen. This is not guaranteed, of course, but historically this worked. As for the productivity measure you mention, that's not what I've seen in the data. Productivity measurements rose for most of the 20th century, then flattened across the world starting around 1985 or so. There has been little to no productivity rise in the US since 2000, and most of the world is worse off, with the notable exception of China and some smaller parts of Asia. Lack of inflation rises are masked more than a little bit by government fudging. By the inflation measures of the 1980s we've consistently seen 3-4% inflation in Europe (except in the south). The measure currently used in the US is called "PCE deflator". You should look up why it's called that.

candiodari 10y ago

Ever since the 2000 crisis labour has been abundant. So we can't even use the labour capacity we have (not enough jobs for everybody). But that is one perspective. It very much depends on viewpoint even here. On one hand Obama and the government are lying : there certainly aren't enough jobs to go around, and so many people are desperate for work. They do tend to "have work", so the government is not technically lying, but they have part-time jobs that they would very much like to replace with a full time job. A simplification that has been valid for pretty much the entire 20th century has been that a given labourer has a given productivity. So I assume that if we have 2 young people for every 1 old person or child, for example, that the economy would work to make that actually happen. This is not guaranteed, of course, but historically this worked. As for the productivity measure you mention, that's not what I've seen in the data. Productivity measurements rose for most of the 20th century, then flattened across the world starting around 1985 or so. There has been little to no productivity rise in the US since 2000, and most of the world is worse off, with the notable exception of China and some smaller parts of Asia. Lack of inflation rises are masked more than a little bit by government fudging. By the inflation measures of the 1980s we've consistently seen 3-4% inflation in Europe (except in the south). The measure currently used in the US is called "PCE deflator". You should look up why it's called that.