7 ms·

All the innovation and multitude of startups can't plug the sinking ship that is the US economy. For example, how will these problems be fixed: - US national

All the innovation and multitude of startups can't plug the sinking ship that is the US economy. For example, how will these problems be fixed: - US national debt at 13 Trillion. - US debt held by foreigners at 4 Trillion. - US total debt at 54 Trillion. Unfunded social security and medicare liabilities. - a costly army stationed at 150 countries around the world - an aging baby boomer generation, which will reduce their consumer spending (70% of the US economy is consumer spend) - U6 unemployment rate at 17% Not to mention in this economy, the web startups face - closed platform dominance from facebook/google/zynga/apple. if you build something they want, they will duplicate the functionality quickly - too many other 'me-too' startups. all the seed camp startups are starting to look alike. - lack of monetizing opportunities, as most people still don't like to pay for things online.

ericb 16y ago
Devalue our currency by some amount by printing money over time? I'm not being glib. The effects: Makes debt and social security obligations smaller by paying the dollar amounts, but with less expensive dollars. Force boomers to work well into retirement which is set based on a shorter life expectancy anyway. Reduce our debt to china. There are plenty of bad effects, but it seems the easiest thing to put over on the people, because all the other hard decisions would be politically unpalatable. Aside from this, the current course seems to make it inevitable.
- thetrumanshow 16y ago
  Whoa, full global thermo-nuclear economic warfare? That would be a sight to see.
  - chailatte 16y ago
    It's already started :) Ben Bernanke's second round of dollar printing has already introduced massive inflation in food prices in China, causing them to institute price control this month. Just wait until Asia abandons dollar altogether and all those dollar flows back to US.....
    - PakG1 16y ago
      Nah, I doubt it. Inflation in China's been a longer term trend. http://www.businessinsider.com/qe2-and-chinese-food-prices-2010-11 http://www.businessinsider.com/qe2-and-chinese-food-prices-2...
- nradov 16y ago
  Devaluing the US dollar wouldn't actually fix the Social Security problem by itself due to COLA. http://www.ssa.gov/cola/2011/factsheet.htm http://www.ssa.gov/cola/2011/factsheet.htm I think some form of limited default on our sovereign debt (restructuring) is more likely in the long run, combined with a further increase in the Social Security retirement age and a cut in benefits.
philwelch 16y ago
a costly army stationed at 150 countries around the world I keep seeing this number, always without any kind of citation. What's really interesting is that there are only between 150 and 200 countries in the world. But wait--the US has an embassy in every country it has diplomatic relations with, and each embassy has a detachment of Marines. There are 125 of these detachments (http://en.wikipedia.org/wiki/Marine_Security_Guard http://en.wikipedia.org/wiki/Marine_Security_Guard). 125 and 150 are within the standard rounding error of urban legends, but there's probably another 25 countries you could add to the list if you count military advisors, peacekeeping/humanitarian missions, and even a handful of actual foreign deployments. It's pretty disingenuous to count 1,000 Marines distributed over 125 embassies as stationing the US military around the world, if that's indeed what the people who came up with this number are doing. I'd really like to see a breakdown of this "150 countries" business.
- krschultz 16y ago
  Especially if you count that way, what first world country doesn't have troops stationed in 150 countries? We obviously have major detachments in Germany, Japan, and Korea. Plus the countries supporting the war in Iraq and Afghanistan (I'm sure those two will join my first list in 20 years). Then there are a lot of logistics bases around the world. Does that really count? If we want to be able to project our navy to the other side of the world, you need a refueling stop in Guam. So unless we are talking about cutting the military down to a tenth of what it is now, the # of bases is not what is driving US costs. # of and cost of weapon systems drives it all.
  - eru 16y ago
    > what first world country doesn't have troops stationed in 150 countries? Switzerland, maybe?
    - Semiapies 16y ago
      On the other hand, the Swiss Guard show up wherever the Pope goes.
krschultz 16y ago
Why is the projected deficit so high? Because of the cost of medicare. Which is basically a combination of demographics and the cost of medical care, with the cost of medical care being the driving factor. Doesn't that sound like an arena ripe for disruption by startups? The energy crisis that will inevitably come, doesn't that sound like an arena well suited for startups? There seems to be a tetonic shift right now that a lot of people have a big stake in ignoring. VCs are meant to provide capital to entrepreneurs who need capital. Web apps don't really need capital in the initial stage, everyone knows how easy it is to boostrap your web app these days. That's why angels are growing in prominence - becuase they fit the funding level a lot better. The VC's should be giving their attention to companies that require greater investment - my two examples are healthcare and energy but they are just 2. Solutions to billion and trillion dollar problems yield large returns on a few hundred million dollars. Can you see that coming out of the web sphere? But your average software VC can't really pivot over to those fields, they have expertise in this area, and don't have the skills to evaluate bio-medical and energy startups. So instead of realizing this and packing it up and going home (or at least hiring some new people to evaluate deals) they are just strip mining the web app space until there is nothing left. The guys in those fields don't necessarily have the entrepreneur mentality of a lot of software guys, so they aren't seeking the VCs the same way hackers are.
- kscaldef 16y ago
  > the cost of medicare.. is basically a combination of demographics and the cost of medical care, with the cost of medical care being the driving factor. Doesn't that sound like an arena ripe for disruption by startups? Honestly, not particularly to me. As far as I can tell, this is a largely social issue. The idea that we might not give the best care possible to someone, that we might let someone die when we could keep them alive, that we might put a dollar figure on a person's life is an anathema to many people. I'm not really sure how a startup is going to disrupt that.
  - nodata 16y ago
    I'm not really sure how a startup is going to disrupt that. Well one way would be to convert the dollar amount to something else: show how many lives could be saved if the money were spent differently.
orangecat 16y ago
To be painfully blunt, most of those problems are the direct result of having a bunch of old people who can't be economically productive and who are extremely expensive to keep alive. The best solution to that is to cure aging.
nl 16y ago
closed platform dominance from facebook/google/zynga/apple. if you build something they want, they will duplicate the functionality quickly Facebook: founded 2004 Google: founded 1998 Zynga (!): founded 2007 Apple: founded 1976, but current resurgence began perhaps with the introduction of the iPhone in 2007. I think it's pretty difficult to argue that it's a problem if a company formed in 2007 is now dominant enough that you list it instead of traditional heavyweights like Microsoft or IBM. lack of monetizing opportunities, as most people still don't like to pay for things online. Facebook, Google and Zynga all seem to have made it work...

ericb 16y ago

Devalue our currency by some amount by printing money over time? I'm not being glib. The effects: Makes debt and social security obligations smaller by paying the dollar amounts, but with less expensive dollars. Force boomers to work well into retirement which is set based on a shorter life expectancy anyway. Reduce our debt to china. There are plenty of bad effects, but it seems the easiest thing to put over on the people, because all the other hard decisions would be politically unpalatable. Aside from this, the current course seems to make it inevitable.

thetrumanshow 16y ago
Whoa, full global thermo-nuclear economic warfare? That would be a sight to see.
- chailatte 16y ago
  It's already started :) Ben Bernanke's second round of dollar printing has already introduced massive inflation in food prices in China, causing them to institute price control this month. Just wait until Asia abandons dollar altogether and all those dollar flows back to US.....
  - PakG1 16y ago
    Nah, I doubt it. Inflation in China's been a longer term trend. http://www.businessinsider.com/qe2-and-chinese-food-prices-2010-11 http://www.businessinsider.com/qe2-and-chinese-food-prices-2...
nradov 16y ago
Devaluing the US dollar wouldn't actually fix the Social Security problem by itself due to COLA. http://www.ssa.gov/cola/2011/factsheet.htm http://www.ssa.gov/cola/2011/factsheet.htm I think some form of limited default on our sovereign debt (restructuring) is more likely in the long run, combined with a further increase in the Social Security retirement age and a cut in benefits.

philwelch 16y ago

a costly army stationed at 150 countries around the world I keep seeing this number, always without any kind of citation. What's really interesting is that there are only between 150 and 200 countries in the world. But wait--the US has an embassy in every country it has diplomatic relations with, and each embassy has a detachment of Marines. There are 125 of these detachments (http://en.wikipedia.org/wiki/Marine_Security_Guard http://en.wikipedia.org/wiki/Marine_Security_Guard). 125 and 150 are within the standard rounding error of urban legends, but there's probably another 25 countries you could add to the list if you count military advisors, peacekeeping/humanitarian missions, and even a handful of actual foreign deployments. It's pretty disingenuous to count 1,000 Marines distributed over 125 embassies as stationing the US military around the world, if that's indeed what the people who came up with this number are doing. I'd really like to see a breakdown of this "150 countries" business.

krschultz 16y ago
Especially if you count that way, what first world country doesn't have troops stationed in 150 countries? We obviously have major detachments in Germany, Japan, and Korea. Plus the countries supporting the war in Iraq and Afghanistan (I'm sure those two will join my first list in 20 years). Then there are a lot of logistics bases around the world. Does that really count? If we want to be able to project our navy to the other side of the world, you need a refueling stop in Guam. So unless we are talking about cutting the military down to a tenth of what it is now, the # of bases is not what is driving US costs. # of and cost of weapon systems drives it all.
- eru 16y ago
  > what first world country doesn't have troops stationed in 150 countries? Switzerland, maybe?
  - Semiapies 16y ago
    On the other hand, the Swiss Guard show up wherever the Pope goes.

krschultz 16y ago

Why is the projected deficit so high? Because of the cost of medicare. Which is basically a combination of demographics and the cost of medical care, with the cost of medical care being the driving factor. Doesn't that sound like an arena ripe for disruption by startups? The energy crisis that will inevitably come, doesn't that sound like an arena well suited for startups? There seems to be a tetonic shift right now that a lot of people have a big stake in ignoring. VCs are meant to provide capital to entrepreneurs who need capital. Web apps don't really need capital in the initial stage, everyone knows how easy it is to boostrap your web app these days. That's why angels are growing in prominence - becuase they fit the funding level a lot better. The VC's should be giving their attention to companies that require greater investment - my two examples are healthcare and energy but they are just 2. Solutions to billion and trillion dollar problems yield large returns on a few hundred million dollars. Can you see that coming out of the web sphere? But your average software VC can't really pivot over to those fields, they have expertise in this area, and don't have the skills to evaluate bio-medical and energy startups. So instead of realizing this and packing it up and going home (or at least hiring some new people to evaluate deals) they are just strip mining the web app space until there is nothing left. The guys in those fields don't necessarily have the entrepreneur mentality of a lot of software guys, so they aren't seeking the VCs the same way hackers are.

kscaldef 16y ago
> the cost of medicare.. is basically a combination of demographics and the cost of medical care, with the cost of medical care being the driving factor. Doesn't that sound like an arena ripe for disruption by startups? Honestly, not particularly to me. As far as I can tell, this is a largely social issue. The idea that we might not give the best care possible to someone, that we might let someone die when we could keep them alive, that we might put a dollar figure on a person's life is an anathema to many people. I'm not really sure how a startup is going to disrupt that.
- nodata 16y ago
  I'm not really sure how a startup is going to disrupt that. Well one way would be to convert the dollar amount to something else: show how many lives could be saved if the money were spent differently.

orangecat 16y ago

To be painfully blunt, most of those problems are the direct result of having a bunch of old people who can't be economically productive and who are extremely expensive to keep alive. The best solution to that is to cure aging.

nl 16y ago

closed platform dominance from facebook/google/zynga/apple. if you build something they want, they will duplicate the functionality quickly Facebook: founded 2004 Google: founded 1998 Zynga (!): founded 2007 Apple: founded 1976, but current resurgence began perhaps with the introduction of the iPhone in 2007. I think it's pretty difficult to argue that it's a problem if a company formed in 2007 is now dominant enough that you list it instead of traditional heavyweights like Microsoft or IBM. lack of monetizing opportunities, as most people still don't like to pay for things online. Facebook, Google and Zynga all seem to have made it work...