Sorry, Kids. We Ate It All.

http://www.nytimes.com/2013/10/16/opinion/friedman-sorry-kids-we-ate-it-all.html

by rpm4321 • 13 years ago

40 17 13 years ago

wiremine• 13 years ago

I keep wondering: if we applied 50% of the effort we applied to stopping SOPA, what would the world look like?

twoodfin• 13 years ago

Assuming "we" is the young, tech-focused, urban demographic of hn: At least from my anecdotal experience, that demographic did apply an awful lot of effort in 2008 to get the President they wanted, a supermajority in the Senate they wanted, and a House majority they wanted. Did anyone think that a Washington that looked like that would have any incentive at all to modernize (sorry, "privatize"!) Social Security?

jdmitch• 13 years ago

Whenever Druckenmiller (a friend) is challenged by seniors, who also come to his talks, that he is trying to start an intergenerational war, he has a standard reply: “No, that war already happened, and the kids lost. We’re just trying to recover some scraps for them.”

Are there still any scraps? I thought you ate it all!?

wheaties• 13 years ago

But unfortunately SS only worked when more people were joining the workforce than were leaving. Also, the life expectancy was not as great. SS is an inter-generational transfer of wealth, decided by our parent's parents but paid for by the children of each generation.

richieb• 13 years ago

Unlike in the past when the elderly lived and were supported by their kids....

mathattack3• 13 years ago

I still think we will muddle through it. Things that aren't sustainable don't continue. People will start charging more to lend to the US. Systems will feel stress. Health care will be rationed because there is no other way. Everyone will work longer because there is no other option. We may need to inflate some if our wealth away to lighten the debt load.

The wake up will be someone else's system collapsing first (Japan? France?) which will cause global economic stress. After the flight to US dollars, our borrowers will force us to get our act in gear.

jstalin• 13 years ago

My bet's on Japan.

mathattack3• 13 years ago

I love Japan as a country so I hope you are wrong. The demographics suggest you are right. The powerful interest groups that Friedman mentioned also exist there too.

Two differences with Japan: First, their debt is domestically held so they can avoid bond vigilantes. Second, as a country and culture they have been able to come together and solve great problems when they get consensus. (They just haven't had that consensus in decades)

exit• 13 years ago

how could they possibly work more?

mathattack3• 13 years ago

By longer I mean having a later retirement age.

Retric2• 13 years ago

Nice how they just stuck in cutting corporate taxes to zero. Sadly job creators are mostly small companies withy tiny tax burdens highly profitable companies tend to grow little because there extracting profit vs increasing the number of jobs in search of future growth.

ixnu2• 13 years ago

Do you have any evidence to support this? The data that I can find point to a more subtle conclusion that does not fit this oft-repeated statement (myth?).

"We find that the relationship between firm size and employment growth is sensitive to these issues. However, our main finding is that once we control for firm age there is no systematic relationship between firm size and growth."

http://econweb.umd.edu/~haltiwan/size_age_paper_R&R_Aug_16_2...

EDIT:

I should say that it's not that small businesses don't create jobs, it's just a particular type of small business (young ones) that create most of them.

Additional discussion - http://www.richmondfed.org/publications/research/econ_focus/...

Retric2• 13 years ago

Your missing the point it's not a question of size it's a question of profitability.

There is a popular idea that reducing taxes on profits would spurn significant job growth. However doing so in no way changes the math on how many job's maximize profits. Further, profitable company's that higher people temporarily reduce there profitability which directly reduces their tax burden and has the same effect cheaply and automatically. Also, profitable company's can borrow money to assist growth so if you look at things from an accounting perspective removing all taxes on profits has a tiny impact on how fast a company can grow.

Note, there are ways to change the tax structure to actually promote job growth in the short term. Such as a reduction in payroll taxes for company's that employ more people now than they did at any time in the last 5 years. However, none of them change the long term math on what the ideal number of employees for a stable company is.

r00fus• 13 years ago

Exactly, in fact some would argue that corporate tax rates are positively correlated with growth. This study shows that in effect, if any correlation exists, it's marginal:

http://www.epi.org/publication/ib364-corporate-tax-rates-and...

chrisbennet• 13 years ago

There is no evidence that "cutting corporate taxes to zero" will cause companies to hire more people.

(2012) New Study: No Evidence That High-End Tax Cuts Help the Economy: http://www.offthechartsblog.org/new-study-no-evidence-that-h...

(2012) Nick Hanauer's (banned) TED talk: "Rich people don't create jobs" http://www.youtube.com/watch?v=CKCvf8E7V1g

Sorry, Kids. We Ate It All.

Related Stories