Demography is a Bitch: 02

In the first part of this series I had referred to universality of the demographic changes (but how the west is much worser off than others). I had also talked about the loss of a established life cycle model causing additional complications. I was initially going to write a much more neutral and objective second part, but I have decided to fry some groups for my amusement. Therefore I will talk about how ape mind derived attitudes prevent idiots from adapting to the changing world. So let us start of by defining an idiot.

Most of you would consider an person of sub-average cleverness as an idiot. I would point out that it the clever and delusional moron who is truly an idiot. The dull person is aware of his/her limitations in a way that so called ‘high-IQ’ morons never are. IQ measures how well you can jump through hoops, not whether you can understand why they exist.

I like to think of such people as show dogs that could never last in the wild, and as you know the performance of show dogs can improve with good training. This is a subject of future posts, but it has a very important link to the main subject of this post, namely the effect of technology and demographic changes on human beings.

The real problems arise from feedback loops. Let me explain:

1. Birthrates of around 2 are perfectly acceptable as long as infant mortality is very low and people are feeling secure about their future.

2. However a flat demographic profile ensures that the +65 year olds will ultimately make a significant percentage of the population (say around 20%).

3. Increases in life expectancy have largely been due to inexpensive interventions and drugs. Expensive interventions add very little to life expectancy.

4. Any attempt to systematically reduce life expectancy will create dissent and widespread bad faith causing a collapse of the current system.

5. The current system is much more complex than we realize and depends on the good faith of most participants. Attempts to unravel it will cause problems beyond anyones wildest guess.

6. However our system is also based on high personal consumption which is paid by money paid through jobs (or credit).

7. The global spread and growth of technology has made many previously untouchable jobs redundant. More will follow.

8. So how does a system that relies on consumption to circulate money, work if participants have no jobs (and therefore no money).

9. All retirement plans are based on the assumption of sub 2% inflation and over 8% growth over decades. How does that work out?

10. Assuming you could goose up the stock market with scams, the major problem still remains. What happens when people (or pensions plans) start cashing out? Who is going to buy those shares? What about bonds? Who will buy long-term debt if the issuer cannot grow over more than a couple of years?

11. If the +65 consume much less than they used to (no money), they will set of another deflationary spiral that will take down more jobs.

12. Powerful and useless groups like banksters, managers, lawyers, the medical profession and entrenched public unions are trying their best to maintain status quo. They want to ignore the fact that our current situation and directions are untenable, over time periods of even 5-10 years.

13. The fundamental assumption for investing any money in the real world is that it will grow, but how can it grow over any prolonged period if the system itself is shrinking and deleveraging?

So what will it be?

  1. rightsaidfred
    January 23, 2010 at 2:20 pm

    So what will it be?

    I think I’ll have ice cream.

    Other feedback mechanisms will come into play. Just because retirement plans have over promised does not mean that all must be destroyed. We can ramp some of this down. People over 65 are capable of doing productive work.

  2. joe
    April 25, 2010 at 2:18 pm

    The debt based economic system will collapse in the 2030s due to molecular manufacturing eliminating the need for money, and software/robotics replacing almost 50% of jobs. We will eventually have a post scarcity economy based on abundance, but not before these events cause massive social upheaval and likely wars. The elites who profit from the wage slavery paradigm as it exists now will not give up their power voluntarily. It’s going to get ugly.

    http://www.marshallbrain.com/robotic-nation.htm

    http://www.crnano.org/overview.htm

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