How ZPG affect our deficit economy?

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   jomineposted 12 years ago

   Our present economy is deficit economy, that is, businesses works on borrowed money hoping there product will be absorbed by growing demand. At the same time technology is becoming more and and more efficient and needs less and less human intervention, means less labor work force. So what happens when zero population growth occur, when consumer demand decreases due to less population and less affordability(no work, no pay)?

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      dutchman1951posted 12 years agoin reply to this

      what happens is no sales. business traditionaly, smart ones I mean, will lay off against no sales. cut it way back. The dumb ones keep borrowing against their accounts recievable, a move that usualy ties up profits from 30 to 120 days out, and kills projected income. and they Bankrupt and die out in a year.
      
      If they are heavely invested in high tech machinery, they sell it, write off the loss and or take it overseas for low wages..
      
      High Tech does not mean less labor. it means higher paid labor to maintain and run the machinery. It is higher wages for them to operate. Thats why not much growth right now.
      
      No sales means no money for beter trained workers.???????
      
      They need open Markets to sell in, and right now it is not lucrative for them. So...no growth. They can not forcast long term, because we are recessive right now. And we have taught Business that temporary, no benifits workers are ok!   So not to much stimulated product buying in the USA right now either.
      
      Our problems are deep and varied. it's gonna take a while to get up from this.

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   Cagsilposted 12 years ago

   Your post is flawed.
   
   Yes, much of America's economy is based on debt, but that isn't the problem with regards to growth.
   
   Educating citizens on how to best use the economy is the biggest problem. Too many people think that they should work a job for their entire life and then depend on social security as a retirement plan, which is false/distortion/misinformation, in and of, itself.

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      jomineposted 12 years agoin reply to this

      OK, I'll rephrase the question.
      All businesses works on the principle of increasing demand. What happens when demand decreases owing to reduction in population?
      
      I agree it is a hypothetical question for the time being, as the projected world ZPG is only by 2075.But it is not too far away either.

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         Cagsilposted 12 years agoin reply to this

         All business works on providing a supply to meet a demand.
         The demand softens/decreases, not due to a reduction in population, but with people's ability to pay the price of said product or service offered. The reduction in population isn't a problem, because reduction in population isn't happening.
         Interesting to see you saying that 2075 isn't too far away. Considering it actually is too far away, with regards to determining supply and demand. There are way too many other factors to account for that anyone looking that far ahead is going to reach a false conclusion.

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            jomineposted 12 years agoin reply to this

            All business works on providing a supply to meet a demand.
            The demand softens/decreases, not due to a reduction in population, but with people's ability to pay the price of said product or service offered. The reduction in population isn't a problem, because reduction in population isn't happening.
            
            Demand!!! No business can know demand, at best they can make an educated guess. Demand is positively correlated to population. The more the population, the more the demand for any given product. As a result, as the population decreases demand also decreases. When demand decreases sales decreases and lay off starts. No job, no money, another factor that reduce demand(desire alone will not increase demand). So there is an inverse spiral. As sales decreases, business  will not be able to pay back loans causing another economic collapse!! What will happen if global economy collapse???

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      dutchman1951posted 12 years agoin reply to this

      self serving crapola Cag, you earn your own way, you make your retirment, and if you have the intitlement, you are to recieve it, period.
      
      The problem with Social Security is to many so called well educated power broker Politicans have raped the system, left it with IOU's and refuse to fix it.
      
      Because they found out they can scare and spin so called well educated younger folks into dumping it, and they keep their power and Position, and do not get exposed.
      
      Progressives have run this game before. It is not your place to dictate anything about a persons retirment that they earned. You did nothing to earn it, you did nothing to assist them to make it. You have no say in it, just your own retirment. Work on your own nest egg.
      
      If you want wealth, get off the net chat and go work for it. This argument is the same Old game with a new dress.

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         Cagsilposted 12 years agoin reply to this

         Hey Dutchman, you're making no sense with the above statement. First you tell me self-serving, which I am not sure you put into the right context, adding my Name to the end of it.
         
         If the people are educated, then social security would not need to be in existence to begin with. Got it?
         At least you got this statement right.
         This statement is BS. PERIOD!
         Actually, social security is an entitlement program that should NOT exist to begin with.
         This was my point to begin with, it just escaped you for some odd reason.
         Again, I don't know why you are addressing me in this manner. It seems like you are completely disrespecting me for absolutely no reason. You're not one to offend people normally, so I can only think you are confused in some manner about something you misread in my previous post or just misunderstood something I said.
         Old game? I am glad you think it's a game.

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            dutchman1951posted 12 years agoin reply to this

            Cag, I  am sorry, not ment to offend.  I am tired Cag, coming to the end of work, and have put a lot of years and monies into the system as it was made. Just tired of people telling me I am not entitled to the retirment I put in the money, paid in to have. sensitive about it I guess.  It seems a big political Game to me, very suspicious of it.
            
            I realise there are flaws, but it can be fixed so all of us can have that. The Senators and Congress have raped the fund almost dry and are not telling us the truth.
            
            I got angry at the attitude of a person telling me tough, dont care about you, you can not have your money. I built mine Cag, it belongs to no one else. Not deliberately dis-respecting, but a bit angry at the attitude, people have about that.
            
            to me its an absolute flood of progressive hype. It is broken, yes, not bankrupt. They need to put back the monies taken for thier pet projects to get votes.  To me a shell game kind of thing.
            
            anger not at you personaly but venting at the attitude of the time, I guess.    sorry  to offend   

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   CHRIS57posted 12 years ago

   Zero population growth will only make things more obvious. It won´t change the economic situation and perspective.
   The real problem is that the state of the art technology in the world nowadays allows for a percentage of producing/harvesting of some 15% of a given GDP. So if industrial output is less than this figure, there will be borrowing necessary or - shrinking the economy, shrinking the GDP until the producing percentage is reached.
   All countries on this planet who do have higher industrial output that world median 15% are running surpluses. All others have to borrow or shrink until a balance is established.
   Until today the US was able to borrow the money. Has nothing to do with ZPG, more with the USD being a world reserve currency.
   Cross check for this simplified macroeconomic model: The US has 10% production output, that leaves 5% of the GDP to be matched. Those 5% of the GDP (14 Trillion) are some 700 Billion USD. That is exactly the trade deficit of 2008. Any deficit number below (was 500 Billion in 2010) actually indicates a shrinking real economy (by some 2% i would guess). Anything above, that is 2,8 growth forcast for 2011 is created by stimuli, quantitive easing, air in the bubble.
   ZPG only make this result much more obvious.

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