[FoRK] [fhapgood@pobox.com: [nsg] Meeting Announcement]

Stephen D. Williams sdw
Sun Jul 17 10:48:15 PDT 2005

I find this chain of logic interestingly short-sighted for a 
nanotechnology study group.  I don't disagree with the premise from an 
economic point of view, but some serious success in nanotechnology, or 
power or medicine, will likely change the economic equation drastically 
in the next 20 years.  While certain services will remain expensive, 
efficiency and featureful breakthroughs could change many key parts of 
the equation, including food, comfort, housing, transportation, and 

It's not inevitable; breakthroughs of the last 40 years have had large 
impacts but haven't turned the economy inside out or anything for the 
most part, but it's something that we should account for as a possibility.


Eugen Leitl wrote:

>----- Forwarded message from Fred Hapgood <fhapgood at pobox.com> -----
>From: Fred Hapgood <fhapgood at pobox.com>
>Date: Sun, 17 Jul 2005 11:27:41 -0400
>To: Nanotech Study Group <nsg at polymathy.org>
>Subject: [nsg] Meeting Announcement
>X-Mailer: MIME::Lite 1.5  (F2.73; T1.001; A1.64; B3.05; Q3.03)
>Meeting notice: The July 19 meeting will be held at 7:30 P.M. at the
>Royal East (782 Main St., Cambridge), a block down from the corner of
>Main St. and Mass Ave.  If you're new and can't recognize us, ask the
>manager. He'll probably know where we are. More details below.
>Suggested topic:  The Generational Storm
>I've been reading the best-selling The Coming Generational Storm, by BU
>professor Lawrence Kotlikoff and Scott Burns.
>The core thesis is probably familiar to you -- that the boomer
>generation is screwing its children by 1) voting themselves immensely
>expensive services, 2) the bill for which will only come due after they
>are retired and therefore safe from the tax man, 3) while at the same
>time restricting childbirth, and therefore the number of contributors 
>capable of shouldering, and sharing, the load. Nobody was looking
>explicitly for ways of causing the most possible pain per person, but
>they might as well have been.
>K. estimates the shortfall -- the size of the check being skipped out on
>-- at around $50 trillion, though was last year (the number gets
>bigger every year nothing is done).  $50 trillion is about five times
>the size of the economy.
>It's interesting to read this from a nanotech perspective.  On the one
>hand we tend to be far more impressed by the chaos of everyday life than
>the BU professor is.  For K., 2030 is tomorrow and even 2080 is
>something to worry about.  He is contemptuous of social security
>scenarios for looking only 75 years out, for instance.  On the other,
>the members of this group probably expect life expectancy at 65 to crank
>up a lot faster than the Congressional Budget Office (K's source) does.
>All in all the $50 trillion dollar bugout seems to be one of those
>problems nanotech will make worse. (K. points out that productivity is
>linked to wages and at least in the case of SS, wages are linked to
>benefits, which adds up to another way in which technological change
>drives entitlement costs.)
>If you buy the argument as developed to this point there are only three
>possible outcomes -- and by "outcomes" I do not mean solutions.
>The first, cutting benefits, is obviously not going to happen.  So
>forget that.
>The second is raising taxes.  Perhaps the most useful single thing in
>this book is K's demonstration that taxes are really much higher than we
>think they are.  When the IRS tells you are paying at a rate of 30% or
>whatever they are calculating across the base as a whole, as if they got
>30% out of your first dollar. But if you make, say, $50,000 a year, the
>first $15,000 is tax free (in the sense that if that was all you made
>you wouldn't have to pay anything) and you don't pay a whole lot more on
>next $15,000 (if you were only making $30K your taxes  would be
>It's the final $20K, the marginal dollar, that takes the hit.  Here are
>some real numbers:
>1st column: Household  income   
>2nd column: net marginal tax rate (net means govt. benefits are
>$21K           72%
>$42K           66%
>$64K           63%  
>$85K           59%
>... and the numbers really don't ever get much lower than that.  (The
>72% and 66% in second column reflect the loss of means- tested 
>government services rather than actual taxes.)
>So while K. is sure taxes are going to go up, he is equally sure they're
>not rising anywhere close to the point of handling a $50 trillion debt.
>Try it and people will stop working in droves, because people basically
>would just as soon not work for free.
>That leaves only the debtor's friend, inflation, and K. expects a lot of
>it for a long time. 
>Of course the clash of generations is going to be even worse in the many
>countries that boast both longer life expectancies and more rapidly
>populations.  I was just a tiny bit surprised that K. didn't speculate a
>about the reaction of countries like these to seeing themselves shrink
>after year after year. Myself, I bet they won't like it. I bet it will
>them blue.  I bet lots of people, and especially lots of politicians, in
>shrinking nations are going to think that boosting tax breaks per kid is
>a much
>better use of the social dollar than giving it to infertile old people.
>We aren't really seeing much of this now but I think we will, and when
>we do, the "clash of generations" will get perfectly explicit.
>In twenty years half the population of Europe will have visited the
>                                -- Jules Verne, 1865
>Announcement Archive: http://www.pobox.com/~fhapgood/nsgpage.html.
>"NSG" expands to Nanotechnology Study Group.  The Group meets on the
>first and third Tuesdays of each month at the above address, which
>refers to a restaurant located in Cambridge, Massachusetts.
>The NSG mailing list carries announcements of these meetings and little
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>  www.pobox.com/~fhapgood
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Stephen D. Williams 703-724-0118W 703-995-0407Fax 20147-4622 AIM: sdw

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