Lets make fun of Obama while he is still relevant.

[playwrite]

(12-06-2016, 12:59 AM)Warren Dew Wrote:

(12-05-2016, 06:38 PM)Mikebert Wrote:

(12-04-2016, 05:15 PM)Warren Dew Wrote:

(12-04-2016, 10:27 AM)Mikebert Wrote: Warren, I do not understand why you seem to want a much bigger federal debt/GDP ratio. 

If you want to understand, please first reread my post on how it has worked in Japan, including the two links to my livejournal.

Here’s the problem with your analysis:

"However, economic output is limited by the falling proportion of the population still working, so the average living standard the economy can sustain for the population as a whole cannot keep up."

This is nonsense. GDP per worker has been rising for 200 years in America and for more than a century in Japan.  It’s called the industrial revolution.  If there were a retiree population that was receiving a fixed output with a shrinking working population then this would constitute rising economic demand per worker, which translates to rising GDP per worker.  GDP is simply another term for the net sales of the collective firms in the economy.  This is why they call GDP construction “national accounting”.  You are a frickin’ engineer, do the mass balance! Didn’t they teach you in school to first write down the mass and energy balances, then solve the problem?

I went to MIT; I do the equations and inequalities in my head.  But sure, I can write them down for you, if that helps you understand the point:

d(GDP/worker)/dt / (GDP/worker) > 0 (percentage individual worker productivity increases)

d(workers)/dt / workers < - d(GDP/worker)/dt / (GDP/worker)
    (percentage worker population decreases faster than percentage worker productivity increases)

d(GDP)/dt / GDP = d(workers*GDP/worker)/dt / (workers*GDP/worker)
    = (GDP/worker * d(workers)/dt + workers * d(GDP/worker)/dt) / (workers*GDP/worker)
    = d(workers)dt / workers + d(GDP/worker)/dt / GDP/worker < 0 (GDP decreases)

d(population)/dt / population > 0 (percentage population increases as old people have retired but not died yet)

d(GDP/population)/dt = population * d(GDP)/dt + GDP * d(population)/dt
    = population * GDP * (d(GDP)/dt / GDP - d(population)/dt / population) < 0
    (average living standard for the economy cannot keep up)

Just remember from your calculus that d(a*b)/dt = b*da/dt + a*db/dt and you should be all right here.

This has been the macro situation in Japan since 1995: the employed population is falling proportionately faster than the productivity of those workers is rising, so GDP is falling, but still needs to support a rising population.

Their population now seems to have peaked out, so things should at least not continue to get worse for them.

This is the kind of horseshit math papering-over of pure conjecture that took neoClassical economics, particularly the Chicago School, into irrelevancy.  You, being from MIT, have been caution against this ad naseum but for some reason it obviously didn't take.

Your second equation is an assumption that, as Mike pointed out, goes against history, and that is a history that will be now compounded by automation.  psss, the Luddite Fallacy is situational.