Re: NEWS: Ageing recession warning

From: Mike Lorrey (
Date: Thu Aug 30 2001 - 12:53:25 MDT

Randy Smith wrote:
> The term "recession" measures the health of a country when it is treated as
> a business. But what has that to do with the wellbeing of the *citizens* of
> the country? Let's look at what should be the perfectly obvious example:
> suppose all citizens of Japan were retired, having saved enough money to be
> financially independent. No one at all would be working: the GDP would
> approach ZERO...the media would be screaming about it. But the *owners* of
> the country, its retired citizens, are doing just great. I really hope this
> example brought home for you just how very disconnected from reality media
> economic reporting really is.

This is not accurate. Earnings on investments are 'product' that is
counted. The problem with systems like Japan's (and other country's)
welfare systems is that they are not interest bearing instruments, they
are Ponzi schemes. If Japan had zero workers, all retirees, no retirees
would be getting any money from their social security system and GDP
would be zero, but those with pensions that are vested in automated
industrial output would be making money, and producing 'domestic

Under a retirement system whose funding is entirely tied to industrial
output and profitability, not to siphoning the earnings of current
workers, the optimum situation with maximum GDP would be to have no
workers, because all capital normally spent on training and maintaining
workers (thus an expense) is instead channeled into production of more
productive automation, thus earning more profits for the stockholders.

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