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Old October 9th, 2017, 08:30 AM   #1
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Why is the economy broken ?


For most of human history there were shortages of even the most basic of necessities starting with food.....

Then in the 1950s or so we entered the era of plenty.

And now we have a weird situation:

On one hand there are many unfulfilled needs (infrastructure, security, etc..)
On the other hand we have the capability to produce more than enough to fulfill these needs
And at the same time we have large numbers of unemployed and poor (a recent EU study claims that a quarter of EU citizens are either poor or at severe risk of becoming poor)

So we have the means, we have the needs, we have the workforce and yet somehow we cant make it work....or at least we cant make it work for a significant number of people

Why ?
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Old October 9th, 2017, 08:38 AM   #2

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Quote:
Originally Posted by tomar View Post
For most of human history there were shortages of even the most basic of necessities starting with food.....

Then in the 1950s or so we entered the era of plenty.

And now we have a weird situation:

On one hand there are many unfulfilled needs (infrastructure, security, etc..)
On the other hand we have the capability to produce more than enough to fulfill these needs
And at the same time we have large numbers of unemployed and poor (a recent EU study claims that a quarter of EU citizens are either poor or at severe risk of becoming poor)

So we have the means, we have the needs, we have the workforce and yet somehow we cant make it work....or at least we cant make it work for a significant number of people

Why ?
Selfishness, greed, apathy, tribalism. And the numbers game again --if it starts to burn your posterior, then you are galvanized to action. Like stars who dedicate their $ and lives to combat a disease when their own child dies from it.
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Old October 9th, 2017, 08:46 AM   #3

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Probably absence of planning ( I don't mean Stalinist-type economy of course ).
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Old October 9th, 2017, 09:00 AM   #4

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Originally Posted by holoow View Post
Probably absence of planning ( I don't mean Stalinist-type economy of course ).
We've gone with the totally absurd "trickle down" theory of looting, and it has concentrated the wealth at the top, in America. Everyone goes ape-poop when anyone mentions Socialism, even though some of the happiest countries in the world are Socialist. What part of tax breaks for the middle class don't folks get?? For the love of Snoopy? Middle class has disposable income to increase sales for businesses so that they can expand, and also helps working class up the ladder. It is the engine that drives the country forward.


From: https://www.cnbc.com/2017/03/20/norw...ts-sadder.html
  1. Norway (7.53)
  2. Denmark (7.52)
  3. Iceland (7.50)
  4. Switzerland (7.49)
  5. Finland (7.46)
  6. Netherlands (7.37)
  7. Canada (7.31)
  8. New Zealand (7.31)
  9. Australia (7.28)
  10. Sweden (7.28)
  11. Israel (7.21)
  12. Costa Rica (7.07)
  13. Austria (7.0)
  14. U.S. (6.99)
  15. Ireland (6.97)
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Old October 9th, 2017, 09:02 AM   #5

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I assume that you are addressing Europe's economy, since you reference the EU. For one, technology is replacing many menial and even blue collar jobs. Also, one has to wonder if a benefit driven society discourages some from working. How are the paid benefits, unemployment compensation, medical benefits and even welfare benefits in the EU? Don't forget, in the early 1950s there was a great deal of wok to be done in much of Europe, a great deal of which was subsidized by the U.S.: https://en.wikipedia.org/wiki/Marshall_Plan. Furthermore, half of Europe was behind the Iron curtain, with a very meager standard of living. Today, these countries compete with western Europe economically.
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Old October 9th, 2017, 09:04 AM   #6

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Quote:
Originally Posted by Todd Feinman View Post
We've gone with the totally absurd "trickle down" theory of looting, and it has concentrated the wealth at the top, in America. Everyone goes ape-poop when anyone mentions Socialism, even though some of the happiest countries in the world are Socialist. What part of tax breaks for the middle class don't folks get?? For the love of Snoopy? Middle class has disposable income to increase sales for businesses so that they can expand, and also helps working class up the ladder. It is the engine that drives the country forward.


From: https://www.cnbc.com/2017/03/20/norw...ts-sadder.html
  1. Norway (7.53)
  2. Denmark (7.52)
  3. Iceland (7.50)
  4. Switzerland (7.49)
  5. Finland (7.46)
  6. Netherlands (7.37)
  7. Canada (7.31)
  8. New Zealand (7.31)
  9. Australia (7.28)
  10. Sweden (7.28)
  11. Israel (7.21)
  12. Costa Rica (7.07)
  13. Austria (7.0)
  14. U.S. (6.99)
  15. Ireland (6.97)
Small nations with a much smaller underclass to subsidize. The largest is Canada. The others are under 10 million, less than the state in which I reside. Iceland has 330,000 residents, less than most counties in the U.S. Norway is awash in petrol.

Last edited by Rodger; October 9th, 2017 at 09:08 AM.
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Old October 9th, 2017, 09:05 AM   #7

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Because the market is inefficient.

In theory, the market results in the most efficient allocation of resources, but that only works when taking a very narrow viewpoint. The market does not operate on perfect knowledge. The profit-seeking enterprise will not willingly give up profit in order to, for example, provide greater benefits elsewhere,

Example - cricket. Once a national sport, cricket was taken off free-to-air TV, as Sky Sports paid a huge amount for the TV rights. That gave broadcasters and sportsmen more money, but it meant that no one could watch it being played unless they paid for the sports channel.

Now, cricket has lost its prominence as a nationak sport. Crowds at county games are non-existent, and the sport is less popular than it has ever been. Test cricket, the longest form of the game, is in severe danger of dying, all in the search for short term profit, because no one either sees or cares about the long term return.
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Old October 9th, 2017, 09:08 AM   #8

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Quote:
Originally Posted by Rodger View Post
Small nations with a much smaller underclass to subsidize. Norway is awash in petrol.
Norway didn't squander its oil wealth when it had it. North Sea oil has sharply contracted in recent years, but unlike the UK, Norway invested the revenue it got from oil, resulting in one of the largest sovereign wealth funds in the world and an ongoing income stream.

The UK used the revenue to pay off its current spending. Once the revenues were gone, there was nothing to replace it.
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Old October 9th, 2017, 09:12 AM   #9

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Quote:
Originally Posted by Naomasa298 View Post
Norway didn't squander its oil wealth when it had it. North Sea oil has sharply contracted in recent years, but unlike the UK, Norway invested the revenue it got from oil, resulting in one of the largest sovereign wealth funds in the world and an ongoing income stream.

The UK used the revenue to pay off its current spending. Once the revenues were gone, there was nothing to replace it.
So Norway did not have the same spending/debt as the U.K. I assume?
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Old October 9th, 2017, 09:17 AM   #10

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Quote:
Originally Posted by Rodger View Post
So Norway did not have the same spending/debt as the U.K. I assume?
It chose not to use its revenue to massively expand the welfare state at the expense of investment.
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