Friday, September 02, 2016

Dear Millennials: If You Want 
To Escape Minimum Wage Debt-Serfdom...
Charles Hugh Smith* offers advice to the millennial generation .. emphasizes how the job market is going towards value-creating .. questions the debt-driven fiscal stimulus on infrastructure being discussed now .. "While we all understand the appeal of this proposal, those proposing it have little experience in actually building or repairing infrastructure. The assumption that such massive public spending will create millions of jobs is never examined closely, nor is the impact of adding trillions of dollars in additional public debt considered. What such schemes boil down to is: Millenials are supposed to borrow trillions from their future earnings and their children's earnings to fund a few years of employment. But what happens after the bridges get repaired and the homeless housing gets built? In the conventional fantasy, the economy magically moves into a self-sustaining growth cycle because those construction workers will be buying more coffee at Starbucks, more lunches at Mickey D's, and so on. But the cold reality is: once the money has been spent, those jobs go away. Once the bridge has been repaired with public money, the workers are laid off because there is no private-sector funding for more bridges or homeless housing, etc. Once the construction workers are laid off, sales at coffee shops and fast-food outlets fall back to pre-stimulus levels. The surge in employment fades as soon as the funding dries up. Additionally, there is little productivity gain from the infrastructure spending: the repaired bridge performs the same service as the aging bridge." .. highlights the value of human, societal & intellectual capital versus tangible capital in today's economy.
LINK HERE to the essay

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