What's Next?

 WHAT'S NEXT?

Google tells me our national debt is $38,000,000,000,000 and counting.  Household debt is $18,400.000.000,000.  Business debt is estimated at $22,000,000,000,000.  And, an important footnote, 42,000,000,000 people utilize food stamps to eat.  A very modest, new house will cost you $350,000 most of which you will borrow.

It would seem to me that there will be an end point.  There will be a 'next'.  What will our 'next' be?  Whatever it will be, it will not be pleasant.  This is a certainty.  Maybe we should take a poll to see if the general public has any thoughts on what the 'next' will be and even more importantly, how to avoid it or deal with it when it gets here.  

Now let's add to this little scenario algorithms and AI.  Capitalism, the Industrial Revolution, has been consistent - - technology replaces humans.  It has been this way from the beginning.  The owners of productive enterprises will replace as many actual workers as algorithms and AI allows them to. Algorithms make decisions, AI tells you what you want to hear, and neither ask for raises, call in sick, or need a day off to take care of personal matters.  They will replace you.

The problem with all this is that a person, you, needs an income to pay your mortgage, your car loan, your credit card debt.  As you can see from the first paragraph, there is a whole lot of debt.  The creditors, the people who own this debt, depend on you, the debtor, to pay back what you owe.  The investors who have bought this debt will now be traumatized in turn  when it is not paid.  Many of these investors  have borrowed money themselves to buy your debt in vast swirls of various financial instruments all depending on you, the guy who borrowed $50,000 to buy a $70,000 pick up truck or $300,000 to buy a $350,000 dollar house made from clapboard. You didn't realize did you, you, the small time consumer of things you don't need, are possibly the most important part of the whole process.  The problem starts with you, you who suddenly has no money and no way to get any.

An economic collapse is not a pretty thing.  It has happened in the past and it will happen again. 1929 brought the whole thing down - - four more years to the hundredth anniversary. The history of the Great Depression should be revisited, unless of course our current legislature has banned the subject so as not to pollute the minds of our youth with things unpleasant.  After all, our students are being trained for jobs that won't exist in five years; why would they want to know about their future unemployment?  It certainly qualifies as an unpleasant thing to think about.

Richard E. H. Phelps II

Mingo