Debt

Discussion in 'Business & Economics' started by Mickmeister, Feb 1, 2007.

  1. zanket Human Valued Senior Member

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    3,777
    If a billion people die, it’s not going to happen one day. It may take months, or years. There will be no last day. (Was there a last day for the Mayans? They still live today. Nevertheless, their civilization collapsed.) Some groups of people may still thrive, most likely the rich. Human life will go on and evolve, and civilization will likely go on in some form. Keeping all that in mind, I say The End is happening right now, because current conditions are unsustainable. That means life as we know it, in total, is currently ending. We’ll remain in that phase until life as we then know it becomes sustainable.

    The book Collapse doesn’t predict a collapse for our current civilization. It shows how it is collapsing right now.

    What will be the cost of that oil? It’s clear that burning that oil is going to be much more costly per barrel (in units of standard of living, or “$SOL”) than it was before; that’s why oil from shale is getting close to profitable. (It’s not just because of cheaper extraction.) It’s clear that global warming is going to be included in the cost in the future as well. Then the standard of living that a unit of oil provided in the past is going to be much lower in the future. The demand for oil is increasing exponentially, whereas the supply is dwindling and it’s becoming more expensive in $SOL to extract each new unit, intermediate fluctuations notwithstanding.

    What will be the cost of that wood? Why do you suppose it’s profitable to log underwater forests now, whereas it wasn’t before man covered them? (It’s not just because of cheaper extraction.) It’s clear that the standard of living that a unit of wood provided in the past is going to be much lower in the future. The demand for wood is increasing exponentially, whereas the supply is dwindling and it’s becoming more expensive in $SOL to buy each subsequent unit, intermediate fluctuations notwithstanding.

    The population explosion is already here. The current population is far greater than that which is sustainable in the long run. Birth rates are dropping in developed countries because a child costs more now in $SOL than one did before. A child born 20 years from now will almost certainly cost even more in those units.

    The current trend is obvious: each subsequent unit of resource will cost more in $SOL than the last one, intermediate fluctuations notwithstanding. It wouldn’t matter if half of the Earth’s crust was light sweet crude, or coal, if a unit of it costs a hundred times in $SOL than what it does today. Even if extraction became cheaper, the new costs of global warming may dwarf the savings. Reuse changes the equation, but right now it’s a relatively tiny part of the equation.

    Let's talk about actual data, instead of just making up good news. IMO, ventures to mine the Moon or establish a colony on Mars are for the primary purpose of moving money from taxpayer’s pockets to the wealthy, who own the corporations that will very profitably do the wasteful work. That explains why Bush is all over it. A unit of iron, say, from the Moon would cost some million times what it would cost from the Earth. That’s not going to change anytime soon, and it’s doubtful it will change much before it’s too late. I believe the Earth is our only hope; we either create a sustainable civilization here, or nature makes us pay the price. Talk of space elevators saving us is a sign of the seriousness of our predicament, rather than a real hope.

    Except for the presumed ones from previous collapsed civilizations.
     
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  3. BenTheMan Dr. of Physics, Prof. of Love Valued Senior Member

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    Zanket! Not only are you a GR denier, you are also an end times prophet! Man this is too much!
     
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  5. swivel Sci-Fi Author Valued Senior Member

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    Zanket, I wish I had the stomach for the line-by-line style of debate, but I don't, so I will just touch on a few of the areas in which you are wrong:

    First, the cost of production is indeed going down. There are a combination of factors at work for why shale-oil production is becoming profitable. It is a mix of high prices for crude, and better technology for strip-mining.

    Second, there are more trees in the United States today than there was 100 years ago. There is no shortage. Prices on lumber have dropped over the past 50 years (for all but the most exotic hardwoods and tonewoods). The reason we are now harvesting lumber underwater is because it was only recently possible due to the aquatic robots developed for treasure-hunting.

    Third, the cost of food resources is plummeting, not rising. It has fallen by 1% every year for the past 100+ years. http://eh.net/encyclopedia/article/gardner.agriculture.us We spend much less time during the week working for the wages that sustain us, and more for the wages that entertain us. I don't know how you reconcile this fact with your theory of the world collapsing.

    The global economy helps regular people as much as it helps the rich. Your conspiracy theories are pretty out-there, and I'm not sure what to make of them. The simple fact is that it is better to be lower-class today than a king of any country 400 years ago. Only a loon would swap places with anyone of any era past. Why? Because the world keeps on getting better, and at an amazing rate. And Jeremiads have been saying the things that you are saying for at least the past 2,000 years. And yet it keeps improving around here.

    So what is your evidence besides anecdotal stories, made-up statistics about rates of consumption, and references to bad books? I want something concrete, like the mass starvations of the 50's in Ukraine and Russia, or a headline detailing the fact that the Earth is now officially out of Copper or Aluminium. Anything more than a trend-line, because there are thousands of natural resources, and for every one you can point at for getting more expensive, I can find one that is getting cheaper. This is why investing in stocks is a risky business. If it were as black-and-white as you pretend, we could get rich with puts all day long.

    So please, tell me why civilization is about to go away. Something different than the stories of the past 2,000 years which have all been precisely the same as your dire rant, and all equally untrue.
     
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  7. zanket Human Valued Senior Member

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    3,777
    Only the cost to the consumer (the sum of all the costs + profit) matters. Not only is that cost going up (the price of a barrel of oil shale oil is indirectly indexed to the price of any other barrel of oil), but the cost is far removed from the true full cost. For example, getting oil from oil shale will presumably, as usual, exclude the cost of environmental damage due to strip mining. That cost will be passed on to future generations, who will pay it in one way or another. Strip mining causes many environmental problems besides just an ugly gash. In the book Collapse the author notes that it is now clear that the state of Montana actually gave much more money away than they took in by allowing strip mining, when just some of the environmental costs now being shouldered by the taxpayers are considered.

    The price of sustainable lumber harvesting is rising well beyond inflation. The cheapest lumber comes from unsustainable harvesting; i.e. the raping of forests in third-world countries for a short-term profit, leaving the peasants to deal with mudslides, flooding and other deferred costs.

    Another factor is that the consumer price of lumber, especially sustainable lumber (as the people of first-world countries are increasingly demanding for their own forests) is so high now. And even those robots are artifically cheapened. Boatloads of electronic trash are dumped in China, leaving them and their future generations to deal with the toxic wastes.

    Food is indeed cheaper, but the full cost is not incorporated into it by any means, and its value is decreasing faster than the price. For example, nobody now pays the full cost of the “dead zone” that exists in the Gulf of Mexico due to pesticide run-off from the Mississippi river; that cost is passed on to future generations, who will pay it. Food is being made cheaper by modifying it genetically to build in pesticides, which don’t become healthy just because they’re part of the plant’s DNA. The oceans are being depleted of fish, which is becoming more expensive (in units of $SOL), and environmental costs are deferred there too. Those are just a few of many examples. A food’s true cost (or closer to it) is the significantly higher price of the sustainable organic version. In summary, the cost of food is actually rising (in $SOL) when all the hidden and deferred costs are factored in. We’re living on borrowed time even for food.

    You think that because you, like the majority, don’t consider all the factors. Adopting sustainable living practices, and paying the full price for that, need not be a lower standard of living than we have today.

    What is your evidence that the book is bad?

    Not so. Because of the stock market’s chaotic nature, you don’t know a bubble has popped until its deflation is well underway. The same is often true with the fall of nations.

    I said that civilization is likely to go on in some form. It’s only civilization as we know it, mainly unbridled consumerism with costs deferred to future generations, that nature will forcefully expire. You can already see it happening around the world. For example, New Orleans suffered from Katrina much more than they would have, had not the costs of bayou destruction been deferred. They will pay those costs eventually, restoring the bayou that protects the city from storm surges, or else they will have to accept a lower standard of living in the long run.
     
    Last edited: Feb 10, 2007
  8. TruthSeeker Fancy Virtual Reality Monkey Valued Senior Member

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    Fallacy.
     
  9. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    I doubt all of your numbers. In fact, I have read that because of the current Chinese generous support for education at all levels, for highly selected students*) that US is now experiencing a “reverse brain drain." I.e. China is harvesting its investment. (Many students studying / working in US universities, R&D centers.) The “Chinese brain drain” was favorable, before US’s “war on terror” emigration policy made coming to US harder for all foreign students.
    The well funded Chinese recruitment of highly-qualified, experienced professor is just starting, so perhaps more Chinese science Ph. D.s are becoming professors in the US than are returning to China, still, but that will soon change if it has not already. Do you have any data on the net flux of Chinese science graduates from US university?
    -----------------------
    *99 applicants turned down for each one accepted is not unusual! Some Chinese children of wealthy parents actually come to the US to studyfor a year in US university so they will have a better chance to enter a good Chinese university!
    Your only reference (above) was published in 1998. It is obsolute. NOW grades 1 thru 12 science eduction in China is a model for the US:

    "Faced with an increasingly urgent achievement gap in math and science that may hinder U.S. competitiveness, American educators and policymakers are studying best practices in China and other Asian countries that produce better results.
    ...average math scores for U.S. students trail significantly behind nearly all countries in the Asia Pacific region. Adding urgency to these data are the recently released findings from the National Assessment of Educational Progress ...
    ...The report, Math and Science Education in a Global Age: What the U.S. Can Learn from China, outlines key ways in which China, and East Asia more broadly, have been successful in producing higher student achievement in math and science. These include:

    • National Standards and Aligned Instruction. China has national standards in math and science, which drive coherent textbook content, teacher preparation and professional development. In the United States, there is a great deal of variation in the rigor and quality of standards across educational jurisdictions.
    • Strong Core Curriculum. In China, biology, chemistry, and physics, as well as algebra and geometry are mandatory for completion of high school. In the United States, students are allowed to choose among different levels of learning and can opt out of more advanced courses.
    • Rigorous Teacher Preparation. In China far higher proportions of science and math teachers have degrees in their disciplines than their U.S. counterparts. And specialist science teachers are employed as early as third grade, unlike in the United States where most primary teachers are “generalists” typically responsible for all subjects.
    • Examinations Motivate Students. China’s education system is exam driven. Math and science play a major role in the highly competitive entrance examinations for universities.
    • Time on Task. Chinese schools and learning after school are intensely academically focused. The Chinese school year is a full month longer at the secondary level than American schools and overall Chinese students spend twice as many hours studying as their U.S. peers...."

    From: www.internationaled.org/mathsciencereport.htm
     
    Last edited by a moderator: Feb 11, 2007
  10. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    Hardly! They've been at it since Deng came into power, although the Cultural Revolution pretty much put them back at zero, high-education-wise. It's true that more money has become available lately, but Chinese educational reform/investment has been a big part of CCP policy for almost 30 years now, and probably will be for decades to come.

    No numbers, no. That would be a very difficult statistic to get ahold of, because the situation is very complicated. Even when students do return to China (or wherever), it's often not until 10 years or more after graduating. Moreover, many of them do not simply return never to be heard from again; many go to set up operations on behalf of the US companies that they still work for, and then end up back in the US a few years after that. Bear in mind that much of the tech growth in China is fueled by FDI, much of which is coming from the US. There's no question that there's a lot of growth in the Chinese economy, and so a lot of opportunities to start businesses, and this (along with nationalism, etc.) provides an increased incentive for people to return.

    But let's not get ahead of ourselves: there are also a lot of incentives for foreign students to stay in the US. For one thing, you can make a LOT more money (like 4-5 times as much, adjusted for purchasing power parity, and much more in exchange rate terms). If you want to work on cutting-edge stuff or be a prof at a top-gun research university, the spots are mainly in the US (also Europe and Japan). Even for people who want to do the Chinese jobs for Chinese pay, there are things you just can't get in China. A big house with a big yard for your big family and big dog and big cars. Clean beaches, scenic ski resorts, pristine wildernesses, non-corrupt civil servants, political and religious freedom. Cities with air you can actually see through. People, food, music and art from all corners of the globe. The standard of living is quite simply much higher in the US, and this is a strong incentive.

    Moreover, focusing on the retention rate for Chinese students risks missing the forest for the trees. Even if every single foreign student eventually returned home, the mere fact that they came to America for school and worked for however-many-years in the first place says a lot about America's position in education, technology and industry. When you see top American college grads clamoring to learn Mandarin and study in China, that's when you can start talking about a "reverse brain drain."

    Those changes have mostly been reversed, and foreign enrollment is again increasing:

    http://usinfo.state.gov/mena/Archive/2005/Nov/07-266981.html

    Moreover, the drop in enrollment a few years ago was mostly for students from the Middle East; it didn't have a very big effect on the Asian students. Either way, the foreign visa policy has been rethought, and foreign students continue to come to American universities in ever-larger numbers.

    I don't know about "model," but Chinese education definitely has some features to recommend it. However, that report is looking at the "best practices" in Chinese education, which is not indicative of the education that the masses of China's population are receiving. For starters, gauranteed education in China only covers the primary level (grades 1-9 in the US system), whereas the US also provides free secondary education to everyone. Moreover, there is a big gap in education quality between the more developed coastal regions of China and the various rural sectors; only about half of Chinese children even complete primary education. The rates at which Chinese get through secondary school (i.e., a high-school diploma) are vastly lower than in the US. While the government is working on fixing this (and, indeed, has been for quite some time), the result is a system that produces about the same number of college graduates as America, despite a much larger population. Also, while the math test scores are impressive, it should be emphasized that about the only thing that is taught in Chinese primary school is Chinese and math. While this does result in good math scores, it's questionable as to whether it actually results in a better workforce.

    see here:

    http://en.wikipedia.org/wiki/Education_in_the_People's_Republic_of_China
     
  11. kmguru Staff Member

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    11,757
    I bet, all the people in the capital at that time celebrating how low the unemployment was at the time of collapse. It was probably just like this article: The Federal Job Machine
     
  12. zanket Human Valued Senior Member

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    3,777
    Yeah, the accounting in that article is like in Hitchhiker's Guide to the Galaxy, where bureaucrats marooned on a deserted planet decide that leaves will be their currency, and then each rush off to stuff their clothes with leaves.
     
  13. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    There has only been the program to buy staff and set up “50 MITs” for two years, but we will just need to agree to disagree.

    Anyway, I think China will pass US in less than two decades more because of US collapse than China's 9 to 10% annual growth rates. Here, from C. Schwab's morning news letter for today (16Feb07), is part of why:

    "Housing starts fell 14.3% in January to an annual rate of 1.408 million units, the lowest level in nearly 10 years and well below the Bloomberg estimate of 1.600 million units. Building permits resumed their decline, dropping 2.8% to an annual rate of 1.568 million units, shy of the consensus estimate of 1.590 million units. Permits have now fallen in 11 of the past 12 months. Though weather may have played a role, the dismal showing is dampening hopes that the housing market may be bottoming. ..."

    US economy is based on customer spending which has been (re) financed by taking equity out of homes as real wages have been going down.
    The dollar is dropping. - last night was 1.31 to buy a Euro. It may rise some when Fed raises interest rates (They will need to stem the trend of central banks away from dollars) but soon there will come a point where the opposite effect is produced - Central bankers will understand that the last interest rate rise was dictated by the desperate need to finance the war & growing twin deficits etc. and panic in a run to get out of dollars before the debt is financed by printing press instead of them (the central bankers). Oil has had a dip in cost because of very mild winter, but is now going back up; Ford is going bankrupt, GM soon to follow; Jobs at all levels are leaving the US - anything one can do in front of a computer* or phone. Etc.

    Do not be mislead by stocks at all time highs - if you price them in dollars. If each green dollar were replaced by two lesser value blue ones, harder to counterfit etc., then the stock averages (still expressed in dollars) would also double. - I.e. these stock highs reflect the falling dollar value.
    ----------------------------
    *Ironically the US created the internet to be more secure!
     
    Last edited by a moderator: Feb 16, 2007
  14. Nickelodeon Banned Banned

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    10,581
    Explain?
     
  15. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    Internet was originally called Arpanet (if memory serves me correctly) and made to have no control centers or critical paths so the military could communicate even if many US cities were "taken out" in a full nuclear exchange with the USSR.
     
  16. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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  17. swivel Sci-Fi Author Valued Senior Member

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    Shocker. Thanks for the input quadraphonics. I guess China will have to take over the world without the help of their brightest!
     
  18. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Thanks for the links. Have not read your second yet, but wonder if "world's most severe brain drain" is in absolute numbers (I can believe it true then) or is a percent of Chinese college students.

    As China has been closed society, and is still behind the western world in many technical areas, enormous absolute numbers are going abroad to study. As one of your first reference students notes, it is very competitive to get into good college in China, - having a year of study in west is a big help to getting in back home. Also China joining WTO and is rapidly expanding trade with many different nations, especially in Africa and South America This has greatly increased the need for Chinese with experience of living in foreign lands - best way to get ahead, if without political connections.

    To counter balance your quote, here is one of the ex-patric students (the only one who claims to have read reports on the subject)

    " …Many people in China became rich in the last decade and unlike during previous decades, many can afford to go abroad now. Studying and working abroad is no longer just about fortune hunting, it's about life style.

    If you read some reports on this, you will find that more and more overseas Chinese are continuously going back to contribute to the rapid economic development. China has never been so hungry for educated people and has started a movement to bring them back.

    I think most of the Chinese people who live abroad would like to go back, at some point. The reason they keep on staying is perhaps of a more human nature - for fear of change, fear of losing what they've already got, fear of failure. …" - student Feng Li

    That is in agreement with reports I have read - more are going back every year as material conditions (and new special inducements) are making returning more attractive - especially compared to Mau's cultural revolution days, when intellectuals were persecuted. - Sent to “re-education camps” etc. - Now making a fast buck is China's new creed and yes there is a lot of corruption in a very fluid rapidly changing society - sort of like the US in the era of its peak growth.
     
  19. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    It's measured as the percentage of Chinese who have gone abroad to study (since about 1980, when they started allowing it) but never came back. It turns out that 2/3 of them never returned, which is about as high as it gets.

    It's probably true that larger numbers are returning now than in the past, but in the past only a very small number returned. The net result is that the percentage of Chinese who study abroad that do not return is still among the highest in the world. Also note that US immigration policies, to the extent that they discouraged Chinese students from coming here, didn't result in them staying in China. Instead, they went to Canada, Australia and Europe.
     
  20. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    to quadraphonics:

    I think we agree on this namely:

    (1) That in the 1980s if you were Chinese and could get into US university you were unlikely to return home.

    (2) That in the 1990s if you were Chinese and could get into US university you were still more like to take the better pay abroad than to return home, but were beginning to think seriously about going back someday, "when things were better".

    (3) That in the 2000s if you were Chinese and could get into US university you were more likely to return home within a decade after gradation than to stay in US.

    (4) That in the 2010s if you were Chinese and could get into US university you were unlikely to do so for more than a year or two - perhaps mainly to make it more likely to get accepted by one of China's 50 new "MIT or better" university centers or to be more likely to advance to higher professional levels, especially in international commerce, when you returned home.

    Admittedly (4) is entirely speculative and (3) is partially so - but that is the clear trend.
     
    Last edited by a moderator: Feb 23, 2007
  21. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    Okay, although I'd add that "when things were better" refers not only to economic development but also to the political situation. Tianenmen Square probably has as much to do with rates of return as economic factors.

    I don't know about more likely to return than to stay. More likely to return than in the past, probably, but I have yet to see any numbers suggesting that a majority of newer students are returning. In any case, the whole "within a decade" clause puts this figure out into the 2000-teens, so in the meantime there's nothing but anecdote to support this kind of speculation.

    Possible, although the probability that China will produce 50 engineering schools that are better than MIT within the next ten years is pretty much zero. It would take at least 100 years to do something like that, and even then the prospects are not good. Most countries would be thrilled to have a single university that could beat MIT, so the idea of a single country (which currently has only a couple of schools in the top 500) could produce 50 is extremely far-fetched.

    But anyway, it is the case that the brain drain in more developed countries tends to be much lower than that of China, and so we'd expect that, as China developes, more and more students will return. This is normal, and it doesn't require China to surpass the US in terms of economy or education. That said, many developed countries with excellent educational systems continue to experience long-standing brain-drains to the US. For example, Canada and many European countries. There are many issues besides the levels of development that drive human capital migration, such as levels of taxation and opportunities. For example, many Scandanvians move to the US to work, and thereby avoid the enormous income taxes. Likewise, business taxes are lower in the US than in much of Europe, which motivates enterprising scientists and engineers to come here to start companies.
     
  22. swivel Sci-Fi Author Valued Senior Member

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    2,494
    This is why Ireland is becoming the new country to watch. They are doing brilliant things to lure in talent and capital, and it is quietly becoming one of the top countries to live in as a result.
     

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