VP Debate

[Res Ipsa]

Every year that I'm alive, the US economy gets a year's worth of output from me, but more importantly it gets a year's worth of spending (which fuels other people's earnings)

I'm not sure I buy into supply side economics to that extent. You have to account for the fact that dead people don't consume anything, not just that they don't produce anything. How many of us consume less than we earn?

That's not "supply side economics." What Steuss is describing has nothing to do with wages. Oversimplified, GDP -- the measure of increase in the United States wealth is the total value of goods and services created or performed during the year. So, take your profession as an optometrist. If you die, you stop performing the optometry services you've been providing. That's a reduction of GDP. Now suppose you're just fine, but all of your patients drop dead. That's a bunch of services you don't get to perform. That's also a reduction in GDP.

You can do the same with goods. A company that makes widgets has all its workers drop dead. It will produce fewer widgets than it otherwise would have, which is a reduction of GDP. But also, if the company is fine but all its customers drop dead, it will cut back production and produce fewer widgets.

You're used to thinking of consumers who don't work as parasites. But, economically, they contribute to GDP by allowing producers of goods to make more goods for sale and providers of services to provide more services.

That's why you have to account for direct effects on producers and the indirect effect of loss customers on the same producers.

Now, assume that 20 million Americans suddenly drop dead. Not only do you have reduced GDP from the direct effects of the deaths for the loss of business owners and employees, the same businesses get hit a second time by the loss of customers. The economic loss to the US would be enormous.

That's Trump's deportation plan.

[ajax18]

I'm not sure I buy into supply side economics to that extent. You have to account for the fact that dead people don't consume anything, not just that they don't produce anything. How many of us consume less than we earn?

Exactly, dead people don't consume anything. Which means that's one less person (or a million + less) to produce for. Healthcare, food, textiles, gasoline, durable goods, etc. You remove a person's consumption, and you also remove the manhours needed to produce, service, transport, maintain, etc., that person's consumption.

If death had a null economic impact, population collapse wouldn't be the economic boogey man that it is.

When you remove workers and consumers, there are measurable impacts. Since you like to use Florida a lot, what has happened there economically in its agricultural and construction industries each time it has tried to remove just a fraction of its workforce? Do you think inflation on agriculture isn't impacted when billions of dollars of food literally rots in fields because it can't be harvested?

When you remove a person from an economy, there's an impact. In the case of death, you aren't just removing their productivity (assuming they are working age), you are also removing their consumption, which is a one-two-punch for an economic system.

But if it's an old person who isn't working or producing anything, than how is that death not a net positive for the economy? Economy is about consuming less, not just producing more. If this weren't true, than in theory we could literally do no work at all and just consume and never run out of money. We could all get on unemployment forever. It wouldn't work.

[Res Ipsa]

Exactly, dead people don't consume anything. Which means that's one less person (or a million + less) to produce for. Healthcare, food, textiles, gasoline, durable goods, etc. You remove a person's consumption, and you also remove the manhours needed to produce, service, transport, maintain, etc., that person's consumption.

If death had a null economic impact, population collapse wouldn't be the economic boogey man that it is.

When you remove workers and consumers, there are measurable impacts. Since you like to use Florida a lot, what has happened there economically in its agricultural and construction industries each time it has tried to remove just a fraction of its workforce? Do you think inflation on agriculture isn't impacted when billions of dollars of food literally rots in fields because it can't be harvested?

When you remove a person from an economy, there's an impact. In the case of death, you aren't just removing their productivity (assuming they are working age), you are also removing their consumption, which is a one-two-punch for an economic system.

But if it's an old person who isn't working or producing anything, than how is that death not a net positive for the economy? Economy is about consuming less, not just producing more. If this weren't true, than in theory we could literally do no work at all and just consume and never run out of money. We could all get on unemployment forever. It wouldn't work.

The economy doesn't work like you think it does, and you aren't alone. You have to think marginally, which isn't instinctive for most people. Your economy starts from no economy at all and adds only consumers. Of course that doesn't work. But that's not where are -- we have a functioning economy. Remember, what I've said is that killing off producers (whether owners or employees) is a reduction in GDP and so is killing off consumers. So, start from we and assume that everyone stops consuming. It's exactly the same result. There is no one to buy anything, which will cause the producers to stop producing. (that's why killing consumers is an indirect effect on production.

We are all consumers. Some consumers are also producers. But it simply false that producers add to the economy while consumers subtract from it. Babies add to the economy because they consume products produced by formula manufacturers and car seat manufacturers and clothing manufacturers. They add to the economy because the consume health care services. Stay at home moms and dads add to the economy because they buy food and clothing, etc.

Your protestant work ethic is leading you to draw completely wrong conclusions about how the economy actually works.

[Doctor Steuss]

But if it's an old person who isn't working or producing anything, than how is that death not a net positive for the economy?

Because they consume. They have homes, pensions, SS, bills, vacations, grandkids to buy presents for, etc. Just using my parents, they both have retirement accounts. My dad doesn't receive SS because of the industry he worked in. He had to pay into SS, but he isn't allowed to draw from it. He receives a pension instead, and had a 401K he paid into as well. My mom also had a 401k from her job that she paid into. If they died tomorrow, those funds would be disbursed to each of their kids. The economic demand and output of their spending would disappear. We wouldn't' somehow magically consume more. We'd probably all pay down some debt, and possibly splurge on a multi-family vacation or something like that so all of the grandkids could get together.

At least a decade of economic demand from two people would be gone. The gas that my dad uses getting to church and the temple. The gas my mom spends driving across town to take care of my nieces and nephew. The repairs and maintenance on their three vehicles. The food they eat. They just bought two new AC units for their house. That's almost $20K of economic output of a durable good. My dad just bought a new truck about 2 years ago. They go on vacations, they buy gifts for their grandkids, they have hobbies (my mom just published her third volume of a massive family history project). This doesn't even begin to get into the various massive industries that exist solely for the purpose of elderly people in society.

Economy is about consuming less, not just producing more.

This literally makes no sense. If consumption goes down, demand and production goes down too. There's absolutely no reason to produce more if it's not consumed, beyond just being insane.

If this weren't true, than in theory we could literally do no work at all and just consume and never run out of money. We could all get on unemployment forever. It wouldn't work.

I have no idea how you've gotten so far lost in the weeds here, or how to bring you back out.

[canpakes]

But if it's an old person who isn't working or producing anything, than how is that death not a net positive for the economy?

Because they consume.

At its most over-simplified, their consumption makes them ‘job creators’, if that helps any.

[Doctor CamNC4Me]

iMaGiNe If We ELiMiNaTeD dEMaNd By SiMpLy KiLLiNg PeOpLe

[Res Ipsa]

But if it's an old person who isn't working or producing anything, than how is that death not a net positive for the economy?

Because they consume. They have homes, pensions, SS, bills, vacations, grandkids to buy presents for, etc. Just using my parents, they both have retirement accounts. My dad doesn't receive SS because of the industry he worked in. He had to pay into SS, but he isn't allowed to draw from it. He receives a pension instead, and had a 401K he paid into as well. My mom also had a 401k from her job that she paid into. If they died tomorrow, those funds would be disbursed to each of their kids. The economic demand and output of their spending would disappear. We wouldn't' somehow magically consume more. We'd probably all pay down some debt, and possibly splurge on a multi-family vacation or something like that so all of the grandkids could get together.

At least a decade of economic demand from two people would be gone. The gas that my dad uses getting to church and the temple. The gas my mom spends driving across town to take care of my nieces and nephew. The repairs and maintenance on their three vehicles. The food they eat. They just bought two new AC units for their house. That's almost $20K of economic output of a durable good. My dad just bought a new truck about 2 years ago. They go on vacations, they buy gifts for their grandkids, they have hobbies (my mom just published her third volume of a massive family history project). This doesn't even begin to get into the various massive industries that exist solely for the purpose of elderly people in society.

Economy is about consuming less, not just producing more.

This literally makes no sense. If consumption goes down, demand and production goes down too. There's absolutely no reason to produce more if it's not consumed, beyond just being insane.

If this weren't true, than in theory we could literally do no work at all and just consume and never run out of money. We could all get on unemployment forever. It wouldn't work.

I have no idea how you've gotten so far lost in the weeds here, or how to bring you back out.

I think that how a country's wealth is measured is counterintuitive for most people. As an individual, I can think of my wealth as my savings account. When I produce (i.e., work), my bank account gets bigger and my wealth increases. When I consume, my bank account gets smaller, and I lose wealth. So, producing has value and consuming has negative value. I suspect that it's exactly that kind of reasoning that leads Ajax (and others) to think that retired folks are leeches that don't contribute to the economy.

Analogizing personal finances to the strength of the economy doesn't work for at least two reasons. First, GDP doesn't measure a stock of wealth. It is a measure of how much economic benefit is being added to the nation as a whole over time. It's a flow, not a stock. Second, how that increase is distributed among Americans and what they do with it is a separate question that GDP doesn't answer. GDP measures how the economic engine that provides us all with benefits in the form of goods and services is doing.

Second, and producing and consuming by an individual can be completely independent and does not account for the effect the individual has on other producers and consumers. Measuring the strength of the nation's economic engine and figuring out the effect of changes requires accounting for the effect of individual production and consumption on the production and consumption of others. That's why analogizing individualizing finances to the national economy is almost certain to be misleading. It won't account for the effect individual decision on others.

[ajax18]

But if it's an old person who isn't working or producing anything, than how is that death not a net positive for the economy?

Because they consume. They have homes, pensions, SS, bills, vacations, grandkids to buy presents for, etc. Just using my parents, they both have retirement accounts. My dad doesn't receive SS because of the industry he worked in. He had to pay into SS, but he isn't allowed to draw from it. He receives a pension instead, and had a 401K he paid into as well. My mom also had a 401k from her job that she paid into. If they died tomorrow, those funds would be disbursed to each of their kids. The economic demand and output of their spending would disappear. We wouldn't' somehow magically consume more. We'd probably all pay down some debt, and possibly splurge on a multi-family vacation or something like that so all of the grandkids could get together.

At least a decade of economic demand from two people would be gone. The gas that my dad uses getting to church and the temple. The gas my mom spends driving across town to take care of my nieces and nephew. The repairs and maintenance on their three vehicles. The food they eat. They just bought two new AC units for their house. That's almost $20K of economic output of a durable good. My dad just bought a new truck about 2 years ago. They go on vacations, they buy gifts for their grandkids, they have hobbies (my mom just published her third volume of a massive family history project). This doesn't even begin to get into the various massive industries that exist solely for the purpose of elderly people in society.

Economy is about consuming less, not just producing more.

This literally makes no sense. If consumption goes down, demand and production goes down too. There's absolutely no reason to produce more if it's not consumed, beyond just being insane.

If this weren't true, than in theory we could literally do no work at all and just consume and never run out of money. We could all get on unemployment forever. It wouldn't work.

I have no idea how you've gotten so far lost in the weeds here, or how to bring you back out.

We kept consuming during COVID without working. We printed money and hence had more dollars chasing fewer goods available. As a nation, that lead to inflation, then higher interest rates. It doesn't seem like consumption based economies work for nations any better than they do for individuals.

And yes you would spend or at least invest your inheritance Dr. Seuss. If money isn't spent on one thing it will be spent on another. The only question is who gets paid first. My Grandad refused cancer treatment when he was 76 yoa because he knew it wouldn't help much and would cost everything he'd worked for and managed to save his entire life to build his legacy. He made everyone else's life better with that decision every bit as much as he did with a lifetime of labor.