Saturday, September 13, 2014

Average is Ever (6) Stark Vision

In Average is Over, Tyler Cowen gives this summary of the new social contract that will emerge in response to permanently declining incomes.

The American polity is unlikely to collapse, but we'll look back on the immediate post war era as a very special time. Our future will bring more wealth people than ever before, but also more poor people, including people who do not always have access to basic public services. Rather than balancing our budget with higher taxes or lower benefits, we will all the real wages of workers to fall and thus we will allow the creation of a new underclass. We won’t really see how we could stop that. Yet it will be and oddly peaceful time, with general aging of Americans society and the proliferation of many sources of cheap fun (258).
I hope that Tyler Cowen is wrong. He brings a terrible vision of the future. I hope that the gospel beats him to it.

Tyler Cowan makes one prediction that I like. He suggests that as the ability of the government to collect taxes declines. people will become more dependent of local communities.

Americans will look more towards local communities and tight local bonds, to protect themselves against economic risks. Unlike the predicted breakdown in social order, these trends are already significant and observable in today’s America (258).

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