When the Tech bubble burst in 2000, the stock market lost almost as much as in this current mess (the NASDAQ lost more - it never recovered). Investors on the wrong end of that one were left wondering what was accomplished with all the money they handed over to the dotcoms.
Most of the money from the tech bubble was squandered, but one enduring legacy remains. The world was wired. Fiber optics cable was stretched around the globe. Large scale telecommuting, outsourcing office work to India, video on demand, iTunes, youtube, free wireless Internet at your coffeehouse -- all of this came about because in the 90s the world gave over so much of its money to tech companies.
Today's bubble has burst and left us with a glut of American housing and commercial real estate, so much in fact that the price of real estate is in spectacular freefall. Unlike the global fiber optics network, we can't make productive use of all this investment to a degree that we might justify all the madness.
Or can we?
Friends of the Tuna Melter know that some 12 years ago he worked for National Center For Policy Analysis (for one strange but enlightening summer). You think things are grim now, read NCPA's latest study. Tuna Melt's executive summary for you: in about 15 years, we'll be faced with either defaulting on government debt, or defaulting on government's social security and medicare promises.
Our economy is tanking precisely when we need its strongest growth. The demographics of this nation are such that we're soon headed for a time when more people are old and want to be done working than are young and eager to work. The entitlements monster in Washington is only getting hungrier, and we have fewer people feeding it. It's about to break loose and go on a feeding frenzy that will amount to the climactic finale of American prosperity.
Our choices are:
1) slay the monster by renegging on our Social Security and Medicare promises
2) find a new way to feed it.
#1 is the best, but trust me when I tell you with 100% certainty that it will never happen in the lives of you or your children. Entitlements aren't just a by-product of a democratic republic, they are the definition of a democratic republic. Nothing short of an armed, chaotic, bloody upheaval will end entitlements, and even anarchists like me would rather just pay the fucking taxes so we can play with our kids.
#2 might lay in the ruins of our tattered economy.
Cheap, abundant housing, everywhere you look. More houses than people to fill them......
What if America were to loosen up on immigration just a smidge? I know, I know - there are no jobs for immigrants to take. Just ponder it for now. More on this in future posts.
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I think, if I read you right, you are suggesting that we turn all those houses into a bunch of "flop houses" for out of work Americans, managed and maintained by immigrants. They will be federally funded, and very lucrative for the immigrants. This in turn will produce a large tax base which can be used to fund the entire program.
"Ah," you're saying, "but why not get the unemployed Americans to run their own flop houses. They would get paid more, and this would produce an even larger tax base, for a nice tidy solution to the whole mess." True, but what would likely happen instead is that most Americans would put money in flop house stocks. Well, I could go into the whole thing but it wouldn't make sense.
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