Our economic future? Look at Japan, economist says

Sunday, Dec. 2, 2012 11:10 AM
Last updated Monday, Dec. 3, 2012 1:05 AM
  • Follow Business

ATHENS, Ga. -- If the recent elections are any indication, there’s a gorilla in the room that neither donkeys nor elephants want to tussle with.

In somewhat pejorative terms, that gorilla’s name is Entitlement.

That was the message from Rod Kiewiet, a political science professor at the California Institute of Technology, at the “Effects of the 2012 Elections” symposium hosted at the University of Georgia Friday and hosted by the School of Public and International Affairs.

“The latest election was just the latest in an inter-generational skirmish,” he said.

And if you’re older than 60, “you won. Again. You’re undefeated,” he said.

That victory comes at the expense of those under the age of 45, who are going to need to pay for the entitlements of healthcare and Social Security and keep the economy vibrant and innovative at the same time.

His presentation notes that in 1950, there were 16 workers for every five beneficiaries. By 2050, he expects that ratio to be closer to 2:1, with it peaking at 2:2 in 2020.

“The culprit is people like me, who don’t have enough offspring, and we live too long,” he said.

The 2012 elections, particularly at the presidential level, offered an opportunity to tackle that issue through meaningful changes to how those programs operate, he said. Republican candidate Gov. Mitt Romney offered what was “small, and I believe to be, utterly inadequate change.” But it was still more than what Kiewiet thinks Democratic incumbent President Barack Obama offered: virtually no change.

Changes to the benefits and potentially painful increases in how much workers pay into the programs will save them, Kiewiet said. Otherwise, he said Japan’s persistent economic stagnation is about the best the U.S. can hope to achieve.

“It’s pretty clear that countries with an aging population have very little opportunity for growth,” Kiewiet said. “Hopefully, we will go the route of Japan: An incredibly stagnant economy, very little investment and very little opportunity for young people to enter the workforce.”

He joked that the best thing that could be said for Japan is “they’ve kept the public order.”

That country’s economic issues have also been exasperated by its staunch opposition to any immigration, he said.

He was one of four political scientists to present at the morning session and none bore great news. One even joked their session should have been held closer to the cocktail hour, given the dour topics.

Brian Schaffner, a political science professor at the University of Massachusetts, Amherst, presented the partisan divide on the seemingly empirically judged health of the economy.

On the heels of October’s national employment report, where unemployment dipped below 8 percent for the first time in about four years, he noted a liberal-conservative split on whether or not unemployment had increased or decreased, particularly after conservative media started questioning the validity of the report.

“Even the state of the economy, the economic conditions, becomes a contestable partisan issue,” he said.

And it’s not just those that lean conservative, he said.

When a report of poor job numbers came out in May, very few Democrats were willing to say the it was “very negative.”

“There really were two economies,” he said. “The Democrats had one view of the economy and the Republicans had one view of the economy.”

Comments (1) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
Riverman1
79171
Points
Riverman1 12/03/12 - 04:56 am
3
0
“There really were two

“There really were two economies,” he said. “The Democrats had one view of the economy and the Republicans had one view of the economy.”

Candid remarks. But numbers are numbers. There is only one economy and it's not good.

soapy_725
43553
Points
soapy_725 12/03/12 - 11:53 am
0
0
Refreshing Analysis of the Situation.
Unpublished

The USA and Dr. Edward Deming created the Japanese Economy. It was more "social engineering". A lab test of sorts. Something that could not be done in unionized America. The reduction of all effort to numbers. Impersonal and unfeeling. The US steel industry was the initial victim and then the US auto industry. Robbing Peter to establish Paul. "A Mini America"

China is on the rise for many reasons. They have learned how to manage fiscal capitalism in the midst of personal communism. Stalin used this every "five years" but was to paranoid to change to a total release. China will become the economic super power of the world. And they will need Mideast oil and US natural gas to feed their industrial revolution. And they will wag war for resources they do not have.

Back to Top

Search Augusta jobs