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Will Automation Lead to Economic Collapse?

Most of the agriculture and industrial jobs are already phased out by machines. Over 70% of jobs and labor is currently to find in the service sector, but also this sector is being phased out and replaced by automation which means decreased purchasing power of the general public. Just take a look at this: http://www.thefiscaltimes.com/Articles/2012/08/20/Will-Robots-Cause-Mass-Unemployment-in-China.aspx#page1

Let's make an example as well. What exactly happens when people get automated by machines? They loose their jobs and need welfare to support themselves until they get a new job, if they ever do. But, where does welfare come from? It comes from tax payers. And do people on welfare pay taxes? They don't. So, what happens when everybody is on welfare due to automation and nobody pays taxes? This example is the reality in Michigan and the government there have been on the brink of shutting down due this exact issue. And we are beginning to see this never-ending spiral go out of control in the rest of the world. The trends are definitely there, but where's the solutions?

Is an economic collapse, in fact, an imminent event and a mathematical certainty, looking at the trends in Michigan and China? And is there a way out of this, looking at it in an economical perspective?

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  • Sep 29 2012: Even if automation eventually lead us to nirvana, we might all burn on the way there in the riots that may ensue.

    Rapid automation is certain to create vast pools of unemployed whose skills are no longer required. No alternative jobs that produce tangible goods will be awaiting. Some form of goods and services redistribution will need to be devised before people go cold and hungry.

    Let say miraculously, the new economical equilibrium is achieved. All physical or routine mental jobs are automated so 99% population don't need to work. All goods and services are delivered by robots to each individual.

    What will happen to the people? You can start by watching "Wall-E" http://en.wikipedia.org/wiki/WALL-E

    Think of typical side effects when people are not busy or challenged:
    1) they procreate -- can automation solve issues resulting from geometric population growth?
    2) they seek thrills -- resulting in risky behavior, drug use
    3) they want more -- more stuff, more control over others, new social orders, revolutions, radicalism ...

    So to avert these, everyone would have to be occupied with mental and physical activities to keep them busy or else suffer the consequences.

    Good Luck.

    [ Pragmatic Understanding of Trade Imbalance http://ideabits.blogspot.com/ ]

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