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Learning, Sharing, and Teaching => Investor Alley => Topic started by: joenorm on September 05, 2021, 03:48:27 PM

Title: Are you concerned with American decline?
Post by: joenorm on September 05, 2021, 03:48:27 PM
With regards to stocks and particularly Index fund investing are you concerned with the decline of American as a place for innovation?

I am no expert in this area but have listened to many smart people make the case that Asia will soon be the center of tech entrepreneurship and innovation just as the US has been until the present.

If so, how are you diversifying to address this. I am sure I am not the first person to ask this, so links to past discussions would be encouraged.

thanks

Title: Re: Are you concerned with American decline?
Post by: Rob_bob on September 05, 2021, 05:39:13 PM
I'm not concerned about U.S. business overall at this point.  Socially I think the country could soon be on hospice.
Title: Re: Are you concerned with American decline?
Post by: EvenSteven on September 05, 2021, 05:44:26 PM
Not really. As far as my own portfolio goes, I think listening to many really smart people with the hopes of beating the market will cost me more money than it will make me.
Title: Re: Are you concerned with American decline?
Post by: bacchi on September 05, 2021, 06:15:52 PM
Where in Asia? China was a possibility until they started jailing the tech CEOs and taking over companies.

South Korea? Japan?
Title: Re: Are you concerned with American decline?
Post by: AccidentialMustache on September 05, 2021, 06:16:59 PM
No. What would you do, invest in China and hope the gov't doesn't randomly nationalize the corp out from under you? The US markets already include a ton of international companies. If the US really declines that much, those aren't going to cease to exist, they're going to shift their focus away from the US.

See also "made in USA" vs "made in Japan" from the 80s/90s. Doom never came to pass.
Title: Re: Are you concerned with American decline?
Post by: Michael in ABQ on September 05, 2021, 06:17:22 PM
No, I don't think American innovation is going anywhere. China's market is sitting on a huge debt bubble with various underlying demographic, social, and political factors that could cause it to burst. While there may be more patents coming out of China than in year's past, how many of them are truly groundbreaking advances and how many are minor improvements or quite frankly just copying innovation elsewhere that wasn't already patented in China?

Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 05, 2021, 07:31:51 PM
I'm pessimistic about the USA in the medium term as a country/society/political entity. Because of this I'm global market cap weighted (VT and equivalents). However, look at the top 10 holdings of VT:
Code: [Select]
Apple Inc.
Microsoft Corp.
Alphabet Inc.
Amazon.com Inc.
Facebook Inc.
Tesla Inc.
Taiwan Semiconductor Manufacturing Co. Ltd.
Berkshire Hathaway Inc.
NVIDIA Corp.
JPMorgan Chase & Co.
Possibly ignoring Tesla, those companies aren't going anywhere.

With that said if you wanted to be slightly overweight certain developing markets (eg, FRDM, EWW, etc) I wouldn't think that you were crazy.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 05, 2021, 07:34:41 PM
Where in Asia? China was a possibility until they started jailing the tech CEOs and taking over companies.

South Korea? Japan?

Well, this is how FRDM breaks down:
Code: [Select]
Taiwan 20.03%
South Korea 17.41%
Chile 16.95%
Poland 14.60%
South Africa 7.01%
Indonesia 5.63%
Mexico 4.67%
Philippines 4.59%
Brazil 4.48%
Malaysia 3.35%

Just as an example of some other Asian economies to maybe be overweight in.
Title: Re: Are you concerned with American decline?
Post by: Abe on September 05, 2021, 07:48:03 PM
Thatís an ironic ticker symbol. Do I trust the stability of the USí government-company relationship and government-research relationship more than Indonesia, Philippines and Malaysia? Yes, all three have rampant corruption and barely functioning infrastructure.

Maybe not more than S Korea or Japan, but they have big albatrosses around their neck with all the old people and their refusal to allow in many immigrants. Taiwan has Chinaís slowly increasing grip on pacific trade and Asian-African trade to contend with.
Title: Re: Are you concerned with American decline?
Post by: ixtap on September 05, 2021, 07:58:37 PM
I have been told this is the case my entire life and we continue to be innovation leaders. If we could just get our act together regarding invading other countries...
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 05, 2021, 08:25:18 PM
Thatís an ironic ticker symbol. Do I trust the stability of the USí government-company relationship and government-research relationship more than Indonesia, Philippines and Malaysia? Yes, all three have rampant corruption and barely functioning infrastructure.

1. It's an emerging market fund. The USA hasn't yet undeveloped to the point of acceptance. Also, Japan isn't EM either.
2. I've been to Malaysia, I didn't notice a distinct lack of infrustrutre.
3. The freedom data is provided by the Fraser Institute, Cato Institute, and Friedrich Naumann Foundation for Freedom. You may or may not agree with the data, but it isn't an ETF's place to make up their own data.

https://alphaarchitect.com/wp-content/uploads/compliance/etf/factsheets/FRDM_Factsheet.pdf
Title: Re: Are you concerned with American decline?
Post by: ender on September 05, 2021, 08:46:09 PM
I think people simultaneously worry too much about this but discount the ability of a country like China/India to compete in this space longer term.

Many people in the USA see crappy Chinese import products and assume all Chinese innovation is of equal quality, aka worthless. That isn't true.
Title: Re: Are you concerned with American decline?
Post by: Abe on September 05, 2021, 08:48:20 PM
Thatís an ironic ticker symbol. Do I trust the stability of the USí government-company relationship and government-research relationship more than Indonesia, Philippines and Malaysia? Yes, all three have rampant corruption and barely functioning infrastructure.

1. It's an emerging market fund. The USA hasn't yet undeveloped to the point of acceptance. Also, Japan isn't EM either.
2. I've been to Malaysia, I didn't notice a distinct lack of infrustrutre.
3. The freedom data is provided by the Fraser Institute, Cato Institute, and Friedrich Naumann Foundation for Freedom. You may or may not agree with the data, but it isn't an ETF's place to make up their own data.

https://alphaarchitect.com/wp-content/uploads/compliance/etf/factsheets/FRDM_Factsheet.pdf


 (https://alphaarchitect.com/wp-content/uploads/compliance/etf/factsheets/FRDM_Factsheet.pdf)

1. Ah that makes sense.
2. Have friends from all three, they note that infrastructure is not their home countries' strong suite, especially in regards to climate change. Malaysia is probably the most developed out of the three by a long shot.
3. So it's freedom for companies to make money in countries with weak governments, not necessarily the population's freedom. In that case the ticker does make sense. Still, I'd be worried about some politician's useless kid being inserted into VP of some company and driving it (or at least a division) into the ground. Happens all the time in developing countries.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 05, 2021, 08:59:38 PM
So it's freedom for companies to make money in countries with weak governments, not necessarily the population's freedom.

I believe that it is both freedoms, which is why Friedrich Naumann Foundation for Freedom data is included and why India didn't make the cut. If you are at all interested I strongly recommend listening to the interview with Perth Tolle on the Animal Spirits podcast. I think that it's this episode: https://theirrelevantinvestor.com/2021/03/12/animal-spirits-investing-in-freedom/
Title: Re: Are you concerned with American decline?
Post by: Abe on September 05, 2021, 09:47:03 PM
It's interesting you mention that, as the Cato institute's analysis suggests:

1. Phillipines, Brazil, Malaysia, Mexico and Indonesia all do poorly (<5/10) in the "Rule of Law" and "Legal System/Property Rights". Poland, Chile and S Africa do ok at ~6 and S Africa at 5.7/10 (though the Chilean bank was well-known money launderer for Pinochet, and the Polish bank is state-owned). For comparisons, the US and western European countries rank in the high 6s to low 8s for these.

2. For the countries invested in particular, personal freedom rank and economic freedom rank do not correlate. Same for human freedom rank and economic freedom rank. For countries as a whole they vaguely do correlate (human vs economic better than personal vs economic), but not for the ones chosen in this fund. Same applies for direct scores for each category rather than rank (but correlation is worse for human vs economic freedoms and disappears for personal vs economic in this system).

I can show you the data and graphs if you want, data is also here:  (https://www.cato.org/human-freedom-index/2020)

Will for sure listen to the podcast, thanks!
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 05, 2021, 10:14:17 PM
Phillipines, Brazil, Malaysia, Mexico and Indonesia all do poorly (<5/10) in the "Rule of Law" and "Legal System/Property Rights". Poland, Chile and S Africa do ok at ~6 and S Africa at 5.7/10 (though the Chilean bank was well-known money launderer for Pinochet, and the Polish bank is state-owned). For comparisons, the US and western European countries rank in the high 6s to low 8s for these.

I believe that the index is freedom weighted when taking into account their three data sources. Which is why they weight Taiwan, South Korea, Chile, and Poland above all the rest. Speaking of which Chile has a The Human Freedom Index of 8.18 on the link you posted, because Pinoche has been dead for 15 years. I believe FRDM re-balances yearly on yearly freedom data.

But it was only included here as an example of where to maybe invest in Asia that wasn't China.
Title: Re: Are you concerned with American decline?
Post by: Radagast on September 05, 2021, 11:13:14 PM
Yes, no maybe? Not out of the ordinary, I am not. And ordinary means what you see the past 100 years throughout the US and other developed world. I am 50/50 US/International as a long standing policy though. It has only been very recently (~2013) that the US stock market has been on a tear relative to the cap-weighted rest of the world. Before that there were lots of logical reasons why the US stock market should underperform the rest of the world, as it had for most recorded time periods in the prior decades.

Also, don't mistake valuation changes for innovation. US stocks are nearly twice as expensive as they were when this website was founded, relative to how good the companies actually are. If companies were to have the same price relative to actual results as they did 10 years ago, prices would have to fall by a factor of two. Similarly, there were tons of explanations in the 1980's for why Japanese companies were fundamentally more innovative than US or anyone else companies. Were Japanese companies actually that much more innovative, or were they just five times more expensive? My vote is the latter.

There are hundreds of reasons besides declining innovation why US stock returns could trail other countries for years or decades, and some of them are very exciting while some are very mundane. So I generally advise people to keep 20-45% of their total investments in international stock funds regardless.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 06, 2021, 12:04:12 AM
As a slight aside XCEM is a market cap weighted EM-ex China ETF. Combined VEA and VTI you can build a global market cap weighted ex-China portfolio, if that was your thing.
Title: Re: Are you concerned with American decline?
Post by: aceyou on September 06, 2021, 08:34:17 AM
I think the US could decline as a political entity, but not as a capitalistic entity.  The money might continually erode, but there will still be strong businesses churning out goods and services, and people will buy those with SOME currency.  It won't hurt amazon if in 20 years 50% of people buy things on their site with bitcoin or ethereum, but it would hurt the power center of the US government. 

If your top priority is to see the land mass that is currently called the "USA" look and operate as it does now, then yes, we may be in decline.  But if your priority is the health and strength of the economic activity of the businesses that operate on that land mass, then I bet things will be just fine. 

It's totally possible that in 40 years we may not be the world hegemon that we are today, and yet we could be far richer as a people than ever before.  Think Italy.  If you compare them to the roman empire, they are in a state of big time decline compared to 2 thousand years ago on the world stage.  But economically, Italians are living a much richer life the roman empire could have ever dreamed of.  The Italian economy of 2021 crushes the roman empire, even if politically they aren't as big of a deal.   
Title: Re: Are you concerned with American decline?
Post by: MustacheAndaHalf on September 06, 2021, 09:06:56 AM
The U.S. has a big lead with it's tech companies, but admittedly the big tech firms are concentrated in Silicon Valley and Redmond (WA).  I don't think they'll fall away anytime soon - partly because they have worldwide offices and attract immigrants to work for them in the U.S.  So are those really U.S. companies?  Big tech is 20% of the U.S. stock market, and is unlikely to decline significantly.

You can allocate more international if you're concerned that U.S. stocks will underperform.  If all your stocks are U.S. companies, then you need better diversification regardless of a decline or not.  And if there's a greater chance of decline, that can be matched with a greater allocation to international.
Title: Re: Are you concerned with American decline?
Post by: Financial.Velociraptor on September 06, 2021, 12:25:33 PM
I think the US will still perform well.  There will be long stretches where Asia (and even Africa) outperforms but that isn't American Decline.  The arrow will still go up and to the right for the USA, maybe slower than some people like.
Title: Re: Are you concerned with American decline?
Post by: joenorm on September 06, 2021, 01:37:14 PM
Thanks everyone for weighing in. I'm still reading through your responses.
Title: Re: Are you concerned with American decline?
Post by: ChpBstrd on September 07, 2021, 10:06:27 AM
Yes, I'm very concerned about American decline. In particular, because elections are now about ad spending rather than leadership performance, the underlying assumption of democracy may no longer apply. People today vote based on the propaganda effect - repeated slogans and narratives that break down resistance and create tribalism - rather than assessing their own interests or values. It doesn't matter how incompetent a politician proves themselves to be, as long as the money is there to buy the ads to sway the voters who stare at screens 5+ hours a day and consider their internet experience to be a valid part of reality.

The result is federal and local governments that cannot solve basic problems, such as winning wars, removing lead from drinking water, having an effective law enforcement / judicial system, managing natural disasters, or replacing crumbling bridges. Political ineffectiveness has led many Americans to cynicism. A quarter of millennials in a 2018 survey said electing leaders is unimportant, and only 19% disagreed with the statement that ďmilitary takeover is not legitimate in a democracy.Ē. These pro-coup sentiments suggest the U.S's democracy could collapse within our lifetimes.
https://www.nbcnews.com/think/opinion/democracy-essential-millennials-increasingly-aren-t-sure-should-concern-us-ncna847476 (https://www.nbcnews.com/think/opinion/democracy-essential-millennials-increasingly-aren-t-sure-should-concern-us-ncna847476)

I remain mostly invested in the U.S. though, because it is a culture where money buys not only power, but the right to survive. To be poor here involves heightened risk of death by crime, pollution, law enforcement, diet-related illness, and a lack of healthcare to a much greater extent than people face in most other developed countries. American culture is about working long hours so that you can live in a relatively safer neighborhood, send your kid to a relatively better school, hire a good lawyer if you get into legal trouble, and maintain health insurance coverage. American culture is also about propping up the stock market at all costs, and ensuring that profits make their way to shareholders. Sure, lots of people in Europe and Asia work hard too, but the systems for incentivizing labor in those countries are arguably not as brutal (unless you are a Uyghur in a Chinese forced labor camp). Also, a greater percentage of corporate profits in Asia and Europe are directed toward welfare states or ruling parties, but in the U.S. profits are directed to shareholders, who ensure it stays that way by financing the ads which swing elections.

In a nutshell, the U.S. system is uniquely designed to extract the most work and consumption possible out of its people, and return the vast majority of those profits to shareholders. The FIRE movement is an effort to cheat this system by becoming a large enough shareholder to escape most of the incentive/disincentive structure that compels people to spend their whole lives working. One simply has more FIRE leverage in U.S. stocks vs. stocks in high tax / high regulation social democracies or in dictatorships like Russia/China/Phillipines/Thailand.

If the U.S. changes to being a one-party oligopoly like Russia or China, I'll pivot to investing in democracies elsewhere in the world based on the assumption that the U.S. government / ruling party will take an increasing slice of profits from investors through corruption or nationalization. However, many of these cultures, such as South Korea, Chile, Japan, Australia, Western Europe, South Africa, India, etc. will be subject to the same pressures that fell the U.S, so the universe of investible places could shrink dramatically in the coming decades.
Title: Re: Are you concerned with American decline?
Post by: FLBiker on September 07, 2021, 10:51:28 AM
Interesting question and thread.

Personally, yes, I am concerned.  We moved from the US to Canada last year in part because of this concern -- having dual citizenship seems like a good hedge.  We're still heavily invested in the US, though.  We basically follow the global market cap.  I do wonder if we shouldn't tilt more towards other countries, but I share the same concerns folks have raised.  My feeling that China would be the next superpower was much stronger before I lived there.  The pollution is unreal, and between the environmental issues and the government control, they have some significant obstacles.  And Taiwan is fantastic as a country (I lived there for 5 years) but their economy could be in a lot of trouble overnight if China decided to get aggressive about their One China policy.  All that is to say, who knows?

I tend to agree that American multinational companies will probably continue to do pretty well.  And, more importantly, I have no idea if or when that will change, so for now I'm continuing to stay the course.
Title: Re: Are you concerned with American decline?
Post by: Paul der Krake on September 07, 2021, 11:27:51 AM
I'm not really concerned, yet.

We still import containers full of knowledge workers despite idiotic hurdles. If you use your brain for a living, by and large the US labor market remains the most attractive in the world. Mothers in Mumbai don't brag to their friends about how their son or daughter got a job in Beijing, they brag about them getting a job in California.

That doesn't mean I think the country can afford to be complacent, but let's not overstate the doomsday case.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 07, 2021, 11:40:03 AM
That doesn't mean I think the country can afford to be complacent, but let's not overstate the doomsday case.

But even assuming the doomsday case (let's say that over the next 12 months the USA ceased to exist as a political entity). Baring all out war Seattle and the bay area are still going to be teching away. And even if they were bombed to rubble a lot of those companies have offices overseas. I think that the USA could literally burn to the ground and then sink into the ocean tomorrow and it wouldn't put the big multinational tech companies out of business. Of course, it wouldn't be good for our portfolios. But our US holdings also wouldn't go to zero.
Title: Re: Are you concerned with American decline?
Post by: seattlecyclone on September 07, 2021, 11:48:31 AM
That doesn't mean I think the country can afford to be complacent, but let's not overstate the doomsday case.

But even assuming the doomsday case (let's say that over the next 12 months the USA ceased to exist as a political entity). Baring all out war Seattle and the bay area are still going to be teching away. And even if they were bombed to rubble a lot of those companies have offices overseas. I think that the USA could literally burn to the ground and then sink into the ocean tomorrow and it wouldn't put the big multinational tech companies out of business. Of course, it wouldn't be good for our portfolios. But our US holdings also wouldn't go to zero.

I think you're perhaps overstating the likelihood that price declines would be the worst thing to happen to our brokerage accounts in the event of a US political collapse and civil war. Property rights can become rather fluid in such a situation, especially for property owners who are not seen as sufficiently loyal to whatever side happens to be holding a gun to the heads of the bankers that day.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 07, 2021, 12:00:02 PM
That doesn't mean I think the country can afford to be complacent, but let's not overstate the doomsday case.

But even assuming the doomsday case (let's say that over the next 12 months the USA ceased to exist as a political entity). Baring all out war Seattle and the bay area are still going to be teching away. And even if they were bombed to rubble a lot of those companies have offices overseas. I think that the USA could literally burn to the ground and then sink into the ocean tomorrow and it wouldn't put the big multinational tech companies out of business. Of course, it wouldn't be good for our portfolios. But our US holdings also wouldn't go to zero.

I think you're perhaps overstating the likelihood that price declines would be the worst thing to happen to our brokerage accounts in the event of a US political collapse and civil war. Property rights can become rather fluid in such a situation, especially for property owners who are not seen as sufficiently loyal to whatever side happens to be holding a gun to the heads of the bankers that day.

I do think about that sometimes. What happens to all of my Vanguard and Fidelity holdings if the USA descends into civil war?

Should I start buying taxable shares in an off shore account?
Title: Re: Are you concerned with American decline?
Post by: Paul der Krake on September 07, 2021, 12:08:27 PM
Nobody knows. Humans in crowds are annoyingly unpredictable sometimes.

Realistically, there are so many things in the world that tie back to the US dollar in one way or another that I don't think the domicile of your ETFs would change anything.

If you want to fully insulate yourself from the US, it needs to be 100% disconnected. Maybe some instruments that are only connected on the economic situation in a country you like. Good luck finding something worth owning with a real firewall. Ownership in a fishing operation in a small town in Japan or something, I don't know.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 07, 2021, 12:18:06 PM
Realistically, there are so many things in the world that tie back to the US dollar in one way or another that I don't think the domicile of your ETFs would change anything.

If you want to fully insulate yourself from the US, it needs to be 100% disconnected. Maybe some instruments that are only connected on the economic situation in a country you like. Good luck finding something worth owning with a real firewall. Ownership in a fishing operation in a small town in Japan or something, I don't know.

I'm obviously not talking about fully insulating myself from the USA. In today's economy that would be impossible. I'm more interested in the ETF domicile question. Which I've never really gotten a good answer to. Eg, TSMC and Samsung aren't going to stop trading no matter what happens in the USA. But how to hold them?
Title: Re: Are you concerned with American decline?
Post by: ChpBstrd on September 07, 2021, 02:58:58 PM
Realistically, there are so many things in the world that tie back to the US dollar in one way or another that I don't think the domicile of your ETFs would change anything.

If you want to fully insulate yourself from the US, it needs to be 100% disconnected. Maybe some instruments that are only connected on the economic situation in a country you like. Good luck finding something worth owning with a real firewall. Ownership in a fishing operation in a small town in Japan or something, I don't know.

I'm obviously not talking about fully insulating myself from the USA. In today's economy that would be impossible. I'm more interested in the ETF domicile question. Which I've never really gotten a good answer to. Eg, TSMC and Samsung aren't going to stop trading no matter what happens in the USA. But how to hold them?

When geopolitical chaos has erupted in the past, people have generally maintained access to domestically held assets - that is, assets domiciled in the same country they are located in. The risk is when you have assets in overseas banks, and you need to flee, but your assets have been legally frozen by one or the other entities. For example, many Europeans in the World War 2 era took the precaution of moving money into U.S. banks, only to have their assets frozen when they needed it most. This left them just as doomed as if their assets disappeared due to domestic societal breakdown (which was also an unfortunate reality for Jews).
https://govinfo.library.unt.edu/pcha/PlunderRestitution.html/html/StaffChapter3.html (https://govinfo.library.unt.edu/pcha/PlunderRestitution.html/html/StaffChapter3.html)

Meanwhile, the German stock markets only suspended trading in 1944 when Allied air raids destroyed the exchange building in Frankfurt, and even thereafter trading continued from rooms in the basement. The stock market reopened only six months after the Allies conquered Germany.
https://www.deutsche-boerse.com/dbg-en/our-company/frankfurt-stock-exchange/history-of-the-frankfurt-stock-exchange/text-collection-30850?frag=247610  (https://www.deutsche-boerse.com/dbg-en/our-company/frankfurt-stock-exchange/history-of-the-frankfurt-stock-exchange/text-collection-30850?frag=247610)

Basically, societies are led by their wealthiest people, and the wealthy generally prioritize the maintenance of property rights, with few extreme exceptions such as Russia's communist revolution, Mao's China, and the Nazi seizure of Jewish assets. If you were to, for example, move your assets to accounts in Panama or the UK, you would run the risk of having your assets in those countries frozen - either by coercion from the U.S. regime or as a sanctions program by those countries.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 07, 2021, 03:02:39 PM
If you were to, for example, move your assets to accounts in Panama or the UK, you would run the risk of having your assets in those countries frozen - either by coercion from the U.S. regime or as a sanctions program by those countries.

Wildly off topic from the OP, but I have UK citizenship and would do my best to get there ASAP in case of actual US civil war.

Panama is an off shore banking mecca, but it is also easy to get PR there. Do you really think that Panama is going to keep a resident from spending their assets? What if they are in Panama at the time?

Yes, Russia is the case that I worry the most about. But as you mentioned it isn't very common.
Title: Re: Are you concerned with American decline?
Post by: Paul der Krake on September 07, 2021, 04:10:47 PM
If you were to, for example, move your assets to accounts in Panama or the UK, you would run the risk of having your assets in those countries frozen - either by coercion from the U.S. regime or as a sanctions program by those countries.

Wildly off topic from the OP, but I have UK citizenship and would do my best to get there ASAP in case of actual US civil war.

Panama is an off shore banking mecca, but it is also easy to get PR there. Do you really think that Panama is going to keep a resident from spending their assets? What if they are in Panama at the time?

Yes, Russia is the case that I worry the most about. But as you mentioned it isn't very common.
Panama is an inconsequential nation, akin to a fly buzzing around a bison's head, tolerated but unable to dictate anything. They will cow to whatever the new world order happens to be.
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 07, 2021, 05:31:28 PM
Just wanted to express my appreciation for the fascinating turn this discussion has taken. Definitely discussing tail end of the distribution risks but still really interesting to think about how to optimize for them. Thanks.

Edit: An example from Turkey of how even less than the Soviet revolution can lead to economic ruin for a group within a country with lots of money: https://en.wikipedia.org/wiki/Varlık_Vergisi
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 07, 2021, 05:38:11 PM
Just wanted to express my appreciation for the fascinating turn this discussion has taken. Definitely discussing tail end of the distribution risks but still really interesting to think about how to optimize for them. Thanks.

I like to think that we won't see a civil war in the USA in our lifetimes, but I'm not at all convinced that we won't see the dissolution of the union. The Senate is getting more unrepresentative every day and I fully expect the west coast to get fed up and put their foot down one day. I'm not sure what that will look like.
Title: Re: Are you concerned with American decline?
Post by: Navion33 on September 07, 2021, 10:37:09 PM
I am mostly in agreement with everyone else here in the sense that the U.S. will most likely continue to be a major economic player well into the future. So there might not be a "flight" of capital/ complete collapse of the U.S. market but probable down-turns in the market are bound to happen. Why? I will draw my opinion based on geopolitics/population forecast and predictions. Its a point of interest that I think should require more research but in a simplistic viewing, seem to put the U.S. in a somewhat stable position well into 2100.

Population will stay constant while a majority of other countries will see theirs decline. Why is it important? Consumerism. It's what drives today's economy. Have a stable population = constant stream of consumers. Although, the market might not be as "green" as it is now mainly due to natural capital loss from the Boomer generation. Millennials are 2nd in the amount of population and will never compare in numbers to what their parents where in that sense. Note that I said a majority of countries, not all. I would suggest looking up future 'stable' population figures. Some negatives that I see are Russia, China, Brazil, Germany. Some positives would be U.S., Mexico, France, Turkey

Now what I said is just a jargon version of what can be found out through research, but I am usually surprised when no one mentions this topic since modern economics can be driven by population consumerism and is a good predictor of future markets when taken into account. Overall this is an outside/international viewpoint! Internal things of the U.S. is a whole separate beast to look at.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 07, 2021, 11:00:35 PM
... Some positives would be U.S., Mexico, France, Turkey.

Speaking of Mexico, Mexico has 129M people with an average age of 29 years and a birth rate of 18/1k. The USA has 328M people with an average age of 38 years and a birth rate of 11/1K. But Mexico is only 0.2% of the world market cap while the USA is 58.6% (using VT today). Which sounds like it could grow more in the next 80 years, AMLO notwithstanding?
Title: Re: Are you concerned with American decline?
Post by: rmorris50 on September 08, 2021, 03:43:34 AM
Depends on how friendly our immigration and work visa policy is going forward to attract the smartest people in the world to our country. We would be in major decline if that world talent should no longer be able to come to the States.


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Title: Re: Are you concerned with American decline?
Post by: FLBiker on September 08, 2021, 05:11:13 AM
Depends on how friendly our immigration and work visa policy is going forward to attract the smartest people in the world to our country. We would be in major decline if that world talent should no longer be able to come to the States.

This has already been changing.  I work in international education, and we've definitely seen a decline in interest in coming to the US to study.  Canada seems to be the primary beneficiary, in part because they've made it easier to transition from international student to permanent resident, while the US has made it harder.
Title: Re: Are you concerned with American decline?
Post by: Michael in ABQ on September 08, 2021, 06:24:46 AM
I am mostly in agreement with everyone else here in the sense that the U.S. will most likely continue to be a major economic player well into the future. So there might not be a "flight" of capital/ complete collapse of the U.S. market but probable down-turns in the market are bound to happen. Why? I will draw my opinion based on geopolitics/population forecast and predictions. Its a point of interest that I think should require more research but in a simplistic viewing, seem to put the U.S. in a somewhat stable position well into 2100.

Population will stay constant while a majority of other countries will see theirs decline. Why is it important? Consumerism. It's what drives today's economy. Have a stable population = constant stream of consumers. Although, the market might not be as "green" as it is now mainly due to natural capital loss from the Boomer generation. Millennials are 2nd in the amount of population and will never compare in numbers to what their parents where in that sense. Note that I said a majority of countries, not all. I would suggest looking up future 'stable' population figures. Some negatives that I see are Russia, China, Brazil, Germany. Some positives would be U.S., Mexico, France, Turkey

Now what I said is just a jargon version of what can be found out through research, but I am usually surprised when no one mentions this topic since modern economics can be driven by population consumerism and is a good predictor of future markets when taken into account. Overall this is an outside/international viewpoint! Internal things of the U.S. is a whole separate beast to look at.

Another important aspect is that a business in the US has immediate access to tens or hundreds of millions of customers. If you're starting out almost anywhere else in the world you will have much higher barriers to entry to access that many customers without jumping through the hoops of operating in multiple countries. China and India may have populations of a billion plus, but there's still wide swaths of those countries that are not really customers for most products as they lack the means to purchase it. Even the poor in the US still have far more income to spend than much of the world's population. There's also all the infrastructure in place to get products and services to consumers. I can have a package in the hands of virtually anyone in the US in a matter of days for a few dollars. Almost everyone has access to the internet and there's multiple channels to easily advertise goods and services a local or national audience. You can start a business in a few minutes from the comfort of your home - though you will have some hoops to jump through if you want to make it more than just a small side hustle or hobby. Still, those steps are fairly easy compared to what it takes in a lot of other countries.
Title: Re: Are you concerned with American decline?
Post by: MustacheAndaHalf on September 08, 2021, 08:30:03 AM
Measuring with economies isn't as telling as measuring with median incomes, in my view.  The U.S. ranks #6 in median income (and household income).  Or using wikipedia data, #4 in the world.
https://worldpopulationreview.com/country-rankings/median-income-by-country

Some countries with much smaller economies are doing fine for their people.  Sweden and Norway are top in per-capita income, and #2 and #3 in median household income.  Their stock markets are a tiny fraction of America's, but individuals are making more money there (purchasing power parity).

China is the second largest economy, with a median household income of $6180/year, or 7x less than America's.  It's likely China passes the U.S. at some point, and then Chinese workers can be proud of their country's economy... and earn 3.7x less than workers in the Czech Republic.

Economic size seems less relevant than median income, and the U.S. is doing quite well with median income.
Title: Re: Are you concerned with American decline?
Post by: ender on September 08, 2021, 08:38:09 AM
Median income is kind of a useless statistic in my opinion unless it's normalized for quality of life.
Title: Re: Are you concerned with American decline?
Post by: mistymoney on September 08, 2021, 09:18:14 AM
I'd llike some specifics on how we have we declined on innovation. Is it just that other economies are becoming highly innovated as well?

For recent US innovation, Pfizer co-developed the first covid vaccine with a germany company, Moderna also an american company. Blue Origina and SpaceX are both american companies, those are what comes to mind when I think of innovation. Is someone coming to take major market share away from Apple, Alphabet, and microsoft?

Other have mentioned that the future is multinationals. I don't see how that would affect investments. SP500 is full of mulitnationals.

Are we just upset that we don't have the market in tech cornered anymore?
Title: Re: Are you concerned with American decline?
Post by: sixwings on September 08, 2021, 09:42:25 AM
American decline is mostly overstated IMO. There may be more new companies coming out of developing countries, which is great, but IMO America will continue to be the #1 place for growth, innovation and value. If anything I think the US's influence will grow. The US navy still controls and will continue to control for the foreseeable future all shipping and flow of goods.
Title: Re: Are you concerned with American decline?
Post by: seattlecyclone on September 08, 2021, 12:03:26 PM
Depends on how friendly our immigration and work visa policy is going forward to attract the smartest people in the world to our country. We would be in major decline if that world talent should no longer be able to come to the States.

This has already been changing.  I work in international education, and we've definitely seen a decline in interest in coming to the US to study.  Canada seems to be the primary beneficiary, in part because they've made it easier to transition from international student to permanent resident, while the US has made it harder.

Yep. It's so shortsighted. If you get a degree in the US your diploma should come with a green card stapled to it so you can work toward improving the US economy if that's what you want to do. Instead we send them back where they came from, whether they want to go or not, and they end up using their expertise there.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 08, 2021, 02:07:44 PM
Yep. It's so shortsighted. If you get a degree in the US your diploma should come with a green card stapled to it so you can work toward improving the US economy if that's what you want to do. Instead we send them back where they came from, whether they want to go or not, and they end up using their expertise there.

But with that US degree you can probably get an EU blue card (https://www.apply.eu/). If I wasn't born here, I wouldn't work here. PR track visas are just too hard to get short of having a PhD.
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 08, 2021, 02:43:06 PM
Yep. It's so shortsighted. If you get a degree in the US your diploma should come with a green card stapled to it so you can work toward improving the US economy if that's what you want to do. Instead we send them back where they came from, whether they want to go or not, and they end up using their expertise there.

But with that US degree you can probably get an EU blue card (https://www.apply.eu/). If I wasn't born here, I wouldn't work here. PR track visas are just too hard to get short of having a PhD.

Even with a PhD it's a pain and requires people to jump through all sorts of necessary hoops.
Title: Re: Are you concerned with American decline?
Post by: Abe on September 08, 2021, 08:07:23 PM
The other good thing going for the US is we have a large pool of docile working-class people (as in they donít expect much from either the government or employers) that seem happy to hand over any hard-earned gains to people rich enough to invest in various companies, hoping to one day get some crumbs from that pie. I donít something like that would fly in most of Western Europe or developed parts of Asia.

Also, I think the home-grown pool of talent is sufficient that even if we scare off some foreign students with our craziness we will be ok. Sometimes going back home is worse than dealing with a years-long paperwork slog and xenophobes. Thatís why Iím here! (My parents thought it was worth it in the 90s, but now they probably wouldíve gone to Canada).
Title: Re: Are you concerned with American decline?
Post by: Paul der Krake on September 08, 2021, 08:24:14 PM
The other good thing going for the US is we have a large pool of docile working-class people (as in they donít expect much from either the government or employers) that seem happy to hand over any hard-earned gains to people rich enough to invest in various companies, hoping to one day get some crumbs from that pie. I donít something like that would fly in most of Western Europe or developed parts of Asia.
LOL at the idea that Americans get "crumbs". It's one of the countries where workers have the most disposable income in the world, right after Switzerland and Norway.

I indirectly wrote about this last year:
https://forum.mrmoneymustache.com/welcome-to-the-forum/so-you-want-to-move-to-europe-a-reality-check/
Title: Re: Are you concerned with American decline?
Post by: former player on September 09, 2021, 02:38:27 AM
The whole premise of this thread is nuts.  The climate will go belly-up long before the Chinese economy can overtake the American economy.

https://www.theguardian.com/commentisfree/2021/sep/09/earths-tipping-points-closer-current-climate-plans-wont-work-global-heating
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 09, 2021, 06:46:44 AM
People have been saying the U.S. is in decline for my entire lifetime, yet the S&P has exploded in value by 10x since I was a freshman in high school.  In another 20-30 years the China scare might be forgotten in the way people pretty much forget the Japanese ravaging of the American machine tool industry, its challenge to American automakers, etc.   

China faces profound demographic challenges thanks to the one child policy.  Its ability to create robust overland trade with India will require the biggest engineering accomplishemnts ever - somehow tackling the Tibetan Plateau and the Himalayas with an array of record-smashing bridges and tunnels that will take decades to build.   

The United States continues to attract huge numbers of the best people from various parts of the world, especially India and East Asia.  We do need to somehow encourage more native-born Americans from wealthy families to have more children and to quit waiting until they're 38 to have their first one.   

Title: Re: Are you concerned with American decline?
Post by: Abe on September 09, 2021, 07:27:21 AM
The other good thing going for the US is we have a large pool of docile working-class people (as in they donít expect much from either the government or employers) that seem happy to hand over any hard-earned gains to people rich enough to invest in various companies, hoping to one day get some crumbs from that pie. I donít something like that would fly in most of Western Europe or developed parts of Asia.
LOL at the idea that Americans get "crumbs". It's one of the countries where workers have the most disposable income in the world, right after Switzerland and Norway.

I indirectly wrote about this last year:
https://forum.mrmoneymustache.com/welcome-to-the-forum/so-you-want-to-move-to-europe-a-reality-check/

Relative to the top earners, they do. Relative to other societies probably not. However, the two other examples have a much better safety net. Disposable income in the US is somewhat misleading because it doesnít account for planning for emergencies, which is expected of individuals rather than the government in this country.
Title: Re: Are you concerned with American decline?
Post by: ChpBstrd on September 09, 2021, 07:36:19 AM
We do need to somehow encourage more native-born Americans from wealthy families to have more children and to quit waiting until they're 38 to have their first one.   

To do this, the U.S. would have to:

1) Prevent localities from enacting zoning measures and bureaucratic obstacles in an effort to create housing scarcity and prop up home values. Good luck losing the votes of most homeowners in HCOL areas with a sweeping anti-federalist command from the federal level, which could then cause a foreclosure crisis. Democrats depend on these voters so it'll never happen. In the meantime, nobody's raising a 3-child family in a $3k/mo studio apartment.

2) Increase funding for scholarships so that young people can start families instead of starting debt payments on five or six-figure education mortgages. This would have to be done in a way so that the college and university duopolists are not incentivized to further increase their costs by adding more features and bureaucratic bloat, as they have done with subsidies in the past. Republicans would prefer people not go to college, so this will never happen.

3) Change the healthcare system to something more like any other developed country, instead of an extortion racket. Paying 3x as much for healthcare and periodically losing access to healthcare when between jobs drains the resources of would-be American families, creates chronic health conditions due to lack of treatment, and leads to the sort of economic uncertainty that persuades couples to stay on the pill perpetually a little longer. Republicans and moderate Democrats are competing for lobbyist dollars from the insurance and pharmaceutical industries, so this will never happen.

4) Expand the education system to include kids younger than kindergarten. This would free up women to participate in the workforce while having 2, 3, or even 4+ kids if they want to, thereby stabilizing the population. But because it has a "cost" that may not be made up for by tax revenue from all these working women and the effects of their spending, this will be seen as a new thing that will require higher taxes. Republicans will never agree to higher taxes on their constituents to pay for a "nanny state" so it will never happen, except perhaps in a few Democratic strongholds where the costs of housing and higher education deter family-making anyway.

So, in a nutshell, various political special interests and economic rent-seekers have become so entrenched that they've become able to block reforms across the economy and extort huge percentages of middle-class and poor incomes, thus discouraging family formation. Lobbyist money mean that none of the 4 reforms listed above could possibly even make it into today's Overton Window.

This is how empires die and how revolutions form. The people eventually get sick of their escalating costs and the entrenched interests that block reform, and then begin to support destruction of the entire system. What's bizarre in the U.S. case is how (1) people still vote against their interests, in response to advertisements, and (2) our individualistic reaction to broken, extortive systems is an attempt to work even harder to pay ever-higher costs, rather than to organize political opposition, while (3) directing our frustrations at the institutions of democracy while simultaneously refusing to participate in it.
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 09, 2021, 08:00:15 AM
To do this, the U.S. would have to:

Idiocracy just turned 15, and in the opening scene, a yuppie couple keeps explaining why it's not the right time to have kids while the trailer parkers keep pumping them out.  People who have no money or stability don't hesitate to have kids while people who are professionally employed tend to hesitate like crazy. 

I'm not sure that anyone predicted this back when oral contraceptives were developed back around 1960s.  I expect that they hoped for the complete opposite. 
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 09, 2021, 08:47:43 AM
People who have no money or stability don't hesitate to have kids while people who are professionally employed tend to hesitate like crazy. 

This isn't universal but it does seem to be a rather strong trend. I wish we knew more about the actual root causes.

@ChpBstrd, would it be fair to summarize your list of ways to increase the birth rate as "lower housing costs, free education, free health care, free childcare"? Because I agree all of those are barriers to having children, but if we look at many parts of Europe that have those things, birth rates are still low (and even lower if you discount children born to immigrant mothers) and continuing to decline.

So while those policies very well might move the needle, it seems to me like the european datapoints indicate they clearly aren't the whole explanation, nor would they be enough to get us back up to replacement rate levels of fertility.

Now on a global level, we're in no danger of having a shortage of humans in the next couple of generations. But it would still seems like a shift that would benefit from greater study as we try to envision what a high standard of living society might have to look like to sustain its population from generation to generation without a dependence on immigration from countries with much lower standards of living.*

*I'm very much pro-immigration, and in my lifetime I see no problem with immigration as a solution, but ideally (if climate change doesn't kill us and we don't nuke each other) someday all those countries with low standards of living and hence high bird rates are going to turn into societies with high standards of living and, extrapolating from current trends, below replacement birth rates.
Title: Re: Are you concerned with American decline?
Post by: ender on September 09, 2021, 10:56:39 AM
People who have no money or stability don't hesitate to have kids while people who are professionally employed tend to hesitate like crazy. 

This isn't universal but it does seem to be a rather strong trend. I wish we knew more about the actual root causes.

It's not that hard to figure out imo. I think there's tons of various causes though.

It's expensive to have kids if you are a dual income family. If you go from dual income to single income, it now is still expensive and you lose an income.

Professionally, having a kid is awful because you trade a major something for the chance to be a parent career wise. Maybe it's income, maybe it's time, you definitely sacrifice something huge in order to have kids and work professionally.

Kids are fucking exhausting and many people who feel incredibly empowered by not having kids because they basically can do whatever they want with their lives.

Birth control is easy and available for folks with money/resources.

We don't live in a society where having kids literally keeps you alive in older ages.

And the internet has made it so people can find out about more lifestyles that aren't the stereotypical "everyone just gets married and has kids and buys a house" lust that has been the American dream for some time. There's still a stigma about it but it's a lot less of a stigma than it would have been in years past.

But basically it's become a lifestyle choice and tradeoff analysis. And, candidly as a parent myself who probably wouldn't have kids if I could go back and change my past? It's one a lot of people realize isn't worth it.
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 09, 2021, 11:00:53 AM
This isn't universal but it does seem to be a rather strong trend. I wish we knew more about the actual root causes.

With all of the chatter from the left-leaning press like NPR regarding economic inequity, you'd think that they'd make some connection between large inheritances and low to zero offspring.  I had a teacher in high school who claimed that he had 64 first cousins - only the very largest estates might trickle down to someone born into that situation.


Quote
*I'm very much pro-immigration, and in my lifetime I see no problem with immigration as a solution

Immigration "solves" some problems but issues with native-born professional class Americans remain.  I am not a fan of this writer for several reasons, but this column is germane to this subject: https://www.nytimes.com/2021/05/07/opinion/motherhood-baby-bust-early-parenthood.html
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 12:44:14 PM
The other good thing going for the US is we have a large pool of docile working-class people (as in they donít expect much from either the government or employers) that seem happy to hand over any hard-earned gains to people rich enough to invest in various companies, hoping to one day get some crumbs from that pie. I donít something like that would fly in most of Western Europe or developed parts of Asia.
LOL at the idea that Americans get "crumbs". It's one of the countries where workers have the most disposable income in the world, right after Switzerland and Norway.

I indirectly wrote about this last year:
https://forum.mrmoneymustache.com/welcome-to-the-forum/so-you-want-to-move-to-europe-a-reality-check/

But that thread is about people living in the USA and this thread is about companies that are listed on the US stock exchanges, I think. Along those lines the USA kicks ass if you are in the top part of the income distribution (I don't know where to draw the line, but definitely the top 10%). But the USA sucks a lot if you are in the bottom 10%, it sucks way more than Scotland for example. Along those lines a couple years ago my maximum yearly spend for healthcare for my family (premiums + work contribution + OOP max) was $38K USD. That's insane. It's an insane drag on the economy and also an insane tax if I wasn't so highly paid. I could say similar things about US college tuition compared to some of our competitors. I can speak at length about how ridiculous US immigration is. Also transportation and other infrastructure. If you add all of those things up I absolutely question the competitiveness of the USA compared to Canada, Germany, Mexico, etc going forward.

But if US companies are going to move some of their operations into Canada and Mexico, I'm not sure that it matters for the average investor.   
Title: Re: Are you concerned with American decline?
Post by: caleb on September 09, 2021, 01:05:44 PM
But basically it's become a lifestyle choice and tradeoff analysis.


@ChpBstrd, would it be fair to summarize your list of ways to increase the birth rate as "lower housing costs, free education, free health care, free childcare"? Because I agree all of those are barriers to having children, but if we look at many parts of Europe that have those things, birth rates are still low (and even lower if you discount children born to immigrant mothers) and continuing to decline.


I suspect that beyond the quantifiable costs of having lots of kids that can be dealt with through policy/redistribution, there's the more nebulous reality that having 4+ kids is going to dominate your life no matter what. 

With couples who are both working 40-60 hours a week, there's no amount of financial help that's going to make it feel like something doesn't have to give.

Beyond all the monetary costs, lots of people appear to value their careers for non-financial reasons more than they value having a big family.  There's no realistic government subsidy that looks like it would change that.
Title: Re: Are you concerned with American decline?
Post by: Michael in ABQ on September 09, 2021, 01:41:08 PM
I have 6 kids, so definitely at the far right end of the bell curve on family size in the US (households of 7+, i.e. 5 or more kids, represent about 1-2% of US households). It was a very conscious decision early in our relationship that my wife was going to be a stay at home mom and I needed to be able to provide for our family on a single income. We didn't have a specific number of kids in mind but certainly planned on more than the typical 2-3 (which seems to be changing to 1-2 for many families). That meant making trade-offs about buying a house, buying newer cars, taking vacations, eating at restaurants, etc. Kids are expensive. Not so much the feeding and clothing them, but the fact that we live in a 5-bedroom house instead of a one-bedroom apartment. We own a large van that gets 10 miles per gallon to fit 8 people - many of whom are in car seats. We choose to send our kids to a private school (luckily after 3 kids it's free). We could certainly fit everyone into a 2-3 bedroom apartment and use public schools, etc. but we choose to spend our money on the most important thing which is family and education. 

Even with the government throwing money at us with child tax credits, that's not really a factor for us. It's certainly nice not worrying about paying income taxes even if I make $100k+ - but that didn't affect our decision-making. There's no economic argument that says having kids is a good idea. Lots of countries are trying to encourage people to have children - most with minimal success. Going from 0 to 1 is a total disruption of your lifestyle. 1 to 2 or 2 to 3, not quite as much. A few thousand dollars a year doesn't replace the opportunity cost of a full-time income over multiple years - even at a relatively low wage. 

So unless you have a lot more people embrace a culture of life, instead of a culture of death, I don't think the needle will move back in the other direction on population growth. It will continue to decline and world population will probably peak in a few decades. The US will be later than most countries just because of immigration, but some countries like Russia are already experiencing declining population. With the demographic issues in most of Europe and east Asia many other countries will be close behind - even places like China and India due to imbalances in their sex ratio from decades of sex-selective abortions (both are at about 110 males for every 100 females). https://statisticstimes.com/demographics/countries-by-sex-ratio.php
Title: Re: Are you concerned with American decline?
Post by: former player on September 09, 2021, 01:47:01 PM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 09, 2021, 01:51:39 PM
I suspect that beyond the quantifiable costs of having lots of kids that can be dealt with through policy/redistribution, there's the more nebulous reality that having 4+ kids is going to dominate your life no matter what.  ... Beyond all the monetary costs, lots of people appear to value their careers for non-financial reasons more than they value having a big family.  There's no realistic government subsidy that looks like it would change that.

That aligns with my own nebulous thinking as well. Which leads to some really strange hypothetical worlds of the future centuries from now (again assuming the planet doesn't kill us or we don't kill each other) if our natural state as a species, given education and options, is that fewer of us want devote large fractions of our lives to having and raising children than it takes to hit replacement rate.

But again, for at least the next century or two we've no shortage of total people in the world and lots of intelligent and motivated young people from around the globe are still be up for moving to the USA if we let them. I think it is something under appreciated by many people who live in the USA full time just now different America is in being defined by a set ideas and culture much more than a specific ethnicity or group of ethnicities. Means we're much better positioned to carry on as a country based on immigration than many other places.

Immigration "solves" some problems but issues with native-born professional class Americans remain.  I am not a fan of this writer for several reasons, but this column is germane to this subject: https://www.nytimes.com/2021/05/07/opinion/motherhood-baby-bust-early-parenthood.html

Yes, as that article highlights, there is a lot we could do to make having children less stressful and more practical for people in the USA. And I'm not saying we shouldn't do those things. Just that even if we did, the evidence from elsewhere in the world suggests it wouldn't be enough to hit replacement rate.

I don't know that there would be anything actionable to it. It would be interesting to know the statistics specifically for 2nd generation or later professional-class americans. FWIW, it does look like education has a modestly U-shaped effect on total fertility, with women with a PhD/JD/MD having an average of 1.5 children over their lifetimes and those with a bachelors 1.3 so the results might not be what one would initially predict.

(https://imgpile.com/images/NSxbww.jpg) (https://imgpile.com/i/NSxbww)
Title: Re: Are you concerned with American decline?
Post by: Paul der Krake on September 09, 2021, 01:53:33 PM
The other good thing going for the US is we have a large pool of docile working-class people (as in they donít expect much from either the government or employers) that seem happy to hand over any hard-earned gains to people rich enough to invest in various companies, hoping to one day get some crumbs from that pie. I donít something like that would fly in most of Western Europe or developed parts of Asia.
LOL at the idea that Americans get "crumbs". It's one of the countries where workers have the most disposable income in the world, right after Switzerland and Norway.

I indirectly wrote about this last year:
https://forum.mrmoneymustache.com/welcome-to-the-forum/so-you-want-to-move-to-europe-a-reality-check/

But that thread is about people living in the USA and this thread is about companies that are listed on the US stock exchanges, I think. Along those lines the USA kicks ass if you are in the top part of the income distribution (I don't know where to draw the line, but definitely the top 10%). But the USA sucks a lot if you are in the bottom 10%, it sucks way more than Scotland for example. Along those lines a couple years ago my maximum yearly spend for healthcare for my family (premiums + work contribution + OOP max) was $38K USD. That's insane. It's an insane drag on the economy and also an insane tax if I wasn't so highly paid. I could say similar things about US college tuition compared to some of our competitors. I can speak at length about how ridiculous US immigration is. Also transportation and other infrastructure. If you add all of those things up I absolutely question the competitiveness of the USA compared to Canada, Germany, Mexico, etc going forward.

But if US companies are going to move some of their operations into Canada and Mexico, I'm not sure that it matters for the average investor.
Well Abe and I went into a tangential discussion about labor's share of profits, which, true, isn't really what we're discussing here.

You are right to question the competitiveness of the USA over the long term, infrastructure is a big problem, immigration is a big problem, healthcare is a big problem, yes, all of this is true and needs adressing.

Top software companies still hire a shit ton of people in San Francisco and Seattle even though they can (and do) pay 30-50% less in a couple hundred miles North in Vancouver for the exact same job in their satellite offices. It's possible that they are all being idiots, in which case where are the competitors making a killing on this arbitrage opportunity?

Ultimately it boils down to this: advanced economies are very complex machines that provide a lot of efficiencies, and that is inherently valuable. Outsource the lower value add jobs to less developed countries: it lets them get their feet wet, while you focus on the stuff you are better at. This creates a perpetual mechanism where everyone progressively ratchets up their level of specialization, increasing standards of living everywhere. Specialization is good.
Title: Re: Are you concerned with American decline?
Post by: vand on September 09, 2021, 02:16:22 PM
I'm not in the US.. and not at all concerned with question postulated in the OP.

Over time I think it is inevitable that the US will at least lose much of its dominant position. All countries go through phases of waxing and waning political, military and economic influence.  In fact, they are doing it to themselves as they continue to live well beyond its means and becomes more and more indebted.. however it won't matter until, well, until it does matter. 

The reality is that the US operate much more like Europe today in terms of how its government works, implementing welfare programmes left right and centre. The fabric of US politics has become a far more Left vs Right debate than it was ever traditionally - it used to be said that the traditional Red/Blue colours were interchangeable between the two main parties... but somewhere in the last couple of decades that has gone out the windows, and everyone knows what is meant by Red States and Blue States.  as it operates more like Europe, you should expect it to experience more problems of stagnant growth that Europe is familiar with - Capital is not in the hands of the best capitalists.

However, the one thing, maybe the only thing, that the US still has going for it that could preserve its position as the pre-eminent power is that it is still a country where entrepreneurship is alive and thriving, moreso than virtually every other major economy. So yes, while they do have increasingly big problems,, dysfunctional federal government and enormous debt burden, they are also extremely good at redefining the game of what is possible - big problems, but big solutions.  As long as that is true then I think there is still a good shot that the US will retain a similar level of global influence.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 02:27:03 PM
Top software companies still hire a shit ton of people in San Francisco and Seattle even though they can (and do) pay 30-50% less in a couple hundred miles North in Vancouver for the exact same job in their satellite offices. It's possible that they are all being idiots, in which case where are the competitors making a killing on this arbitrage opportunity?

My full time day job is tech on the west coast. I think about this a lot. I talk to other people in the industry about it. I think it boils down to:
1. A critical mass of talent
2. A huge pile of VC money
3. The freedom to hire/fire at will with zero government oversight
I hear that this is different than say Berlin.

But over the next 80 years I strongly suspect that the US west coast will no longer demand a premium on tech talent.
Title: Re: Are you concerned with American decline?
Post by: mistymoney on September 09, 2021, 02:37:54 PM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Title: Re: Are you concerned with American decline?
Post by: former player on September 09, 2021, 02:40:16 PM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Maybe he thinks anyone who hasn't had 6 kids must have had 6 abortions instead?
Title: Re: Are you concerned with American decline?
Post by: caleb on September 09, 2021, 03:02:43 PM
I suspect that beyond the quantifiable costs of having lots of kids that can be dealt with through policy/redistribution, there's the more nebulous reality that having 4+ kids is going to dominate your life no matter what.  ... Beyond all the monetary costs, lots of people appear to value their careers for non-financial reasons more than they value having a big family.  There's no realistic government subsidy that looks like it would change that.

That aligns with my own nebulous thinking as well. Which leads to some really strange hypothetical worlds of the future centuries from now (again assuming the planet doesn't kill us or we don't kill each other) if our natural state as a species, given education and options, is that fewer of us want devote large fractions of our lives to having and raising children than it takes to hit replacement rate.


Beyond finances, I suspect the actionable policies would need to be around alleviating the zero sum game between children and career for people, especially women.

A policy allowing every full time worker to cut back to 50% time at 50% pay for some period of years (7-10?) without losing rank or advancement would probably go a tremendous distance toward allowing people to have both a large number of children and a career.

Regulating employers to make them absorb volatility and some inefficiency just isn't the American way, though.
Title: Re: Are you concerned with American decline?
Post by: ChpBstrd on September 09, 2021, 03:16:55 PM
To do this, the U.S. would have to:

Idiocracy just turned 15, and in the opening scene, a yuppie couple keeps explaining why it's not the right time to have kids while the trailer parkers keep pumping them out.  People who have no money or stability don't hesitate to have kids while people who are professionally employed tend to hesitate like crazy. 
Perhaps the trailer parkers have solved the equation for affordable housing and now have the resources to support larger families? Maybe it's the career professionals in trendy suburbs working long hours to pay for empty bedrooms who are on a never-ending and meaningless hedonic treadmill. The trailer parkers are accomplishing a life goal and creating a legacy, while the yuppies are simply burning time and money. Who is really smarter?

People who have no money or stability don't hesitate to have kids while people who are professionally employed tend to hesitate like crazy. 
@ChpBstrd, would it be fair to summarize your list of ways to increase the birth rate as "lower housing costs, free education, free health care, free childcare"? Because I agree all of those are barriers to having children, but if we look at many parts of Europe that have those things, birth rates are still low (and even lower if you discount children born to immigrant mothers) and continuing to decline.
Housing is extraordinarily expensive compared to income in many parts of Western Europe, and the unemployment rate is routinely above 10% in multiple Western European countries. The social safety nets are often better than in the U.S, and transportation is more affordable, but it appears lots of people still struggle to afford tiny apartments. The same could be said of Japan and South Korea.

Still, people made due and had large families in the past, even amid all sorts of uncertainties and with tiny housing. Perhaps the real issue isn't the lack of an empty bedroom or seat in the SUV that a kid could occupy, it's that people value other things more than having kids - namely money and stuff that can buy us individually-enjoyable experiences. We take for granted that there was a time when one could work their ass off and still not enjoy air conditioning, automotive travel, fancy restaurant food, electronics, or resort vacations. In that world, people's joy was expected to come from other people in their proximity, which is a value set juxtaposed with our current status quo of expecting joy to come from imported manufactured objects, tech devices, or the aspiration to live in a prestigious "gated community" where the neighbors in this supposed community don't even know one another and contribute nothing but their purchase price. Those of us aspiring to FIRE expect our joy to come from having more autonomy over our time, which is itself a modern luxury, enabled by financial products which didn't exist a few generations ago. Bottom line, it's all about us. We're more individualistic than ever before, and more skeptical that collectives like families can work out. The concrete and immediate sense of reward we get from money and stuff seems a more solid bet than hoping to feel more satisfaction than disappointment about prospective kids someday.

I might edit my laundry list of proposed changes with a caveat: These changes can only reduce the relative cost of having a family versus other directions one can take with one's time/money. The changes would persuade more people on the margins to have more kids. However, just as getting a coupon does not guarantee I will buy something, these discounts will fail to close the gap for some number of people. For those who simply don't value the idea of having a large family, a large family will never be cheap enough, just like a Rolex will never be cheap enough for me to buy one. It is what we value, not just price, that determines what we pursue.

I have 6 kids, so definitely at the far right end of the bell curve on family size in the US (households of 7+, i.e. 5 or more kids, represent about 1-2% of US households). It was a very conscious decision early in our relationship that my wife was going to be a stay at home mom and I needed to be able to provide for our family on a single income. ... That meant making trade-offs about buying a house, buying newer cars, taking vacations, eating at restaurants, etc. Kids are expensive. Not so much the feeding and clothing them, but the fact that we live in a 5-bedroom house instead of a one-bedroom apartment. We own a large van that gets 10 miles per gallon to fit 8 people - many of whom are in car seats.

Here's an example of someone who is optimizing for something other than FIRE ***OR*** hedonic consumerism. @Michael in ABQ is trading both wealth and luxury for the experience and consequences of having a large family. It's a lifestyle choice, just like FIRE is a lifestyle choice, working until you're 70 to buy a new car every 3 years is a lifestyle choice, and so on. A consumerist might criticize Michael's lack of lifestyle luxuries, a person dedicated to hardcore FIRE might criticize his finances, and Michael might criticize them both for living their lives for the sake of money and stuff instead of surrounding themselves with unconditional love. This imagined disagreement illustrates something Adam Smith noted centuries ago - all value is relative.
Title: Re: Are you concerned with American decline?
Post by: caleb on September 09, 2021, 03:36:42 PM
Top software companies still hire a shit ton of people in San Francisco and Seattle even though they can (and do) pay 30-50% less in a couple hundred miles North in Vancouver for the exact same job in their satellite offices. It's possible that they are all being idiots, in which case where are the competitors making a killing on this arbitrage opportunity?

My full time day job is tech on the west coast. I think about this a lot. I talk to other people in the industry about it. I think it boils down to:
1. A critical mass of talent
2. A huge pile of VC money
3. The freedom to hire/fire at will with zero government oversight
I hear that this is different than say Berlin.

But over the next 80 years I strongly suspect that the US west coast will no longer demand a premium on tech talent.

As an outsider, I'm very curious what the tech giants look like in 10, 20, 30 years.

It seems like so far the financial rewards for workers have been enough to overcome lots of downsides (HCOL, an always-on culture, age discrimination), but will that continue as the industry matures?

Does working at Google gradually become more like working at General Electric or Goldman Sachs, and the NASDAQ start acting more like the DOW?
Title: Re: Are you concerned with American decline?
Post by: Michael in ABQ on September 09, 2021, 04:05:06 PM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Maybe he thinks anyone who hasn't had 6 kids must have had 6 abortions instead?

I'm glad you've given me the benefit of the doubt here. But to answer your original question when I refer to a "culture of death" I refer to abortion and the general idea that life is disposable if it's not wanted. This applies to assisted suicide as well. I realize that has nothing to do with demographics and population growth but it's the same side of the coin. If someone think it's ok to end a life in the womb they probably think it's ok to end the life of someone who is sick or old - or allow a third-party to do so. I am Catholic and so I believe that all life should be protected from conception to natural death. My wife and I embrace life which naturally leads to having children every few years. I realize that is a fringe view in society today, and even more so on this forum which tends to lean left. However, I'll leave it at that. This isn't in the off topic forum so I see no need to rehash those debates here. I have my beliefs, you have yours, and we can continue discussing if the US is in a long-term decline that will affect investment prospects going forward. As the saying goes: "demographics is destiny". I think the US has a better destiny in this regard than most of the world so I am not as concerned about long-term decline - at least not within my lifetime and investing timeframe.
Title: Re: Are you concerned with American decline?
Post by: ender on September 09, 2021, 04:14:19 PM
Top software companies still hire a shit ton of people in San Francisco and Seattle even though they can (and do) pay 30-50% less in a couple hundred miles North in Vancouver for the exact same job in their satellite offices. It's possible that they are all being idiots, in which case where are the competitors making a killing on this arbitrage opportunity?

My full time day job is tech on the west coast. I think about this a lot. I talk to other people in the industry about it. I think it boils down to:
1. A critical mass of talent
2. A huge pile of VC money
3. The freedom to hire/fire at will with zero government oversight
I hear that this is different than say Berlin.

But over the next 80 years I strongly suspect that the US west coast will no longer demand a premium on tech talent.

As an outsider, I'm very curious what the tech giants look like in 10, 20, 30 years.

It seems like so far the financial rewards for workers have been enough to overcome lots of downsides (HCOL, an always-on culture, age discrimination), but will that continue as the industry matures?

People have been lamenting the death of high paying US/California based tech jobs for decades.

It hasn't happened, yet, and will probably happen someday.

But tech salaries across the world are skyrocketing too. Many of the bigger tech companies have offices abroad too so geoarbitrage for wages could have been a thing - and is in some ways - if it was much less profitable.

Another consideration is how few tech companies pay all in cash. If you're paying stock, in some ways that is "free" to a company as it's not actually cash they have to provide. It's counted for accounting purposes, but not from a cashflow perspective.

Paying an engineer $250k if it's $150k cash/$100k stock is a lot cheaper from a cashflow perspective than it seems initially.
Title: Re: Are you concerned with American decline?
Post by: former player on September 09, 2021, 04:14:31 PM
Well I for one am not prepared to let go the assumption that someone who thinks a woman should have the right to control what happens to her body probably thinks it's OK for anyone to kill people who are sick or old.  I think your prejudices are showing when you try to make that equivalence.

I never hear of the "pro-life" crowd being similarly fanatic about opposing the death penalty.  That's a death cult if ever there was one.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 04:23:58 PM
I never hear of the "pro-life" crowd being similarly fanatic about opposing the death penalty.  That's a death cult if ever there was one.

wut? (https://www.usccb.org/resources/churchs-anti-death-penalty-position)

But perhaps this isn't the best thread for this discussion. Or maybe it is: see my previous comment that the union is going to tear itself apart.
Title: Re: Are you concerned with American decline?
Post by: Psychstache on September 09, 2021, 04:44:15 PM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Maybe he thinks anyone who hasn't had 6 kids must have had 6 abortions instead?

I'm glad you've given me the benefit of the doubt here. But to answer your original question when I refer to a "culture of death" I refer to abortion and the general idea that life is disposable if it's not wanted. This applies to assisted suicide as well. I realize that has nothing to do with demographics and population growth but it's the same side of the coin. If someone think it's ok to end a life in the womb they probably think it's ok to end the life of someone who is sick or old - or allow a third-party to do so. I am Catholic and so I believe that all life should be protected from conception to natural death. My wife and I embrace life which naturally leads to having children every few years. I realize that is a fringe view in society today, and even more so on this forum which tends to lean left. However, I'll leave it at that. This isn't in the off topic forum so I see no need to rehash those debates here. I have my beliefs, you have yours, and we can continue discussing if the US is in a long-term decline that will affect investment prospects going forward. As the saying goes: "demographics is destiny". I think the US has a better destiny in this regard than most of the world so I am not as concerned about long-term decline - at least not within my lifetime and investing timeframe.

Maybe my memory is failing me, but don't you work for the U.S. Military?
Title: Re: Are you concerned with American decline?
Post by: FIPurpose on September 09, 2021, 05:55:18 PM
I never hear of the "pro-life" crowd being similarly fanatic about opposing the death penalty.  That's a death cult if ever there was one.

wut? (https://www.usccb.org/resources/churchs-anti-death-penalty-position)

But perhaps this isn't the best thread for this discussion. Or maybe it is: see my previous comment that the union is going to tear itself apart.

I think recently (within the past 5 years?) both California and Nebraska have rejected repealing the Death Penalty statutes. So it's not a clearly left or right thing, though I know a lot of Evangelical protestants that are "pro-life" but also for the death penalty. Granted a lot of those people are in the South east US, but being "pro-life" despite being in the name itself doesn't lead everyone to conclude that the death penalty should be included in that.

I actually think this is something where politicians are more likely to be against it, but the people are more for it. (the Nebraska Legislature had enough votes to repeal the death penalty over a veto, but the people led a referendum to re-instate it) For politicians especially governors, it can stir up a lot of emotions and moral dilemmas, and then there's the problems with simply being able to even carry them out. It's a terrible process and most politicians who have actually seen the process at hand generally seem to be against it. I think voters tend to think of that 1 really, really evil serial killer that they think deserved it and don't want them getting a "lax" life sentence, without fully considering really how often the state executes innocent people.

It's one of the few laws that politicians today truly seem to have a better understanding on than the voters at large, but voters are easily scared into keeping it.
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 09, 2021, 06:47:52 PM
Perhaps the trailer parkers have solved the equation for affordable housing and now have the resources to support larger families? Maybe it's the career professionals in trendy suburbs working long hours to pay for empty bedrooms who are on a never-ending and meaningless hedonic treadmill. The trailer parkers are accomplishing a life goal and creating a legacy, while the yuppies are simply burning time and money. Who is really smarter?

I worked with a guy whose only daughter had five kids with two different dads between the ages of 18 and 23.  She had her tubes tied after #5.  Around that same time dad #2 went to prison for molesting the kids of dad #1.  It's always been unclear what her living situation is since they move around all of the time but the kids have never been more than 50 miles from where they were born.  A few years ago she got $5,000+ back in taxes and bought a car with no more seats than the previous one.  She has never owned a vehicle large enough to move around all of the kids legally. 

My company just hired a 20 year-old who had two kids with two different women at age 17 and another at age 18.  He wears an ankle bracelet (but never a belt, and his pants sag around his butt all shift) and has to call his officer every day he comes to work.  I've never had to deal with the daughter mentioned in the previous paragraph but I've actually have to manage this 20 year-old clown a few times. He's so out-of-shape that he was completely winded after climbing a ladder with about 8 rungs. I have no idea who these girls are who find this loser attractive, but I suspect that he will manage to reproduce many more times before dying of a heart attack at age 31. 

Here is the opening scene of Idiocracy, in case anyone hasn't seen it:
https://www.youtube.com/watch?v=gJDcoqrh1ac


 









 



Title: Re: Are you concerned with American decline?
Post by: seattlecyclone on September 09, 2021, 07:36:06 PM
(https://imgpile.com/images/NSxbww.jpg) (https://imgpile.com/i/NSxbww)

Very interesting graph. What I take out of the upswing on the right side is that a lot of people would like to have more than one child if they believe they have the space to do so successfully. As you increase educational attainment you also tend to increase income. Those who have higher incomes are able to pay for more discretionary goals. Kids are largely discretionary at this point, and can be very expensive for those on medium to higher incomes who don't qualify for as much in the way of government assistance with food, housing, medical care, child care, etc. This ties back into @ChpBstrd's post a while back about increasing middle-class access to these things at a lower cost. If you gave the median college graduate more funds to help support children, they'd probably have more of them on the margins, just like their counterparts with higher degrees have done.
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 09, 2021, 08:44:43 PM
If you gave the median college graduate more funds to help support children, they'd probably have more of them on the margins, just like their counterparts with higher degrees have done.

At the margin certainly. The difference in total fertility between a woman with a BA/BS and a PhD/MD/JD is about .25 lifetime children. The annual difference in individual annual earnings is about $30,000. Factor in assortative mating by education level and the different in HOUSEHOLD income might be on the order of $50,000/year. So back of the envelope math, the elasticity of childbearing in response to income might be 1 child per $120-200k/year of additional income or benefits.

Assuming the government needed to provide those benefits for 15 years per household that works out to $1.8-3M per increased birth. Maybe 5 years is more realistic though? I donít know, but we should be within an order of magnitude of the right number. For context, the estimates I found of what a ďtypicalĒ American might may in income tax over their lifetime ranged from $200-800k. So it doesnít seem outside the bounds of reasonable values that it costs more to induce one additional childbirth than that child would be likely to pay in taxes over their lifetime.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 08:54:13 PM
If you gave the median college graduate more funds to help support children, they'd probably have more of them on the margins, just like their counterparts with higher degrees have done.

At the margin certainly. The difference in total fertility between a woman with a BA/BS and a PhD/MD/JD is about .25 lifetime children. The annual difference in individual annual earnings is about $30,000. Factor in assortative mating by education level and the different in HOUSEHOLD income might be on the order of $50,000/year. So back of the envelope math, the elasticity of childbearing in response to income might be 1 child per $120-200k/year of additional income or benefits.

I just don't think that's how any of this works. I know people with kids. I have kids. I don't think any of them are saying "if I only made another $30k/yr I'd have another kid."
Title: Re: Are you concerned with American decline?
Post by: Paul der Krake on September 09, 2021, 08:57:10 PM
But in aggregate, that's exactly how it works. Yet another case of stated vs revealed preference?
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 09:02:09 PM
But in aggregate, that's exactly how it works. Yet another case of stated vs revealed preference?

Does it? Look at that graph. The best way to keep people having babies is to keep their income education down.
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 09, 2021, 09:06:57 PM
I just don't think that's how any of this works. I know people with kids. I have kids. I don't think any of them are saying "if I only made another $30k/yr I'd have another kid."

So youíre arguing investing in benefits like free child care or tax credits donít actually increase the number of children people will choose to have? If so, I donít think weíre necessarily that far apart. Iím saying that if there is an effect of more resources leading to people having more children it takes a LOT of money to move the needle which isnít all that different from saying there is no amount of money which would move the needle.

There may be good and ethical reasons for arguing for child care subsidies or child tax credits or free college what have you. But the data just arenít consistent with these types of factors having a big enough impact on how many children people choose to have for this to be a practical approach to try to promote increased child rearing. Whether the correct answer is ďonly a small impact on peopleís decisionsĒ or ďzero impact on peopleís decisions.
Title: Re: Are you concerned with American decline?
Post by: Paul der Krake on September 09, 2021, 09:08:36 PM
But in aggregate, that's exactly how it works. Yet another case of stated vs revealed preference?

Does it? Look at that graph. The best way to keep people having babies is to keep their income down.
Right, it doesn't work at the bottom of the distribution. I think cyclone and maizefolk were talking specifically about degree and advanced degree holders.

College is such a funny dividing line in US society.

Title: Re: Are you concerned with American decline?
Post by: BicycleB on September 09, 2021, 09:31:45 PM
After several changes of opinion over time, I think the US will muddle along for a long time doing some things well (generating corporate profits, a certain amount of innovation, economic growth that never quite stops) and some badly (public health, caring for the poor).

From the investing perspective, a strong but not complete majority of my investment capital is US based. That reflects my assessment as US resident that risks are everywhere but not so much higher in US that it's worth overcompensating. I think anywhere from 20% to 50% foreign will serve most purposes. I'm slightly below the low end of the range mostly by having accumulated real estate equity (100% US); stocks are maybe 25% foreign, though held through US funds/ETFs. For investors not based in America, decisions are highly dependent on nation of residence and I look forward to learning more.

Re the earlier question where to domicile financial investments if not USA:
1. If you're Asia oriented, maybe Singapore?
2. If you might move to Australia or New Zealand, domicile there?
3. If Europe, get an EU golden visa (Portuguese, maybe) and domicile EU? Would love to hear better answers from US expats and any knowledgeable sources.
4. If preserving options and/or avoiding tax authorities in case of political calamity, City of London (aka Cayman Islands, etc)?

I sometimes consider moving ex-US, but probably will stay. I have 1 acquaintance who moved to South America, 2 who moved elsewhere and returned to America. They missed their friends.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 09:39:48 PM
@maizefolk @Paul der Krake,

I think that mostly I would say that you are looking at a correlation of educational attainment to child bearing. There is not necessarily a strong causal relationship. Maybe women who really want kids don't focus on education. Maybe there are certain ethnic groups that happen to value big families but don't value education. On the other end of the graph perhaps people with advanced degrees just happen to be better at staying in long term committed partnerships and that giving people with a bachelor's degree more money won't induce more kids.

But I do completely support ending childhood poverty in the USA. It might not induce more childbearing but it will absolutely improve the quality of the next generation of workers. Or you know for more humanitarian reasons.
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 09, 2021, 10:06:29 PM
@maizefolk @Paul der Krake,

I think that mostly I would say that you are looking at a correlation of educational attainment to child bearing. There is not necessarily a strong causal relationship. Maybe women who really want kids don't focus on education. Maybe there are certain ethnic groups that happen to value big families but don't value education. On the other end of the graph perhaps people with advanced degrees just happen to be better at staying in long term committed partnerships and that giving people with a bachelor's degree more money won't induce more kids.

I think perhaps then you are disagreeing with SeattleCyclone's interpretation of that graph rather than mine. I'm a little frustrated and I feel like I'm repeating myself. I was working out that, if there was any positive effect of additional income/resources in number of children it was too small to be practical as a tool of public policy.

You keep replaying with language that sounds like you're disagreeing with me, but I don't understand what it is in what I am saying that you actual have a problem or disagreement with.

Edit: Okay on rereading my original post I was saying that there definitely is SOME effect at the margin. But are you really disagreeing that if you gave 1M couples each an extra 100,000 a year not a single one of them would decide to have a child they otherwise would have avoided because they couldn't afford it?
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 10:19:11 PM
I think perhaps then you are disagreeing with SeattleCyclone's interpretation of that graph rather than mine. I'm a little frustrated and I feel like I'm repeating myself. I was working out that, if there was any positive effect of additional income/resources in number of children it was too small to be practical as a tool of public policy.

I mostly agree with you. I guess I'm questioning both SeattleCyclone's interpretation and your (seeming) agreement.

Edit: Okay on rereading my original post I was saying that there definitely is SOME effect at the margin. But are you really disagreeing that if you gave 1M couples each an extra 100,000 a year not a single one of them would decide to have a child they otherwise would have avoided because they couldn't afford it?

I wouldn't go that far. I'm more saying that without actually trying it we won't know the outcome because SeattleCyclone's interpretation is that more money leads to more kids for people with at least a bachelor's degree and I'm saying that it is unproven speculation.

EDIT to add - because if more money meant more kids WTF is up with the left half of the graph?!?!
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 09, 2021, 11:05:02 PM
Edit: Okay on rereading my original post I was saying that there definitely is SOME effect at the margin. But are you really disagreeing that if you gave 1M couples each an extra 100,000 a year not a single one of them would decide to have a child they otherwise would have avoided because they couldn't afford it?

I wouldn't go that far. I'm more saying that without actually trying it we won't know the outcome because SeattleCyclone's interpretation is that more money leads to more kids for people with at least a bachelor's degree and I'm saying that it is unproven speculation.

EDIT to add - because if more money meant more kids WTF is up with the left half of the graph?!?!

Fair enough. All I'm saying is that even if the entirety of the difference in the number of children when with bachelors have the the number of children women with PhDs have was explained by differences in access to resources, it would still be so expensive that it doesn't work as an approach to public policy.

If less than 100% of the difference (for example 0% of the difference) is explained by the greater amounts of money/resources had by women with more education, that just means investing more resources in subsidizing people to have children is even more non-viable as an approach to try to increase the birth rate.

Why make extra assumptions that skew the results in favor of my conclusion when my conclusion is already true even using the assumptions which are least favorable to it?
Title: Re: Are you concerned with American decline?
Post by: BicycleB on September 09, 2021, 11:46:14 PM
if more money meant more kids WTF is up with the left half of the graph?!?!

I think that increasing income is correlated with two different intermediate effects; the graph shape results from the different weights between them. It's not a linear relation because there are multiple factors pulling in different directions.

0. At low incomes, financial stability does not appear realistic, so potential parents have little disincentive to starting a child's life. It's a natural response to an uncertain world. Things can't get worse, kids are inherently exciting and a potential legacy and source of meaning and pride, let's give it a shot. Be bold, have a kid. #GenesFTW.

1. As incomes go from low to medium, the potential parent enters the zone where financial stability seems plausible. Now there's long term competition for each new dollar instead of chaotic seizing of the moment. A dollar saved is a dollar earned, a limited but valuable tool for child enrichment. Investing in the child's future if not the parent's is important. Both parents almost always have access to work now, but need to work in view of these incentives. Time is squeezed due to the many conflicting demands. Fewer kids than the money-is-hopeless case naturally ensue, even though children are often desired in both cases. This is the zone of tradeoffs, where scarcity inhibits the number of children.

2. As incomes rise from medium to high, options increase because disposable income is higher. Even after quality goals such as high student enrichment, retirement investing for parents and plush material life are achieved, room for a nonworking spouse or other time-saving services (daycare! nannies! maids!) can be afforded. Suddenly the number of children can rise with a little less pressure on the stressed parents. Thus the graph rises again on the right.*

Just a theory.

*I realize the competition-and-elite-meritocracy-horserace phenomenon conflicts with the Less Pressure narrative, but by reading the graph, the data support that enough people use the options to increase family size.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 09, 2021, 11:58:37 PM
maizman, that's a good point.

BicycleB, you might be right about that. I'd say more as a parent that I'm not motivated to have more kids. What would I get out of it? In old timey times they could maybe help me on the farm or take care of me in my old age. I think that you could give me $1B and I wouldn't have another kid. I think that having one or two children is incredibly rewarding and that after that you reach a point of diminishing returns for the parental rewards. YMMV
Title: Re: Are you concerned with American decline?
Post by: EvenSteven on September 10, 2021, 06:33:10 AM
if more money meant more kids WTF is up with the left half of the graph?!?!

I think that increasing income is correlated with two different intermediate effects; the graph shape results from the different weights between them. It's not a linear relation because there are multiple factors pulling in different directions.

0. At low incomes, financial stability does not appear realistic, so potential parents have little disincentive to starting a child's life. It's a natural response to an uncertain world. Things can't get worse, kids are inherently exciting and a potential legacy and source of meaning and pride, let's give it a shot. Be bold, have a kid. #GenesFTW.

1. As incomes go from low to medium, the potential parent enters the zone where financial stability seems plausible. Now there's long term competition for each new dollar instead of chaotic seizing of the moment. A dollar saved is a dollar earned, a limited but valuable tool for child enrichment. Investing in the child's future if not the parent's is important. Both parents almost always have access to work now, but need to work in view of these incentives. Time is squeezed due to the many conflicting demands. Fewer kids than the money-is-hopeless case naturally ensue, even though children are often desired in both cases. This is the zone of tradeoffs, where scarcity inhibits the number of children.

2. As incomes rise from medium to high, options increase because disposable income is higher. Even after quality goals such as high student enrichment, retirement investing for parents and plush material life are achieved, room for a nonworking spouse or other time-saving services (daycare! nannies! maids!) can be afforded. Suddenly the number of children can rise with a little less pressure on the stressed parents. Thus the graph rises again on the right.*

Just a theory.

*I realize the competition-and-elite-meritocracy-horserace phenomenon conflicts with the Less Pressure narrative, but by reading the graph, the data support that enough people use the options to increase family size.

The explanation that makes the most sense to me is to reverse the causation arrow from what most people are thinking so far. Having lots of kids, starting at a young age, will cause people to attain a lower education level.
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 10, 2021, 07:19:18 AM
I was a little startled by items in a few of the previous comments - a few people show that they really think of this as a business decision.  As someone from a fairly large family, it's impossible for me to imagine what being from an only-child-no-uncles/aunts-no-cousins situation, with no roots in a particular neighborhood, or parents having heaped hundreds of thousands on my education/enrichment (Space Camp!) instead of spreading what resources they had between several kids and elderly/ill relatives who needed help. 
Title: Re: Are you concerned with American decline?
Post by: ender on September 10, 2021, 08:24:59 AM
I suspect the correlation with education has far more to do with access to birth control than it does to... much conscious choice, if I'm honest, until you get into the bachelors+ range.
Title: Re: Are you concerned with American decline?
Post by: simonsez on September 10, 2021, 10:03:52 AM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Maybe he thinks anyone who hasn't had 6 kids must have had 6 abortions instead?

I'm glad you've given me the benefit of the doubt here. But to answer your original question when I refer to a "culture of death" I refer to abortion and the general idea that life is disposable if it's not wanted. This applies to assisted suicide as well. I realize that has nothing to do with demographics and population growth but it's the same side of the coin. If someone think it's ok to end a life in the womb they probably think it's ok to end the life of someone who is sick or old - or allow a third-party to do so. I am Catholic and so I believe that all life should be protected from conception to natural death. My wife and I embrace life which naturally leads to having children every few years. I realize that is a fringe view in society today, and even more so on this forum which tends to lean left. However, I'll leave it at that. This isn't in the off topic forum so I see no need to rehash those debates here. I have my beliefs, you have yours, and we can continue discussing if the US is in a long-term decline that will affect investment prospects going forward. As the saying goes: "demographics is destiny". I think the US has a better destiny in this regard than most of the world so I am not as concerned about long-term decline - at least not within my lifetime and investing timeframe.
Honest question, if your wife has an ectopic pregnancy with a tube about to burst, what do you do?  Do you have an abortion or do you "embrace life in the womb" at the expense of your living wife and avoid the medical procedure?  If you/your wife opts to not have the abortion and roll the dice that she doesn't die, would you begrudge the hundreds of thousands of others that would choose the procedure?  How do you protect all life when doing nothing arguably hurts more life than the abortion/"culture of death" would?  I'm not Catholic so do not understand the perspective.
Title: Re: Are you concerned with American decline?
Post by: former player on September 10, 2021, 10:17:39 AM
I think Psychstache is the winner of this part of the thread.

Maybe my memory is failing me, but don't you work for the U.S. Military?

Biggest "death cult" on the planet.
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 10, 2021, 11:05:57 AM
  I'm not Catholic so do not understand the perspective.

The Catholic Church approves of abortions that are necessary to protect the health of the mother. 

Title: Re: Are you concerned with American decline?
Post by: Michael in ABQ on September 10, 2021, 11:24:06 AM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Maybe he thinks anyone who hasn't had 6 kids must have had 6 abortions instead?

I'm glad you've given me the benefit of the doubt here. But to answer your original question when I refer to a "culture of death" I refer to abortion and the general idea that life is disposable if it's not wanted. This applies to assisted suicide as well. I realize that has nothing to do with demographics and population growth but it's the same side of the coin. If someone think it's ok to end a life in the womb they probably think it's ok to end the life of someone who is sick or old - or allow a third-party to do so. I am Catholic and so I believe that all life should be protected from conception to natural death. My wife and I embrace life which naturally leads to having children every few years. I realize that is a fringe view in society today, and even more so on this forum which tends to lean left. However, I'll leave it at that. This isn't in the off topic forum so I see no need to rehash those debates here. I have my beliefs, you have yours, and we can continue discussing if the US is in a long-term decline that will affect investment prospects going forward. As the saying goes: "demographics is destiny". I think the US has a better destiny in this regard than most of the world so I am not as concerned about long-term decline - at least not within my lifetime and investing timeframe.
Honest question, if your wife has an ectopic pregnancy with a tube about to burst, what do you do?  Do you have an abortion or do you "embrace life in the womb" at the expense of your living wife and avoid the medical procedure?  If you/your wife opts to not have the abortion and roll the dice that she doesn't die, would you begrudge the hundreds of thousands of others that would choose the procedure?  How do you protect all life when doing nothing arguably hurts more life than the abortion/"culture of death" would?  I'm not Catholic so do not understand the perspective.

Removing a fallopian tube in an ectopic pregnancy has the goal of saving the life of the mother so it is not considered an abortion. Same with having to undergo a hysterectomy or chemotherapy or radiation to heal cancer. The goal is saving the life of the mother, not ending the life of the unborn child. If the unborn child dies as a result, that was not the goal or motivation for the procedure. In an abortion the goal is to end the life of that unborn child.
Title: Re: Are you concerned with American decline?
Post by: mistymoney on September 10, 2021, 01:04:07 PM
I suspect that beyond the quantifiable costs of having lots of kids that can be dealt with through policy/redistribution, there's the more nebulous reality that having 4+ kids is going to dominate your life no matter what.  ... Beyond all the monetary costs, lots of people appear to value their careers for non-financial reasons more than they value having a big family.  There's no realistic government subsidy that looks like it would change that.

That aligns with my own nebulous thinking as well. Which leads to some really strange hypothetical worlds of the future centuries from now (again assuming the planet doesn't kill us or we don't kill each other) if our natural state as a species, given education and options, is that fewer of us want devote large fractions of our lives to having and raising children than it takes to hit replacement rate.


Beyond finances, I suspect the actionable policies would need to be around alleviating the zero sum game between children and career for people, especially women.

A policy allowing every full time worker to cut back to 50% time at 50% pay for some period of years (7-10?) without losing rank or advancement would probably go a tremendous distance toward allowing people to have both a large number of children and a career.

Regulating employers to make them absorb volatility and some inefficiency just isn't the American way, though.

why limit that to parents? Why not stop making everyone miserable and let people lead fulfilling lives while also supporting themselves. I remember when jobshare was a "new" thing - then it disappeared? I haven't heard/seen anything anyway.

On the other side, If I'm FT and you're 50% for 7 years - hell yeah I better leapfrog you and the person in front of you at 50% too!
Title: Re: Are you concerned with American decline?
Post by: mistymoney on September 10, 2021, 01:34:50 PM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Maybe he thinks anyone who hasn't had 6 kids must have had 6 abortions instead?

I'm glad you've given me the benefit of the doubt here. But to answer your original question when I refer to a "culture of death" I refer to abortion and the general idea that life is disposable if it's not wanted. This applies to assisted suicide as well. I realize that has nothing to do with demographics and population growth but it's the same side of the coin. If someone think it's ok to end a life in the womb they probably think it's ok to end the life of someone who is sick or old - or allow a third-party to do so. I am Catholic and so I believe that all life should be protected from conception to natural death. My wife and I embrace life which naturally leads to having children every few years. I realize that is a fringe view in society today, and even more so on this forum which tends to lean left. However, I'll leave it at that. This isn't in the off topic forum so I see no need to rehash those debates here. I have my beliefs, you have yours, and we can continue discussing if the US is in a long-term decline that will affect investment prospects going forward. As the saying goes: "demographics is destiny". I think the US has a better destiny in this regard than most of the world so I am not as concerned about long-term decline - at least not within my lifetime and investing timeframe.
Honest question, if your wife has an ectopic pregnancy with a tube about to burst, what do you do?  Do you have an abortion or do you "embrace life in the womb" at the expense of your living wife and avoid the medical procedure?  If you/your wife opts to not have the abortion and roll the dice that she doesn't die, would you begrudge the hundreds of thousands of others that would choose the procedure?  How do you protect all life when doing nothing arguably hurts more life than the abortion/"culture of death" would?  I'm not Catholic so do not understand the perspective.

Removing a fallopian tube in an ectopic pregnancy has the goal of saving the life of the mother so it is not considered an abortion. Same with having to undergo a hysterectomy or chemotherapy or radiation to heal cancer. The goal is saving the life of the mother, not ending the life of the unborn child. If the unborn child dies as a result, that was not the goal or motivation for the procedure. In an abortion the goal is to end the life of that unborn child.

outcome is the same for the ameba-child.
Title: Re: Are you concerned with American decline?
Post by: blue_green_sparks on September 11, 2021, 09:11:13 AM
Birth rate is important to an economy for sure. It is only part of the impetus for change. As the financial class gains more and more concentration wealth and isolation from the declining quality of American life in general.....a revolution of some sort has to be brewing. Much of this discontent is perfectly misguided by that billionaire class and several restarts have been averted already (the mortgage scandal/occupy WS). The mocking of the billionaire space race has been enjoyable in my opinion.
Title: Re: Are you concerned with American decline?
Post by: MustacheAndaHalf on September 11, 2021, 09:29:12 AM
I work in international education, and we've definitely seen a decline in interest in coming to the US to study.
Yep. It's so shortsighted. If you get a degree in the US your diploma should come with a green card stapled to it so you can work toward improving the US economy if that's what you want to do. Instead we send them back where they came from, whether they want to go or not, and they end up using their expertise there.
People can apply for H-1B visas to work in the U.S., which for 2021 had all been spoken for by February - for all of 2021.  The U.S. might have too low a quota, but certainly there isn't a decline in demand for work visas.

"USCIS has received a sufficient number of petitions needed to reach the congressionally mandated 65,000 H-1B visa regular cap and the 20,000 H-1B visa U.S. advanced degree exemption, known as the masterís cap, for fiscal year (FY) 2021."
https://www.uscis.gov/news/alerts/uscis-reaches-fiscal-year-2021-h-1b-cap
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 11, 2021, 09:51:03 AM
I work in international education, and we've definitely seen a decline in interest in coming to the US to study.
Yep. It's so shortsighted. If you get a degree in the US your diploma should come with a green card stapled to it so you can work toward improving the US economy if that's what you want to do. Instead we send them back where they came from, whether they want to go or not, and they end up using their expertise there.
People can apply for H-1B visas to work in the U.S., which for 2021 had all been spoken for by February - for all of 2021.  The U.S. might have too low a quota, but certainly there isn't a decline in demand for work visas.

You're replying to a poster stating there is a decline in interest in coming to the united states to study. The total of international students at US colleges peaked around 2018 and has been gradually declining since.

I don't have global numbers for applications but at the one university where I have direct knowledge applications from international students have declined much more substantially than international enrollment. We're accepting a larger proportion of the remaining pool because of how much tuition international students pay vs in-state students (public school).
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 11, 2021, 10:53:34 AM
As the financial class gains more and more concentration wealth and isolation from the declining quality of American life in general.....a revolution of some sort has to be brewing.

The problem is that life is too easy in the United States, which causes people to flip out over nothing.  Almost nobody has to farm or do any hard and dangerous physical work.  Most people have easy-as-hell jobs.  There is no draft. You can spend your free time doing just about anything you want.  We are living in the future that people grunting in the fields could only dream of, and people still aren't happy.  You could give these unhappy people everything they think they want and they'd still be unhappy. 

Update: the wildly overweight 20 year-old father of 3 w/the ankle bracelet who I described earlier in this thread who was out-of-breath after climbing an 8-rung ladder has been fired.  In the United States today, Twitter, etc., swarm on the person who calls out pathetic people, not the pathetic people.  It's worse to call out someone who is lazy and self-entitled than to be lazy and self-entitled. 
 
Title: Re: Are you concerned with American decline?
Post by: Ron Scott on September 11, 2021, 01:39:38 PM
I would say I am ďfrustratedĒ at the trend in America that looks likely to continue for some time.

The social fabric (income inequality, political) is troublesome. There seems to be a greater imbalance between labor and capital. Anti-intellectualism is running hot. And ďleadersĒ seem too interested in power over achievement. All this is typically Americanónot really newóbut I feel itís trending to the worse these days.

This is a era in which America needs to be at the top of its game, and itís not. In the 20th century and before America could afford wasteful social and political infighting and still come out on top. Those days are over.

Bottom lineóIíve felt for awhile that the times are aíchanging enough that we cannot trust historic investment returns in US markets to behave in a way that we can predict SWRs for long periods of time, like 30-40 years. That should give us pause.
Title: Re: Are you concerned with American decline?
Post by: BicycleB on September 11, 2021, 02:32:37 PM
times are aíchanging enough that we cannot trust historic investment returns in US markets to behave in a way that we can predict SWRs for long periods of time, like 30-40 years. That should give us pause.

You might be right.

It could also happen that the changes cause dramatic or serious negative impacts for many, while still producing profits for stockholders (or property owners, or bondholders, or 2 of the 3 investor groups). Hard to know.

Makes me value skill development, community building, and health as well as financial metrics. On the financial side, lean towards diversification.

Still, I think there's room to FIRE. FIRE-like chances are probably worth taking.

Title: Re: Are you concerned with American decline?
Post by: ender on September 11, 2021, 05:42:37 PM
I think people forget just how low is CAGR you need for successful FIRE.

2% real CAGR --> success for almost all FIRE scenarios.

Much higher than 2% real and your ending with more money than you will know what to do with.
Title: Re: Are you concerned with American decline?
Post by: MustacheAndaHalf on September 12, 2021, 09:07:57 AM
I work in international education, and we've definitely seen a decline in interest in coming to the US to study.
Yep. It's so shortsighted. If you get a degree in the US your diploma should come with a green card stapled to it so you can work toward improving the US economy if that's what you want to do. Instead we send them back where they came from, whether they want to go or not, and they end up using their expertise there.
People can apply for H-1B visas to work in the U.S., which for 2021 had all been spoken for by February - for all of 2021.  The U.S. might have too low a quota, but certainly there isn't a decline in demand for work visas.
You're replying to a poster stating there is a decline in interest in coming to the united states to study. The total of international students at US colleges peaked around 2018 and has been gradually declining since.
So American decline is defined by the number of international students who apply to American universities?  Two years of fewer applicants means an American decline?

Japan is struggling with an aging population - because it means a lower percentage of workers.  It's an example of why workers are significant both to an economy, and can impact quality of life.  That is why I pointed out that foreign workers are maxing out the quota for those allowed to work in the U.S.
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 12, 2021, 10:41:05 AM
I work in international education, and we've definitely seen a decline in interest in coming to the US to study.
Yep. It's so shortsighted. If you get a degree in the US your diploma should come with a green card stapled to it so you can work toward improving the US economy if that's what you want to do. Instead we send them back where they came from, whether they want to go or not, and they end up using their expertise there.
People can apply for H-1B visas to work in the U.S., which for 2021 had all been spoken for by February - for all of 2021.  The U.S. might have too low a quota, but certainly there isn't a decline in demand for work visas.
You're replying to a poster stating there is a decline in interest in coming to the united states to study. The total of international students at US colleges peaked around 2018 and has been gradually declining since.
So American decline is defined by the number of international students who apply to American universities?  Two years of fewer applicants means an American decline?

Japan is struggling with an aging population - because it means a lower percentage of workers.  It's an example of why workers are significant both to an economy, and can impact quality of life.  That is why I pointed out that foreign workers are maxing out the quota for those allowed to work in the U.S.

The H1-B quota is 85,000/year (65,000 normal slots plus 20,000 for advanced degrees). It's a rounding error in terms of either our total workforce (165M people) or even total legal immigration (>1M people/year) so, while I agree that if we couldn't even fill that it would be a giant red flag, that fact that we are still able to fill it each year doesn't provide a lot of information content one way or other about how interested people are in coming to the USA.

Since international student enrollment isn't capped, we can actually see changes in how interested folks are in coming to the USA. So no it isn't conclusive evidence one way or another, but it has more information content than the stats you were using to try to dismiss it.
Title: Re: Are you concerned with American decline?
Post by: caleb on September 14, 2021, 02:08:00 PM
(https://imgpile.com/images/NSxbww.jpg) (https://imgpile.com/i/NSxbww)

Very interesting graph. What I take out of the upswing on the right side is that a lot of people would like to have more than one child if they believe they have the space to do so successfully. As you increase educational attainment you also tend to increase income. Those who have higher incomes are able to pay for more discretionary goals. Kids are largely discretionary at this point, and can be very expensive for those on medium to higher incomes who don't qualify for as much in the way of government assistance with food, housing, medical care, child care, etc. This ties back into @ChpBstrd's post a while back about increasing middle-class access to these things at a lower cost. If you gave the median college graduate more funds to help support children, they'd probably have more of them on the margins, just like their counterparts with higher degrees have done.

You and @maizefolk might find this piece summarizing results of cash incentives for fertility around the world interesting: https://www.nytimes.com/2021/02/17/upshot/americans-fertility-babies.html

The summary is that cash incentives do have a small marginal effect in the short term, especially among lower income people and less educated people, but the increase in fertility is small and often short lived.

I suspect that @maizefolk is right that for a cash incentive to be effective for higher earners it would have to be so enormous that it would be politically impossible.

One aspect to affluent people's aversion to large families that nobody has touched on is that they perceive greater downside risk to having children who, for whatever reason, do not become financially independent early in adulthood.  Whereas poorer families may be more likely to let a child live in borderline poverty on the social safety net, affluent families are much more likely to subsidize that child in adulthood.  They're not just committing to getting a kid through high school, they're committing to making sure the child has a more or less middle class lifestyle, no matter what, for an indefinite period.  The financial risk is huge.
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 14, 2021, 03:07:14 PM
One aspect to affluent people's aversion to large families that nobody has touched on is that they perceive greater downside risk to having children who, for whatever reason, do not become financially independent early in adulthood.  Whereas poorer families may be more likely to let a child live in borderline poverty on the social safety net, affluent families are much more likely to subsidize that child in adulthood.  They're not just committing to getting a kid through high school, they're committing to making sure the child has a more or less middle class lifestyle, no matter what, for an indefinite period.  The financial risk is huge.

Sure.  If you have five or more kids, odds are that one or more of them is going to be a bit of a clown.  It's also possible that the parents will earn much more money by the time the youngest reaches college, meaning the younger kids are raised in a much more affluent situation than the older kids.

What's really crazy is to look up the stats on abortion by race/income.  The poor are having the most kids and, by orders of magnitude, the most abortions.  Meanwhile, the crowd marching for abortion rights is mostly the professional class. 
Title: Re: Are you concerned with American decline?
Post by: Letj on September 14, 2021, 03:57:24 PM
Well I for one am not prepared to let go the assumption that someone who thinks a woman should have the right to control what happens to her body probably thinks it's OK for anyone to kill people who are sick or old.  I think your prejudices are showing when you try to make that equivalence.

I never hear of the "pro-life" crowd being similarly fanatic about opposing the death penalty.  That's a death cult if ever there was one.

Nor similarly fanatic about caring for the born. There are tons of suffering children around the world and right here in America. The same people that oppose a womanís right to choose also oppose any program to support caring for those children. They donít want their tax dollars touched for head start programs, healthcare, etc that would benefit all the children who are born into poverty.
Title: Re: Are you concerned with American decline?
Post by: Letj on September 14, 2021, 04:06:11 PM
  I'm not Catholic so do not understand the perspective.

The Catholic Church approves of abortions that are necessary to protect the health of the mother.

Oh so the motherís life is more important?
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 14, 2021, 04:07:02 PM
What's really crazy is to look up the stats on abortion by race/income.  The poor are having the most kids and, by orders of magnitude, the most abortions.  Meanwhile, the crowd marching for abortion rights is mostly the professional class.

I don't know that this is particularly crazy in that it is different from what one would expect.

The professional class has better access to birth control and successfully entering/staying the the professional class requires a high level of self discipline/deferred gratification, so they're going to have fewer unplanned pregnancies both fewer leading to births (as we saw in that chart posted above) and fewer leading to abortions. The poorest folks have many more total pregnancies, resulting in both more births and more abortions.*

People who are educated and have more money and free time tend to be much more politically active than people who are living hand to mouth and working two jobs. That's not unique to the abortion debate, you see the same thing in almost any political movement or political campaign.

What would you expectation be that you find this pattern unexpected?

*Hence the argument that improving sex ed and access to birth control would be the single most effective way to reduce the actual number of abortions which occur in the USA.
Title: Re: Are you concerned with American decline?
Post by: Michael in ABQ on September 14, 2021, 04:38:04 PM
Well I for one am not prepared to let go the assumption that someone who thinks a woman should have the right to control what happens to her body probably thinks it's OK for anyone to kill people who are sick or old.  I think your prejudices are showing when you try to make that equivalence.

I never hear of the "pro-life" crowd being similarly fanatic about opposing the death penalty.  That's a death cult if ever there was one.

Nor similarly fanatic about caring for the born. There are tons of suffering children around the world and right here in America. The same people that oppose a womanís right to choose also oppose any program to support caring for those children. They donít want their tax dollars touched for head start programs, healthcare, etc that would benefit all the children who are born into poverty.

You are conflating the right to life with the right to social welfare. You can want to help mothers and children without thinking that forced redistribution thought a government program is the best way to do so. Somewhere close to most abortion clinics is a pro-life pregnancy center that will provide help to mothers in need. The one here in Albuquerque - Project Defending Life (https://www.defendinglife.org/) - was next door to a Planned Parenthood clinic but had to relocate after it was firebombed several years ago - https://www.abqjournal.com/895163/fbi-investigating-suspected-arson-at-pro-life-ministry.html

Also, the Catholic Church is not the Republican party. Both hold pro-life views, but differ in many other areas. The Church provides charity for children and the poor throughout the world. I am not a Republican, though I do generally vote for them since I won't vote for a political candidate that thinks killing unborn humans is acceptable.
Title: Re: Are you concerned with American decline?
Post by: PDXTabs on September 14, 2021, 08:55:32 PM
Nor similarly fanatic about caring for the born. There are tons of suffering children around the world and right here in America. The same people that oppose a womanís right to choose also oppose any program to support caring for those children. They donít want their tax dollars touched for head start programs, healthcare, etc that would benefit all the children who are born into poverty.

I am neither pro-life nor Catholic, but when it comes to Pope Francis I'm not at all convinced that this is true. https://www.npr.org/2020/10/04/920053203/pope-francis-laments-failures-of-market-capitalism-in-blueprint-for-post-covid-w
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 14, 2021, 10:47:47 PM
  I'm not Catholic so do not understand the perspective.

The Catholic Church approves of abortions that are necessary to protect the health of the mother.

Oh so the motherís life is more important?


It's a lesser-of-two-evils argument.  The situations where the Catholic Church approves of abortions are those where both the mother and child will die without medical intervention.  I went to Catholic schools but don't know offhand if this argument has evolved over the past 100 years to reflect the advances in medicine that have significantly reduced deaths from childbirth, and I don't dare do a google search, since the results would no doubt lead to some crazy rabbit hole. 
Title: Re: Are you concerned with American decline?
Post by: ExitViaTheCashRamp on September 16, 2021, 02:14:55 PM
As an Englishman, I'm not worried at all. Yes, my pensions and investments are heavily tied up with US companies - I don't need to tell you which. The whole point of index funds is that this doesn't matter though.

 Say in 50 years the long, long promise of South America becoming the centre of the worlds innovation, freedom and military (my parents were told this when they were young in the early 50's) - then as their companies rose Vanguard would start weighting towards them instead. In short, you don't need to diversify and prepare for it as the original post asks - Vanguard will do it for you !
Title: Re: Are you concerned with American decline?
Post by: GuitarStv on September 16, 2021, 03:04:32 PM
You can want to help mothers and children without thinking that forced redistribution thought a government program is the best way to do so.

Seems like an odd argument if you're supporting the current freeloader/tax exempt status of the highly profitable private religious clubs we call "churches".  Every person needs to pay taxes to provide things that we all need (roads, water, police and fire services, public education, etc) through 'forced redistribution'.  By exempting them from paying their fair share, we are redistributing wealth through a government program to churches.

Can't have your cake and eat it too.
Title: Re: Are you concerned with American decline?
Post by: aceyou on September 16, 2021, 04:54:27 PM
Friendly encouragement to start an abortion conversation in a different thread if thatís what you want to discuss on our wonderful finance blog.  Or even better, consider the happiness benefits of just not discussing abortion with random internet strangers.  Cheers.
Title: Re: Are you concerned with American decline?
Post by: ChpBstrd on September 17, 2021, 06:21:47 AM
Or even better, consider the happiness benefits of just not discussing abortion with random internet strangers. 
But I'm changing minds here.
Title: Re: Are you concerned with American decline?
Post by: chemistk on September 17, 2021, 07:18:27 AM
Friendly encouragement to start an abortion conversation in a different thread if thatís what you want to discuss on our wonderful finance blog.  Or even better, consider the happiness benefits of just not discussing abortion with random internet strangers.  Cheers.

I agree with you, and there are plenty of off-topic threads that have within them hearty debates about abortion.

The problem is, that it seems on the forum in general, the endpoint of many topics of conversation that don't explicitly deal with objective financial strategies, hobbies, or personal journals often accelerates quickly to some of the most frustrating and contentious socioeconomic topics of debate.

Given the title alone, birthrate and immigration are two reasonable topics to discuss. When birthrate is brought up, education, welfare, and abortion are logical next steps. Immigration easily ushers in discussions of race/racism, xenophobia, and welfare. Kind of hard to avoid the armchair debate when the initial question is firmly big picture.

ETA- I do understand the OP was specifically looking at hedging strategies, but the fundamental question is far too vague to avoid weekend philosophers.
Title: Re: Are you concerned with American decline?
Post by: former player on September 17, 2021, 07:38:51 AM
Friendly encouragement to start an abortion conversation in a different thread if thatís what you want to discuss on our wonderful finance blog.  Or even better, consider the happiness benefits of just not discussing abortion with random internet strangers.  Cheers.

I agree with you, and there are plenty of off-topic threads that have within them hearty debates about abortion.

The problem is, that it seems on the forum in general, the endpoint of many topics of conversation that don't explicitly deal with objective financial strategies, hobbies, or personal journals often accelerates quickly to some of the most frustrating and contentious socioeconomic topics of debate.

Given the title alone, birthrate and immigration are two reasonable topics to discuss. When birthrate is brought up, education, welfare, and abortion are logical next steps. Immigration easily ushers in discussions of race/racism, xenophobia, and welfare. Kind of hard to avoid the armchair debate when the initial question is firmly big picture.

ETA- I do understand the OP was specifically looking at hedging strategies, but the fundamental question is far too vague to avoid weekend philosophers.
Agreed, but it is also interesting that the discussion started with a question about decline specifically in relation to innovation but subsequent posts have avoided the issue of climate change, which is both a significant engine of potential decline and a potential catalyst for innovation.  Too big an issue for people to get a hold of?  Too much an issue where individuals are concerned about being held to account for their own failings rather than being able to pontificate on the failings of others?
Title: Re: Are you concerned with American decline?
Post by: GuitarStv on September 17, 2021, 08:05:25 AM
Climate change isn't an American decline.  It's unstoppable, will be world wide, and will impact everyone (although unequally, with the poorest being worse hit).  It may actually reduce the impacts of any existing American decline at least initially.
Title: Re: Are you concerned with American decline?
Post by: chemistk on September 17, 2021, 08:12:59 AM
Friendly encouragement to start an abortion conversation in a different thread if thatís what you want to discuss on our wonderful finance blog.  Or even better, consider the happiness benefits of just not discussing abortion with random internet strangers.  Cheers.

I agree with you, and there are plenty of off-topic threads that have within them hearty debates about abortion.

The problem is, that it seems on the forum in general, the endpoint of many topics of conversation that don't explicitly deal with objective financial strategies, hobbies, or personal journals often accelerates quickly to some of the most frustrating and contentious socioeconomic topics of debate.

Given the title alone, birthrate and immigration are two reasonable topics to discuss. When birthrate is brought up, education, welfare, and abortion are logical next steps. Immigration easily ushers in discussions of race/racism, xenophobia, and welfare. Kind of hard to avoid the armchair debate when the initial question is firmly big picture.

ETA- I do understand the OP was specifically looking at hedging strategies, but the fundamental question is far too vague to avoid weekend philosophers.
Agreed, but it is also interesting that the discussion started with a question about decline specifically in relation to innovation but subsequent posts have avoided the issue of climate change, which is both a significant engine of potential decline and a potential catalyst for innovation.  Too big an issue for people to get a hold of?  Too much an issue where individuals are concerned about being held to account for their own failings rather than being able to pontificate on the failings of others?

Although it's certainly an issue so enormous we won't ever understand the big picture until it's too late, I think your second point is more accurate.

To be optimistic though, I try to at least skim through many of the more 'general' topics around the forum and I don't see too many explicit climate deniers here. I suspect Pete himself being an advocate for mitigating climate change helps keep a lot of the would-be vocal deniers off the forum or at least in the shadows.

To be pessimistic and probably realistic, many of us don't want to confront our own failings. It's easy to talk about policy and alternative energy from a 10,000 foot view but when each of us is faced with the fact that we make suboptimal decisions on a near-daily basis, it becomes much more difficult to talk about strategies that actually work when we know we're not actively participating.

It may sound like I paint with a broad brush, but I am in no means trying to suggest that there aren't plenty of folks around here who are much, much more diligent about affecting positive change on a personal level. There are plenty, and I sincerely applaud and appreciate their effort.

All that said, a country's current and future performance is a wildly complex machine so ignoring birthrate, healthcare, immigration, education, etc. would be disingenuous to the topic even if climate is the shadow looming over all of them.
Title: Re: Are you concerned with American decline?
Post by: maizefolk on September 17, 2021, 08:22:47 AM
To be optimistic though, I try to at least skim through many of the more 'general' topics around the forum and I don't see too many explicit climate deniers here. I suspect Pete himself being an advocate for mitigating climate change helps keep a lot of the would-be vocal deniers off the forum or at least in the shadows.

I think you're right but I would add that I work in a part of the economy where there used to be lots of people who denied global warming, and in the last 1-4 years it seems to have largely vanished. Do you still run into many folks "in the real world" who claim the climate isn't changing?

Note: I still run into plenty of people who think we cannot do anything to slow or stop it, or think it's not worth doing anything to slow or stop it. So it's not all sunshine and roses. But at least plans for local/regional level resilience and the planning challenges of knowing we're designing stuff today for a climate in 2030 or 2040 that we don't yet have access to don't seem to run into objections of "it's all a hoax!" in my particular pocket of the world anymore.
Title: Re: Are you concerned with American decline?
Post by: caleb on September 17, 2021, 10:01:30 AM

Note: I still run into plenty of people who think we cannot do anything to slow or stop it, or think it's not worth doing anything to slow or stop it. So it's not all sunshine and roses. But at least plans for local/regional level resilience and the planning challenges of knowing we're designing stuff today for a climate in 2030 or 2040 that we don't yet have access to don't seem to run into objections of "it's all a hoax!" in my particular pocket of the world anymore.

Yes, and I think it's a more honest and forthright version of the discussion we've always been having.

The general public was never able to use evidence to dispute climate change.

Denialism was a crude version of hiding under the covers to avoid going to work: if I can't see the sun rise, it's not rising.

Now they've cut to the chase and basically said they don't care if climate change is happening or not, either way they don't want to do anything about it.
Title: Re: Are you concerned with American decline?
Post by: chemistk on September 17, 2021, 10:11:34 AM
To be optimistic though, I try to at least skim through many of the more 'general' topics around the forum and I don't see too many explicit climate deniers here. I suspect Pete himself being an advocate for mitigating climate change helps keep a lot of the would-be vocal deniers off the forum or at least in the shadows.

I think you're right but I would add that I work in a part of the economy where there used to be lots of people who denied global warming, and in the last 1-4 years it seems to have largely vanished. Do you still run into many folks "in the real world" who claim the climate isn't changing?

Note: I still run into plenty of people who think we cannot do anything to slow or stop it, or think it's not worth doing anything to slow or stop it. So it's not all sunshine and roses. But at least plans for local/regional level resilience and the planning challenges of knowing we're designing stuff today for a climate in 2030 or 2040 that we don't yet have access to don't seem to run into objections of "it's all a hoax!" in my particular pocket of the world anymore.

I definitely encounter fewer overt deniers. A handful of people shifted from outright deniers to having some level of actual concern, which was both surprising and encouraging.

Still, the groans and eyerolls and generalized skepticism is still there. Among those I know who have the means to take steps in their daily life, inertia drives their denialism. As it's been mentioned before, most people really don't want to willingly reduce their standard of living in the present to preserve that same standard in the future - let alone the fact that it could actually lead to a better standard of living in the future. Some are just plain selfish, and don't see the need to change knowing that they'll die childless (and thus no vested interest in what happens to the planet) before the worst climate effects occur.
Title: Re: Are you concerned with American decline?
Post by: ChpBstrd on September 17, 2021, 12:37:01 PM
Denialism was a crude version of hiding under the covers to avoid going to work: if I can't see the sun rise, it's not rising.

Now they've cut to the chase and basically said they don't care if climate change is happening or not, either way they don't want to do anything about it.

Perhaps this cuts to the core of why people are pessimistic about their society. We are so spoiled that we don't care whether our opinions and information sources are factually accurate or not. We're not motivated to live in alignment with reality and discover inconvenient truths because that's harder than finding a social media tribe and trolling the opponents. When proven wrong beyond all reasonable doubt, people can just question the sources, invent a conspiracy theory, or fall back to a position they don't have to defend - such as dispensing with the social norm that we should care about all the millions of people who will starve due to climate change. That's what it means to be unaccountable on the internet.

COVID causing you anxiety? Just decide it's blown out of proportion by the dishonest media, and the anxiety is relieved!

Our world is much different than the one where believing the wrong things about seeds could result in starving to death, where believing the wrong thing about people could get you killed or imprisoned, where epidemics kill entire villages, or where social cooperation was the alternative to poverty or death. People would have to get more pragmatic and intellectually disciplined quick if those conditions ever returned. Thus decline would be required to relieve the conditions that led to decline, and it would be hard for us to keep getting more stupid while still thriving and coasting along on the depreciating systems of the past.
Title: Re: Are you concerned with American decline?
Post by: chemistk on September 17, 2021, 01:03:08 PM
Denialism was a crude version of hiding under the covers to avoid going to work: if I can't see the sun rise, it's not rising.

Now they've cut to the chase and basically said they don't care if climate change is happening or not, either way they don't want to do anything about it.

Perhaps this cuts to the core of why people are pessimistic about their society. We are so spoiled that we don't care whether our opinions and information sources are factually accurate or not. We're not motivated to live in alignment with reality and discover inconvenient truths because that's harder than finding a social media tribe and trolling the opponents. When proven wrong beyond all reasonable doubt, people can just question the sources, invent a conspiracy theory, or fall back to a position they don't have to defend - such as dispensing with the social norm that we should care about all the millions of people who will starve due to climate change. That's what it means to be unaccountable on the internet.

COVID causing you anxiety? Just decide it's blown out of proportion by the dishonest media, and the anxiety is relieved!

Our world is much different than the one where believing the wrong things about seeds could result in starving to death, where believing the wrong thing about people could get you killed or imprisoned, where epidemics kill entire villages, or where social cooperation was the alternative to poverty or death. People would have to get more pragmatic and intellectually disciplined quick if those conditions ever returned. Thus decline would be required to relieve the conditions that led to decline, and it would be hard for us to keep getting more stupid while still thriving and coasting along on the depreciating systems of the past.

I'd argue it's loss aversion, but scaled up to a societal proportion. Why give up what you already have when you can play the odds and hope that you don't end up with the short straw.

Dovetails right into our (human behavior) inability to process information on a large scale. Better to be ignorant and maintain the status quo than to give up something we already have that we will likely never see come to fruition.
Title: Re: Are you concerned with American decline?
Post by: caleb on September 17, 2021, 02:27:22 PM
Perhaps this cuts to the core of why people are pessimistic about their society. We are so spoiled that we don't care whether our opinions and information sources are factually accurate or not.

Yes, and while I do think the anti-empiricism is especially evident on the American right at the moment, it's also differently present on the political left.

On the left, there are all manner of social questions where the conclusions are unassailable, and any empirics to the contrary are marginalized.  The correlations of race to standardized test scores are good examples.  The criticisms of these tests aren't directed at making the instruments more accurate so that we can better identify high and low performance, they're condemnations of the very practice of measuring.

Whether it's coming from vulgar forms of libertarianism or anti-racism, our collective unwillingness to begin our discussions by establishing a shared set of facts may very well be our undoing.
Title: Re: Are you concerned with American decline?
Post by: JGS1980 on September 17, 2021, 02:46:01 PM
I strongly resent the implication that not having 6 kids is the same thing as embracing a "culture of death".

You have just lost a fuck ton of respect from me with that comment.

I was reading along and just suddenly was - what the hell does that even mean?

What is a "culture of death"? I don't get it. Is it a reference to birth control? abortion? Living a child free life by choice and then you die? I've not a clue.
Maybe he thinks anyone who hasn't had 6 kids must have had 6 abortions instead?

I'm glad you've given me the benefit of the doubt here. But to answer your original question when I refer to a "culture of death" I refer to abortion and the general idea that life is disposable if it's not wanted. This applies to assisted suicide as well. I realize that has nothing to do with demographics and population growth but it's the same side of the coin. If someone think it's ok to end a life in the womb they probably think it's ok to end the life of someone who is sick or old - or allow a third-party to do so. I am Catholic and so I believe that all life should be protected from conception to natural death. My wife and I embrace life which naturally leads to having children every few years. I realize that is a fringe view in society today, and even more so on this forum which tends to lean left. However, I'll leave it at that. This isn't in the off topic forum so I see no need to rehash those debates here. I have my beliefs, you have yours, and we can continue discussing if the US is in a long-term decline that will affect investment prospects going forward. As the saying goes: "demographics is destiny". I think the US has a better destiny in this regard than most of the world so I am not as concerned about long-term decline - at least not within my lifetime and investing timeframe.

Maybe my memory is failing me, but don't you work for the U.S. Military?

Hahahahaha. This made me laugh awkwardly loud in my office.

In all seriousness, I appreciate and respect @Michael in ABQ 's religious beliefs and approach to raising a large and happy family. To each his or her own. I have a few myself.

I would gently disagree with his viewpoints on birth control and what he considers to be the merits of a "natural death".  In regards to birth control, this wonderful creation in the 60's has led to improved quality of life and has brought billions of people out of poverty worldwide (including hundreds of millions of Catholics).  As for death and dying, trust me when I say that there ain't nothing natural about how we end our days in modern American society.  Go walk through any ICU dealing with Covid19 and tell me what you see that's natural.  If I'm on my last legs, I'll be the first to get in line for a "little assistance" to prevent months of abject misery prior to an ignoble death.

JGS
Title: Re: Are you concerned with American decline?
Post by: RunningintoFI on September 17, 2021, 08:27:13 PM
I think if 2020 has taught us anything it is that we don't know anything about how the future will play out.  I worry a lot less about American decline than I do about my own decline.  At least one of those I can partially control. 
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 21, 2021, 08:34:38 PM
When birthrate is brought up, education, welfare, and abortion are logical next steps. Immigration easily ushers in discussions of race/racism, xenophobia, and welfare. Kind of hard to avoid the armchair debate when the initial question is firmly big picture.

...and my original comment was the dilemma surrounding professionals - who can financially afford to raise large families without government aid - only very rarely doing so.  A noteworthy recent example is Supreme Court Justice Amy Coney Barrett, whose husband is also a high income earner, and who are raising seven children.  I recall reading an article written during her 2020 nomination by a zero-child feminist that was pretty nasty, but I'm not sure that I could easily find the link to post here so I'm not going to. The gist was that she can only afford to raise 7 kids because she and her husband both have professional wages...which is my point. This same writer didn't dare to to knock all of the guys out there working in low-wage warehouses or not working at all who have 10+. Yes, I know some of these guys.  One has two sons with the same name (his) because two different women named their kids after him (he's quite the minimum wage charmer, apparently). 

Another anecdote - I have a relative who was fired by the owner of his company from a professional job for having a child before he was married.  This was back in 1978, so really not that long ago, but now YOU'RE the one with the problem (like, you're going to lose your job) if you criticize someone who has a kid out of wedlock or before they are able to provide for them without government help.

Without a doubt, we live in a society where many attitudes have flipped 180 degrees in the last 10-15 years.  The religious right lorded over national affairs from WWII until quite recently.  But since 2010 or so, helped along by the outrage algorithm, the secular left has ascended to judge & jury of our society's morals. 
Title: Re: Are you concerned with American decline?
Post by: Abe on September 21, 2021, 09:11:04 PM
As someone who's not strongly attached to this country, I'm pretty much sure it will decline to some extent. Or at least putter along in non-greatness. Inequality and the associated social divisions will remain high and easily exploited. This will be exacerbated by climate change. Everything else are relatively minor issues on a societal level (except maybe abortion - see any country with severe restrictions or lack of birth control options. Take it from me, you do not want to live in one of those places regardless of how much you love children).

My main concern about American decline is how much mental energy people of whatever political affiliation spend trying to convince the others they are right about one thing or other on the internet. The left is spending too much effort convincing individualists to care about the collective. The right is spending too much time worrying about moral purity. No one is going to change their mind at this point, so it's a zero-sum game for control.

The courts and legislatures are where it counts! More financing campaigns and less yapping, people! (only somewhat sarcastic).

Anyway, we will be fine. By we I mean rich people. I assume everyone on this forum is working to becoming rich, correct? If you care about non-rich, bad news: the rich control this country and don't care about your concerns. Thus the hard slog on that front. Again, more financing non-profits and less yapping! They're the sore losers' consolation prize because they can only help and not control people.

My overall (simplistic) assessment is that this country will never be a socialist society. Large portions of the population will actively dislike one another forever. However, things that make people snap at each other less are: 1) wealth and 2) energy. We've decided on how to distribute wealth already, we just need to increase it overall in less harmful ways. If we can increase our total energy in less harmful ways then the cost for many subsistence-level things will drop significantly. Maybe then people can focus more on solutions to priority #1. It's a trickle-up economic theory: fix the basic flaws in one's economic system and then we can fix other flaws built on them.

This is all coming from a place of economic (but not ethnic) privilege, so feel free to poke holes in the above theory to fix the problems. It's probably too pollyanna.
Title: Re: Are you concerned with American decline?
Post by: chemistk on September 22, 2021, 06:39:37 AM
When birthrate is brought up, education, welfare, and abortion are logical next steps. Immigration easily ushers in discussions of race/racism, xenophobia, and welfare. Kind of hard to avoid the armchair debate when the initial question is firmly big picture.

...and my original comment was the dilemma surrounding professionals - who can financially afford to raise large families without government aid - only very rarely doing so.  A noteworthy recent example is Supreme Court Justice Amy Coney Barrett, whose husband is also a high income earner, and who are raising seven children.  I recall reading an article written during her 2020 nomination by a zero-child feminist that was pretty nasty, but I'm not sure that I could easily find the link to post here so I'm not going to. The gist was that she can only afford to raise 7 kids because she and her husband both have professional wages...which is my point. This same writer didn't dare to to knock all of the guys out there working in low-wage warehouses or not working at all who have 10+. Yes, I know some of these guys.  One has two sons with the same name (his) because two different women named their kids after him (he's quite the minimum wage charmer, apparently). 

Another anecdote - I have a relative who was fired by the owner of his company from a professional job for having a child before he was married.  This was back in 1978, so really not that long ago, but now YOU'RE the one with the problem (like, you're going to lose your job) if you criticize someone who has a kid out of wedlock or before they are able to provide for them without government help.

Without a doubt, we live in a society where many attitudes have flipped 180 degrees in the last 10-15 years.  The religious right lorded over national affairs from WWII until quite recently.  But since 2010 or so, helped along by the outrage algorithm, the secular left has ascended to judge & jury of our society's morals.

I agree with your original assertion - I'd rather see people with means, regardless of background, want to have children. I'd also like to see comprehensive sex ed be mandatory, and to enable easy access to contraception for teens and young adults.

If the last point of your comment above is to suggest that we've become wayward because the moral arbiters are no longer rooted in faith, I have to heartily disagree. I was raised Lutheran, married into a Catholic family, and still attend Mass with my wife - there are a few wonderful souls from each of the churches I've attended who would be thoughtful leaders   but by-and-large the presumption that Christians (or any religious group, really) are entitled to evangelize their interpretation of their sacred text in order to guide the morals of society is just plain unpalatable. I'd rather see collectivist morality, advised by the better teachings from each religion, but tempered in such a way that no one religion or group has control over others as so many are eager and apt to do. And before anyone jumps down my throat, I do understand that many religions are built on the presumption that salvation (or whatever equivalent they work toward) is only possible when the entire world has been converted to your own point of view.

Back on the topic of the thread and to an earlier point you made - while life may be 'easy' for a lot of people in this country, we still have too many living in poverty - especially children and the elderly. If we can't, as a society, even take care of those people because we look at poverty as a moral failing, then yeah we're riding the train of American Decline.
Title: Re: Are you concerned with American decline?
Post by: BicycleB on September 22, 2021, 08:40:57 AM

Another anecdote - I have a relative who was fired by the owner of his company from a professional job for having a child before he was married.  This was back in 1978, so really not that long ago, but now YOU'RE the one with the problem (like, you're going to lose your job) if you criticize someone who has a kid out of wedlock or before they are able to provide for them without government help.

Without a doubt, we live in a society where many attitudes have flipped 180 degrees in the last 10-15 years.  The religious right lorded over national affairs from WWII until quite recently.  But since 2010 or so, helped along by the outrage algorithm, the secular left has ascended to judge & jury of our society's morals.

Interesting anecdote and comment. I agree there has been a shift. Moral high ground is something that a lot of people care about, and agreement as to what that is and who defines it remains elusive.

Both "sides" are fervent. No one's conceding anything yet. At most people losing a particular fight are grumbling to their friends and looking for a way to win next time.

Will the new modes of moral censure prove more or less effective economically than the old? (I'm guessing about the same, or slightly lower.) But should I be concerned about morality itself and measure "decline" accordingly, or just focus on economics?

I do think morality as shown in the conditions of society experienced by each person is important. In the morality realm though I'm less concerned about which side in the culture debate holds the high ground and more concerned about government being trustworthy, efficient, effective. To me there is a real question as to whether our divided politics will lead to govt that becomes increasingly untrustworthy. That's the mechanism for decline that I worry about.
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 22, 2021, 09:19:17 AM
Will the new modes of moral censure prove more or less effective economically than the old? (I'm guessing about the same, or slightly lower.) But should I be concerned about morality itself and measure "decline" accordingly, or just focus on economics?


Without a doubt, a sort-of moral code brings people together to post on this site.  The people here, overwhelmingly, lead pretty conservative lives.  Minimal/zero alcohol, drugs, philandering, gambling, orchestrating scams, etc.  I trust that people here are somewhat healthier than the general population due to less restaurant food and more hiking/bicycling.  People here are quietly "winning" in the realm of personal finance in large part because they are in control of their emotions.  Most of this overlaps pretty neatly with traditional Christian and Jewish values (and probably others that I have no detailed knowledge of). 

Popular culture will never celebrate such behavior because they can't sell anything to this demographic.  I think it's hard for those of us born in the pop culture era - even for those of us who watched minimal TV and movies - to understand how much of a challenge it presented to the order maintained by religious and ethnic customs. This corresponded with the move off the farm, and later out of factories, and into the super-easy office work that at least half of Americans perform. 
Title: Re: Are you concerned with American decline?
Post by: index on September 22, 2021, 02:18:37 PM
The treasury has been printing the USD for over a decade now and other countries with major currency have followed. We have been seeing hard asset inflation for years as there are more and more dollars. Look at the S&P denominated in gold instead of USD:

(https://i.postimg.cc/sD96bfNm/2021-09-22-15-54-28-S-P-500.png)

or longer term:

(https://i.postimg.cc/XNxBPTgF/2021-09-22-15-59-08-S-P-500.png)

Here is a really interesting chart showing inflation in the housing market:

(https://i.postimg.cc/dQRjVHjt/2021-09-22-15-57-24-US-Home-Prices.png)

And what does this mean for us? You want to own hard assets and not USD. Own shares of VTI, real estate, gold, etc. Use USD as a means of exchanging hard assets for hard assets. People feel rich because they can buy more disposable items at Walmart and Amazon, but home (hard asset) affordability is a problem:

(https://i.postimg.cc/ZYfFN921/2021-09-22-16-06-32-US-Disposable-Income.png)

All this is to say - be careful in how you are valuing your investments and measuring economic decline.


 
Title: Re: Are you concerned with American decline?
Post by: jmecklenborg on September 22, 2021, 02:41:02 PM
Look at the S&P denominated in gold instead of USD:

This chart does not appear to include dividend income or dividends reinvested.  Gold doesn't pay dividends, and in fact costs money to store.  A house can pay dividends if you collect rent on a spare bedroom.  It also pays indirect dividends to the larger family when a relative or adult child moves back in for a period of time. 

Quote
All this is to say - be careful in how you are valuing your investments and measuring economic decline.
 

The printing of money, and the need for that money to go somewhere, is without a doubt causing people to "feel" rich, and therefore spend more freely, and therefore create real economic activity. 

Title: Re: Are you concerned with American decline?
Post by: index on September 22, 2021, 08:22:18 PM
Look at the S&P denominated in gold instead of USD:

This chart does not appear to include dividend income or dividends reinvested.  Gold doesn't pay dividends, and in fact costs money to store.  A house can pay dividends if you collect rent on a spare bedroom.  It also pays indirect dividends to the larger family when a relative or adult child moves back in for a period of time. 

Quote
All this is to say - be careful in how you are valuing your investments and measuring economic decline.
 

The printing of money, and the need for that money to go somewhere, is without a doubt causing people to "feel" rich, and therefore spend more freely, and therefore create real economic activity.

I'm not arguing to invest in gold by any means. VOO/VTI is a superior asset.  I am just making the case the returns on the price index in terms of gold is up 12% versus 350% in usd since 2006. Meanwhile, another hard asset, housing,  has performed very similarly to gold. You feel rich because there are more usd and goods that are easily moved around the world are increasing in price relatively slowly because of foreign demand for dollars. A house costs roughly the same number of vti shares as it did in 2006.
Title: Re: Are you concerned with American decline?
Post by: FLBiker on September 23, 2021, 05:37:07 AM
I'm not arguing to invest in gold by any means. VOO/VTI is a superior asset.  I am just making the case the returns on the price index in terms of gold is up 12% versus 350% in usd since 2006. Meanwhile, another hard asset, housing,  has performed very similarly to gold. You feel rich because there are more usd and goods that are easily moved around the world are increasing in price relatively slowly because of foreign demand for dollars. A house costs roughly the same number of vti shares as it did in 2006.

That's an interesting way of looking at things that I hadn't considered before.  Thanks!  I suspect the same (or similar) is true here in Canada, where houses have increased in price (in terms of Canadian dollars) very dramatically.