What defeats your rebuttal in this case to me is that the 50-60% implied rate of continued success is still "good enough" based on his original argument.
[snip]
Coupling this with the idea that most things (like food) should have a significant loss in relative value (thus becoming more affordable as per prev. discussion in this thread) . . then I would logically conclude that my government would just increase taxes . . successfully allowing our game to continue.
[snip]
Maybe we could expand into a more detailed breakdown? Do you have any more examples?
Short answer: ask the Wiemar subsequently Nazi Germans how it worked out for them.
Longer answer: taxing over the Laffer limit during an economic downturn is not an equilibrium. Capital is hoarded, it spirals downward into an abyss, and everything grinds to a halt. See the prior post I made which had a link to a
blog post by Martin Armstrong which elaborates on that. The 47% technological unemployment predicted by Oxford U, can have multiple outcomes.
- Govt dissolves itself, we radically increase knowledge networking, everyone finds a new job. Yahoo!!
- Govt gets involved taxing, we use anonymity to dissolve govt and radically increase knowledge networking, everyone finds a new job. Yahoo!!
- Govt stays involved but not higher taxes, we don't figure out how to accelerate knowledge networking for most, so 47% unemployment.
- Govt gets involved by taxing, capital goes into hiding, the unemployment goes to 80% (other 20% work as thugs for the govt) and we euthanize everyone.
The range of outcomes is some where between those in varying degrees.
Why does the government involvement matter on who finds a new job in high tech? Because for as long as the government will give you everything for free, why should the masses be bothered!
This another reason there aren't more plumbers. No one has to do unglamorous jobs, because Obama and Europe and Canada provide social safety nets. Heck in Europe you only have to work 35 hours a week, you can't be fired, and you get 1 or 2 months paid vacation a year. And in some countries, they sleep in the office lounge chair in the afternoon or go to meetings at a fine restaurant.
Meanwhile lately I'm working 14-18 hours a day, haven't had a shower in 2 months, haven't shaven, wearing the same stinky short pants for past 3 months since my washing machine isn't at this location, and eat tuna fish sandwiches so I don't have to leave the cave. I am a managing to get my jogs and sprints in, and still seem to attract the ladies when I do out to eat looking and smelling like a stinky caveman. Thank God I am in a country where the women love to eat stinky dried fish. I swear it seems they can't even smell it, whilst my odor is intoxicating me while I am trying to move away ("stay back, this cave dwelling beast is not fit for human consumption at this time").