{"id":10998,"date":"2019-03-29T17:49:54","date_gmt":"2019-03-29T17:49:54","guid":{"rendered":"http:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/e-commerce\/thanking_moores_law_for_government_debt.html"},"modified":"2022-10-14T18:29:04","modified_gmt":"2022-10-14T22:29:04","slug":"thanking-moores-law-for-government-debt","status":"publish","type":"post","link":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/technology\/thanking-moores-law-for-government-debt.html","title":{"rendered":"Thank Moore’s Law For Government Debt"},"content":{"rendered":"

\"historical<\/a>
During the Carter administration, the interest rate was 18% or higher in the. The Federal Reserve at the time had to keep rates high to fight inflation – the dual mandate of the Fed is to keep inflation low and employment high.<\/p>\n

Interestingly, in recent history, these were opposing goals. By definition, high-employment leads to upward wage pressure which in-turn causes inflation.<\/p>\n

\"bigstock-Young-Man-Using-A-Laptop-Build-228480655.jpg\"<\/a><\/p>\n

Moreover, government spending is stimulative which historically causes inflation. Lately, government spending is through the roof yet inflation is low or relatively tame.<\/p>\n

Consider, the U.S. federal government spent<\/a> $1,822,712,000,000 in the first five months of fiscal 2019<\/a>, the most it has spent in the first five months of any fiscal year since 2009, which was the fiscal year that outgoing President George W. Bush signed a $700-billion law to bailout the banking industry and incoming President Barack Obama signed a $787-billion law to stimulate an economy then in recession.<\/p>\n

France, is about to pass<\/a> Italy as fourth most indebted country. According to Bloomberg<\/a>:<\/p>\n

\n
Italy remained the holder of Europe’s biggest public-debt burden in 2018 even after France’s rose to almost match it. France’s debt reached 2.3153 trillion euros ($2.62 trillion), just 1.4 billion euros below its southern neighbor’s. Italy’s debt as a ratio of economic output — 132.1 percent of GDP — is also the second-biggest in the euro region after Greece, and still much higher than France’s 98.4 percent.<\/div>\n<\/blockquote>\n
Interestingly, inflation isn’t also through the roof and we can thank Moore’s Law for that. There is full employment, upward wage pressure and low inflation.<\/p>\n

We’ve mentioned how low inflation is a byproduct of tech before<\/a>. Amazon allows us access to products with very low margins and brutal efficiency. Google gives us free services by the dozen – there seems to be no limit to the new free or low-cost services we have access to.<\/p>\n

Adjusted for inflation, some phone calls made 20 years ago of very poor quality, cost us over $10 per minute. They are now free, HD quality and offer video and multiparty capabilities.<\/p>\n

Today’s surround sound systems and TVs are better than movie theatres of a few decades back.<\/p>\n

A smartphone can cost a few hundred dollars and replace hundreds or thousands of dollars worth of equipment and services. No more need for a paper calendar, desk phone, still camera, video camera, film, film processing center, stereo system, flashlight, calculator, etc.<\/p>\n

But most importantly, cloud is responsible for taking a machete to investment costs when launching a startup. App stores torch investments in distribution. APIs reduce the cost of building it all yourself.<\/p>\n

AI and ML are like steroids being injected into the data economy. Historical customer interactions have never been so valuable.<\/p>\n

In all, tech and Moore’s Law have changed the world in so many ways that the global economy seems to be able to live beyond its means like never before. <\/p>\n<\/div>\n

How long it can last is unknown but for the moment, tech is really allowing the global population to live a more lavish lifestyle than it can currently pay for.<\/p>\n","protected":false},"excerpt":{"rendered":"

During the Carter administration, the interest rate was 18% or higher in the. The Federal Reserve at the time had to keep rates high to fight inflation – the dual mandate of the Fed is to keep inflation low and employment high. Interestingly, in recent history, these were opposing goals. By definition, high-employment leads to upward<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1682,118],"tags":[],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/posts\/10998"}],"collection":[{"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/comments?post=10998"}],"version-history":[{"count":1,"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/posts\/10998\/revisions"}],"predecessor-version":[{"id":11053,"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/posts\/10998\/revisions\/11053"}],"wp:attachment":[{"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/media?parent=10998"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/categories?post=10998"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.tmcnet.com\/blog\/rich-tehrani\/wp-json\/wp\/v2\/tags?post=10998"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}