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Home Publications Blogs Beat the Press The Congressional Budget Office Doesn't Believe Robots Will Take Our Jobs

The Congressional Budget Office Doesn't Believe Robots Will Take Our Jobs

Friday, 28 February 2014 06:22

The elite policy types in the United States are truly extraordinary in their ability to show great concern about completely contradictory possible states of the world. Floyd Norris shows one of the bases for serious hand wringing, higher future budget deficits, as projected by the Congressional Budget Office (CBO) in its latest outlook. Norris points out that the report assumes that the weak economic growth of recent years persists long into the future. (Norris notes CBO has badly erred before by extrapolating from the recent past, noting its projections from 2001 that assumed the stock bubble would persist into the indefinite future -- a point some of us noted at the time. However, its biggest error was failing to recognize that the housing bubble's collapse would tank the economy.) 

However more important than CBO's checkered track record is the fact that CBO's assumption of slow growth and slow productivity growth is 180 degrees at odds with the robots will take our jobs story. If robots are taking our jobs, then productivity growth will be fast, inflation will be very low (goods and services will be getting cheaper), and presumably interest rates will also be low. While it is possible that CBO's forecast will be right, if it is then the robot story is wrong and vice versa. That's the simple logic, but elite policy types are such impressive sorts that they can worry about both fast and slow growth simultaneously being a problem.

Comments (6)Add Comment
written by djb, February 28, 2014 6:07
The idea of sharing the wealth is a sin in their vocabulary....... that is why some of them are scared of robots..... if the robots start making everything then everyone will lose their job....then what will we do?????

written by djb, February 28, 2014 6:11
I think that's their quandry

Some of them wouldn't even worry about that
I'm a bit uncomfortable with the system
written by Dave, February 28, 2014 9:56
I can actually believe that robots will have a pretty significant effect upon our economic future, taking many, many jobs. I also recognize this as human progress, which in theory should allow us to live better, more relevant lives and better retirements.

What I worry about is our system's ability to distribute the gains from such changes. I don't see any sign that the human species can come to grips with collective progress for what it is -- collective progress. If this species can't even acknowledge that this was a collective effort, what are the chances it can decide that the people lucky enough to buy a robot or 2 are not superior beings to the rest of us?

I choose not think about it, because I think the solutions will be -- collective -- in nature, beyond my ability to comprehend the complete solution within our political framework.

Just how is this supposed to happen? The enlightned despotism of monopolists?
written by Perplexed, February 28, 2014 10:25
-"...(goods and services will be getting cheaper)..."

Not when they're protected from capitalism by government granted monopolies they won't. How exactly is this supposed to come about? The last 30 years certainly shows that prices driven by optimizing monopoly profits doesn't really get the job done; it just re-distributes income from all consumers to monopolists.

High productivity but low employment
written by Lord, February 28, 2014 2:07
With low growth overall as robots are produced to displace labor but no more than necessary to prevent prices from falling much and maintain monopoly rents.
But it said so in the comic books ....
written by Benedict@Large, March 02, 2014 7:24
Since the beginning of my professional career over 40 years ago, I've been entertained by predictions in one form or another that machines would replace us. Before then, it was sci-fi books saying it, and before then it was comic books. All of it, nonsense. No matter how much the machines do, there will always be more things that only humans can do than there will be humans available to do them.

Here's what's happening, people. This "machines are replacing us" meme is just the latest attempt by the elites to find an excuse why it's not a lack of aggregate demand that's leaving so many of us idle. Either that, or machines suddenly got really good at the exact same time Lehman collapsed. And what a coincidence that would be.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.