I have heard that the national expenses for the Y2k will run in the billions. One source said the government will be spending about 25% Of the their budget fixing the Y2K bug. Nationally, this must be a significant percentage of our GDP. What is the likely effect on our economy when we're moving billions from productive business to fixing the bug (i.e. nonproductive work). It seems this could spell recession in and of itself. Is anyone talking about this??

-- audrey (aai@adelphia.net), October 15, 1998

Answers

Your numbers are way out of whack. Its 25% of the IS budget, not 25% of the budget. (WOW I kinda wish it was - that kind of money would run my salary up to six or seven figures - always wanted a Austin- Healy ;-) )

-- Paul Davis (davisp1953@yahoo.com), October 16, 1998.

If everything gets fixed, we still get a recession. When was the last time that the cost of business was not passed on to the consumer?

Actually I think we are starting to slide already.

-- areseejay (areseejay@aol.com), October 16, 1998.

The 'Economist's Y2K issue had an interesting graph of this. There was a big peak in spending pre-2000, an exactly corresponding dip post-Y2K, and things settled down much as before by 2001.

No, I don't believe it. The truth is that nobody knows. Economists don't even understand "normal" circumstances (witness the current financial shennanigans), let alone massively abnormal ones.

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), October 20, 1998.