Economists: Y2K bug not likely to be deadly

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Economists: Y2K bug not likely to be deadly

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NEW YORK (AP) - The Year 2000 bug will not likely cause permanent damage to the U.S. economy, a senior government official and private-sector economists said Monday.

Charles Steindel, senior vice president for the Federal Reserve Bank of New York, said businesses may face disruptions from changed buying routines, however.

Many companies are bulking up on inventory in case of problems with the supply chain. If no Y2K trouble emerges, those businesses are likely to curb buying early next year - a fluctuation that Steindel called mild.

At a special Senate hearing here, he likened this accumulation to an ``approaching storm that fails to strike.'' And should computer trouble emerge - the storm actually hits - resources will be diverted to fixes and recovery, and the economy will then return to normal.

The Senate Special Committee on the Year 2000 Technology Problem is holding hearings around the country to assess Y2K readiness. The bug stems from a common programming practice that uses only two digits for the year. Computers that are not updated could misinterpret ``00'' as 1900, creating potential problems ranging from billing errors to power outages.

The committee's chairman, Sen. Robert Bennett, R-Utah, warned that business and government leaders simply do not know whether preparations are adequate and projections accurate.

Bennett raised concerns about disruptions abroad affecting U.S. businesses, noting that auto companies might not get foreign parts needed and consumers might not get fresh produce from countries such as Chile. He added that much of the petroleum Americans use come from countries ``that are wholly unprepared.''

This may affect the United States, he warned. ``The question is, 'How much?'''

But William Dudley, director of the U.S. Economic Research Group at Goldman Sachs & Co., said U.S. businesses are generally not dependent on those least prepared countries.

Most of the Y2K impact, he said, will result from precautionary efforts to build inventory. ``Y2K will have noticeable but far from cataclysmic effects on U.S. growth,'' he added.

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Snip:

"The Year 2000 bug will not likely cause permanent damage to the U.S. economy, a senior government official and private-sector economists said Monday."

Hmmmm, I wonder what they consider "PERMANENT DAMAGE" ???

Ray

-- Ray (ray@totacc.com), October 25, 1999

Answers

Ray, doesn't that one line say it all. I mean just that line should put a cold shiver in so many peoples hearts, but it doesn't.

Imagine someone telling you that you might be fired in 6 months from your job and you should start looking for a new job but you say "Its going to be ok" and do nothing. Six months later BAMM, you're fired and you walk around in shock, incapable of believing it was true even though you had time to ponder the possibilities, make alternative plans or look for a new job just in case.

Even if Y2k wont be TEOTWAWKI, its amazing how few people have any emotion at all when they see lines like the one you quoted.

-- hamster (hamster@mycage.com), October 25, 1999.


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