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>The USA economy is clearly weak by any of its own measures I'm sympathetic to your greater point about keeping interest rates low, but it's simply not true th
by tedsanders 11y ago
>The USA economy is clearly weak by any of its own measures
I'm sympathetic to your greater point about keeping interest rates low, but it's simply not true that the US economy is weak by any of its own measures. The US economy is strong by many of its own measures:
US GDP is at its all-time high, $18 trillion. It has NEVER been higher.
The S&P 500 is near its all-time high, sitting around $2,000. Before last year, the S&P 500 had NEVER been higher.
For the past six quarters, US real GDP has been growing at about 3.0% annualized, far faster than the historical 1.9% annualized that the US experienced from 1860 to 2007 (a time period over which technology improved massively and the US became a global superpower).
US unemployment is down to 5%, back to the levels during the pre-recession boom.
By many, many measures, today's US economy is the strongest economy that humankind has ever seen. Certainly, the US economy is not as strong as it could be. And certainly, it would be nice if more people were employed. But overall, the US economy is doing better than ever.
- Shivetya 11y agothe unemployment is what the government makes it out to be, the number employed is a better measure. when you look at the number who could hold jobs or full time jobs where they do not the number doesn't look that great (this means, avoid that silly number some like to throw out of ninety plus million as that includes retirees and college kids)
- rayiner 11y agoI'm not really convinced by this argument. If more families than ever can send their kids to college (I.e. four year vacation), instead of working during that time, how is that a bad thing? Is it better if disabled people are trying to support themselves instead of being out if the workforce and being in SSIDI?
- SilasX 11y agoOne word: Arms-race. If everyone has to signal what percentile of competence they are, and you offer cheap loans to people who provide a certain signal, then everyone will start having to buying the service that send that signal. People are collectively blowing a lot of resources to signal the same thing (and irrespective of how much they value having such a vacation). Scott Alexander provides a great exposition of that dynamic in "Against Tulip Subsidies": http://slatestarcodex.com/2015/06/06/against-tulip-subsidies/ http://slatestarcodex.com/2015/06/06/against-tulip-subsidies...
- tptacek 11y agoA benchmark doesn't have to be perfect in isolation to be valuable relative to previous measurements. Has something changed about the economy to break this metric?
- jblow 11y agoS&P is measured in nominal dollars, so of course it is near its all-time high. It should almost always be at its all-time high just because of inflation. So this doesn't tell you much.
- tedsanders 11y agoSure, ok. But even adjusting the S&P 500 for CPI inflation, it's near all time highs. And if we're going to be careful, you have to also take dividend reinvestment into account, which has the opposite effect of inflation. Neglecting dividend reinvestment will cause indices underestimate the true growth of a dollar. Here's a quickly Googled source showing CPI-adjusted S&P 500: http://www.multpl.com/inflation-adjusted-s-p-500 http://www.multpl.com/inflation-adjusted-s-p-500 Here's another quickly Googled source showing dividend-reinvested S&P 500 returns: http://www.indexologyblog.com/2013/08/08/inside-the-sp-500-dividends-reinvested/ http://www.indexologyblog.com/2013/08/08/inside-the-sp-500-d... I wish I could find a decent source that incorporated both effects.