8 ms·

The US Economic Growth Is Over. (2014) [pdf]

• fweespeech 11y ago
  As interesting as this is, it isn't really news. The US is going to be stuck in stagnation unless it can solve its structural problems and the solution to that will take decades plus political sanity. Political sanity is something we are very much lacking. :/
  • collyw 11y ago
    "Political sanity is something we are very much lacking" You got Trump going for president though!
    • krapp 11y ago
      Case in point.
    • theseatoms 11y ago
      Honest question: Do people think that Trump believes the ignorant (and racist) rhetoric he spouts? Isn't it clear that he's just doing what it takes to get elected?
      • jonsen 11y ago
        Do you think he believes it will get him elected?
        • ferentchak 11y ago
          The odds makers are giving him a fair shot at it next best after Hillary. If you disagree that he has a shot against her you can make some cash from it. http://www.paddypower.com/bet/politics/other-politics/us-politics?ev_oc_grp_ids=791149 http://www.paddypower.com/bet/politics/other-politics/us-pol...
        • theseatoms 11y ago
          Good question. I think he's doing all he can to become president, while knowing that his presence in the national spotlight is only benefiting his career as a television personality. I think he's well-informed enough, behind his political facade, to look at the polls and prediction markets to see where he stands in the running. How does this differ from the consensus view?
      • mikeash 11y ago
        Every single Trump supporter I've heard from says that they admire the way that Trump speaks his mind and says what he thinks, rather than lying and pandering like normal politicians. I don't know about the rest of us, but do we matter for this? The only redeeming thing about this whole Trump fiasco is that his apparent popularity is highly misleading, since he's merely the frontrunner of a completely awful field.
        • theseatoms 11y ago
          So by being politically incorrect, he "proves" that he "just speaks his mind," and ends up gaining voter trust! I do think he's an expert salesman, something I've only recently grown to admire. His book might actually be worth reading...
      • ArkyBeagle 11y ago
        I think attributing it to real ignorance and racism is .... misdirected. YMMV, but Scott Adams ( the Dilbert guy ) is calling Trump like I see him. He's just a phenomenal salesman. I am especially loath to call some of the simply tone-deaf things he says "racism". After all, it might be technique at play, modulating your willing suspension of disbelief. If he is any racist at all, it's probably that annoying residual racism that comes from being older but is hard to characterize.
      • lawpoop 11y ago
        I don't think he believes it, really. Not to the extent that he spouts; there are though charges of racism stemming from his time as primarily a landlord in the 80s and 90s. What I think rather is that this is just another reality show for him. He loves being in the spotlight. In his biography, he said as a kid he admired Broadway musicals and wanted to grow up to be a producer. This is a man who loves show and spectacle. Remember, he was in the WWE (the phony wrestling organization) for a time. No billionaire needs to do that. He did it just because he wanted to be part of the show. He doesn't really care about becoming president or fixing the country, either. It would be nice for him, a bonus, but it wouldn't be his life's crowning achievement like it would for the other politicians in the race. It's more about the process for him. So to answer your questions, 1. No, he doesn't believe it, but 2. No, he's not just doing what it takes to get elected; he's doing what it takes to _stay in the spotlight_. That's more important to him than being elected.
  • malchow 11y ago
    I think we have the potential to have the best period of structural reform in the postwar period. The Speaker of the House is one reason why: https://www.youtube.com/watch?v=Xwv5EbxXSmE https://www.youtube.com/watch?v=Xwv5EbxXSmE
    • fweespeech 11y ago
      His "reforms" are the exact opposite of a solution. Improving GDP is largely about removing barriers to trade, improving infrastructure, and improving human capital. Paul Ryan is in favor of 0 of those things.
      • lintiness 11y ago
        long-term viability of the enterprise is about DEBT. representative democracy is off the rails as electability is determined by promises to spend on things (look at the above list). when are we going to start electing people who can do basic financial math?
        • danharaj 11y ago
          Care to elaborate?
        • ch4s3 11y ago
          That's not at all how national economies work, especially when debt is denominated in the nation's own currency. You simply can not compare a national economy to a single household's finances. At present, the US is incentivised to borrow, because the cost of borrowing in nearly zero. When you compare paying down debt with an interest rate of nearly 0%, to almost any other investment, paying down debt loses. Or put another way, any expenditure that has a return greater than the cost of borrowing is a better investment than paying down debt.
          • deleted 11y ago
            [deleted]
        • 11y ago
• cms07 11y ago
  Growth is not over: https://research.stlouisfed.org/fred2/series/GDPC1 https://research.stlouisfed.org/fred2/series/GDPC1 Edit: To elaborate, the rantings of one economist who has been wrong many times over does not make for a compelling work.
  • fweespeech 11y ago
    No, but the rate of growth is slower than it was before.
    • Zach_the_Lizard 11y ago
      That's still a far cry from "growth is over."
      • fweespeech 11y ago
        Yeah, but headlines/titles are almost always exaggerations. The paper basically says "slower" not "over".
    • cms07 11y ago
      I really find that hard to believe, and historically real growth has averaged about 2% year over year. Just because it has had short-run highs in the 1950s and 2000s does not mean that right now is abnormally low.
    • ArkyBeagle 11y ago
      The rate of growth as measured is slower. Example: Assume Netflix lacks the cash flow that Blockbuster had but provides better service - you don't have to drive to take the movies back. This means there's more consumer surplus but it's harder to measure.
• wrong_variable 11y ago
  NO ONE - can accurately predict the economic future in the short term - its chaotic like the weather. But the biggest indicator of economic health is demographics - and the US wins in this category hands down compared to other developed countries. While Japan, Germany and other countries are rapidly aging - the united states continues to be culturally very open and meritocratic. Britain tried being "open" but it backfired in a big way. The United States will continue to dominate - its biggest rivals are of'course China and India. China is facing a huge demographic cliff while India even though it has the demographic advantage does not have the energy reserves nor is able to fully get rid of structural corruption ( US too has corruption but everything is relative ) At the end of the day - growth is just an anomaly - the longest state of the universe is decay.
  • cylinder 11y ago
    Demographics don't matter if those people don't have income and wealth.
    • wrong_variable 11y ago
      Income and wealth can be created out of thin air with a willing, determined and optimistic set of people. The people who first came to the new world had no wealth or income - they built it themselves. It's not something that is static, it can be created anywhere. There is nothing special about american soil.
• orf 11y ago
  > Britain tried being "open" but it backfired in a big way. Care to elaborate? > the united states continues to be culturally very open and meritocratic. Hmm... tell that to Trump, the frontrunner for one of your two parties.
  • krapp 11y ago
    >Hmm... tell that to Trump, the frontrunner for one of your two parties. Trump's politics are reactionary, and play on a fear that the demographics and culture of the US are becoming too open and "meritocratic." His success is actually a sign that this phenomenon exists, and that people are terrified of it.
    • orf 11y ago
      Or that there are just "more brown people about". That doesn't mean America is becoming more open as a society, there is still rampant discrimination against blacks at all levels of society. The last lynching/crow laws are within living memory for gods sake.
      • krapp 11y ago
        Incremental progress is still progress.
      • mineshaftgap 11y ago
        It is very common for Europe to believe they are more diverse, they are not. Look we have Swedes, Norwegians and Finns. Very diverse.
    • douche 11y ago
      Are Trump's politics actually reactionary, or not? I am not sure I have a good sense of what his actual policies would be. Saying things that he's said about immigration might appear reactionary, but I'm not sure it's not as much a play to Peoria, where the lower and middle class whites that still make up the majority of the electorate are feeling the pain of globalization and the erosion of their traditional economy. As a big business New Yorker, I suspect he'd be a lot more of a centralist on many issues than anyone else in the race right now, possibly on either side of the aisle.
• randomname2 11y ago
  Today the Q4 2015 GDP number came in at 0.69% only, so for the short term this may actually be coming true!
  • ArkyBeagle 11y ago
    I personally derive great pleasure from the Cassandra-like voice of the prophet Scott Sumner crying in the wilderness.
• Bud 11y ago
  The leading "The" and the trailing period need to be edited out of the title. Neither is appropriate.
• ArkyBeagle 11y ago
  What is funny ( and I'm the poster child for this ) but we have massive defense engineering disasters and corporate IT is one bloody trench battle after another, yet we seem to have no other ideas for "fixing" things. And then we overmeasure the wrong things and make it worse.
• crimsonalucard 11y ago
  This is good news. Economic growth has an inverse relationship with sustainability. In the natural world we see ecosystems that exist in balanced cycles of equilibrium because the ecosystems that consume unsustainably have destroyed themselves. Natural selection selects that which is stable over that which is fit. Modern civilization is an unsustainable ecosystem. It will not last and it will eventually be selected for self termination. What will be left in the end are societies that do not grow but remain in equilibrium with the natural world. Keep in mind that we as modern humans living in a modern civilization are use to continuos compounding economic growth. The reality of the world is that growth is actually a temporary and very unnatural anomaly. The true state of the world is one of zero growth and total equilibrium. The final question is, are we living in a sustainable society today? Or at least will the society we live in today be able to transform itself into a sustainable civilization before it inevitably self terminates as a result of uncontrollable growth?
  • smaddox 11y ago
    s/equilibrium/steady state/g Equilibrium and steady state are two very different things. Strictly, the path we eventually want to tread is not even steady state, since internal variables can change dramatically (e.g. switching from fossil fuels to nuclear/solar/wind). Only the large-scale metrics need to be steady state. To give an analogy, the earth's climate is far from equilibrium (same temperature everywhere), but it is fairly close to steady state (same average temperature over long periods of time).
• MCRed 11y ago
  With the federal reserve pumping out money like nobodies business, the resulting inflation is a major brake on the economy. It also results in less profits for companies, less income growth for employees etc. The only people it really benefits are wall street and other politically well connected entities (solyndra et. al.) The government is basically sucking up all of the value from advances in technology ,and redirecting it to the political class who then profit from the carry trade of investing it in the stock market and the like. Ironically, of course, none of the mainstream candidates for president will fight this, though many of them are trying to get elected on the backs of the outrage over "income inequality"... and this comment is likely to be buried because it points out a crime committed under both Bush and Obama and nobody wants to admit their guy is a bad guy.
  • dragonwriter 11y ago
    > The only people it really benefits are wall street People with net dollar-denominated asset balance (e.g., net holders of financial capital denominated in dollars) lose value with inflation (people with net dollar-denominated liability balance -- net debtors -- are the winners with inflation.) > The government is basically sucking up all of the value from advances in technology ,and redirecting it to the political class who then profit from the carry trade of investing it in the stock market and the like. To the extent that's true at all, that's a product of fiscal policy (particularly, the favorable tax treatment of capital gains compared to "vanilla" income, and the additional taxation in the form of payroll tax on top of income tax levied on labor income compared to "vanilla" income) rather than monetary policy. Which, rather than being a distinct problem from "income inequality", is actually the same problem as income inequality.
  • codyb 11y ago
    Inflation rates were very low in 2015 (sometimes even slightly negative) [0], and historically have been relatively constant at around 1-5% (even during the economic crisis of 2008). Aside from extraneous years of course where it hit high teens. So, yea, if there is a break on the US economy, it doesn't appear to be stemming from inflation. The United States has an extremely diversified economy, plenty of natural resources, an abundance of talent, a relatively low population, incredible military strength, technological dominance in many areas, a healthy population (unlike, as pointed out, some countries which are declining in population, or about to hit cliffs where the majority of the population is above the working age), and huge geographical buffers. Some economists say the dollar might be too strong for short term gains for the American worker, and the Fed is having trouble hitting inflation targets between 1-3%. The private sector benefits primarily from government funding of research. So I'm just not sure where you're basing your analysis from? [0] - http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in...