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It's fairly obvious that less (or no) disposable income leads to less consumer spending, which leads to fewer jobs, which leads to less consumer spending, which

It's fairly obvious that less (or no) disposable income leads to less consumer spending, which leads to fewer jobs, which leads to less consumer spending, which leads to.... That is exactly the ongoing story of the vanishing middle class. The lack of demand snowballs and branches out to impact many other things the exact same way that a strong increase in demand spreads out to impact other things. With a predominantly consumer driven economy, eventually all of this will catch up and be a significant drag on GDP at best, though it'd be easy to argue we're already at exactly that point. So, what happens next and what do we do about it? If only we had some sort of large team of people who were elected to solve this kind of problem, and if only they had some sort of historical periods of widespread prosperity to reference and model policy on....

knz 9y ago
> and if only they had some sort of historical periods of widespread prosperity to reference and model policy on.... Isn't the problem that no one can agree what historical prosperity looked like especially when thinking about the consequences of the policies that lead to the prosperity. Was it the 1920's, 1950's, or 1980's? 2000's? Or the age of the Robber Barron's Or some other time? Personally I think a bigger issue is the failure of our elected officials to deal with the things holding prosperity back - housing/healthcare/education/childcare rising more rapidly than people can sustain.
- Retric 9y ago
  The social unrest of the 60's was a direct results of widespread prosperity. Even a minimum wage job for 6 months was often enough to live on for ~1 year. In part because there where fewer things to buy, but also because expected standards of living where low and the green revolution drastically reduced food prices. The world population was also less than 1/2 what it is today which had other benefits.
- Gibbon1 9y ago
  > consequences of the policies that lead to the prosperity. I have suspicions that policy changes to allow banks to compete on a national basis didn't do a lot of flyover country any good. Before the loans from the central bank flowed down a tree, each node ending up at some local bank. Which had to loan out money locally. Now it's a couple of large banks chasing best safe returns. And gouging consumers as much as they can.

knz 9y ago

> and if only they had some sort of historical periods of widespread prosperity to reference and model policy on.... Isn't the problem that no one can agree what historical prosperity looked like especially when thinking about the consequences of the policies that lead to the prosperity. Was it the 1920's, 1950's, or 1980's? 2000's? Or the age of the Robber Barron's Or some other time? Personally I think a bigger issue is the failure of our elected officials to deal with the things holding prosperity back - housing/healthcare/education/childcare rising more rapidly than people can sustain.

Retric 9y ago
The social unrest of the 60's was a direct results of widespread prosperity. Even a minimum wage job for 6 months was often enough to live on for ~1 year. In part because there where fewer things to buy, but also because expected standards of living where low and the green revolution drastically reduced food prices. The world population was also less than 1/2 what it is today which had other benefits.
Gibbon1 9y ago
> consequences of the policies that lead to the prosperity. I have suspicions that policy changes to allow banks to compete on a national basis didn't do a lot of flyover country any good. Before the loans from the central bank flowed down a tree, each node ending up at some local bank. Which had to loan out money locally. Now it's a couple of large banks chasing best safe returns. And gouging consumers as much as they can.