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The whole premise of 5% target growth per year is flawed and unsustainable. To my understanding the world's economic policies are set to spend resources to prom

The whole premise of 5% target growth per year is flawed and unsustainable. To my understanding the world's economic policies are set to spend resources to promote growth. 5% growth means doubling virtually everything every 10 years: imagine doubling energy consumption, double population in every city, double production, consumption. There is no a non-ideological answer/solution to the state of the world. The balance of nature will settle itself to an equilibrium, hopefully without too much pain and without complete destruction of the environment.

brutusborn 6y ago
Where do you get 5% growth from? Is it just extrapolated from expected returns on investment?
- JackMorgan 6y ago
  Not the original commentor, but much of the US' financial system is run with the express goal of trying to grow at about 5% per year. The target inflation of 2% is intended to encourage us to spend money reinvesting in new business rather than sitting on it. Returns have to be better than 2% to just break even.
  - brutusborn 6y ago
    But where do you get this 5% figure from? My understanding was that the inflation target of 2% was to reduce the risk of runaway deflation. I'm not saying you're wrong, but I hear the "unlimited growth" argument crop up a lot with no basis.
    - idiocrat 6y ago
      Really sorry for causing confusion, by putting up such an exact number, 5%. It is just my common understanding that the countries anchoring the growth goals around that number. The policies pf cause vary by country (developed, developing), for example for GDP: Japan's "annual forecast is +3.6% in 2021, and +2.2% in 2022". [0] The UN's Sustainable Development Goal [1] sets "For the least developed countries, the economic target is to attain at least a 7 percent annual growth in Gross Domestic Product (GDP)." Long time ago I remember watching a video by a prof, who asked a local council what would be the desirable growth (in range 1%-10%). The council agreed that 5% is reasonable. Here I found the video [2]. [0] https://www.ubs.com/global/en/investment-bank/in-focus/2020/japanese-economic-outlook.html https://www.ubs.com/global/en/investment-bank/in-focus/2020/... [1] https://en.wikipedia.org/wiki/Sustainable_Development_Goal_8 https://en.wikipedia.org/wiki/Sustainable_Development_Goal_8 [2] https://youtu.be/DZCm2QQZVYk?t=520 https://youtu.be/DZCm2QQZVYk?t=520

brutusborn 6y ago

Where do you get 5% growth from? Is it just extrapolated from expected returns on investment?

JackMorgan 6y ago
Not the original commentor, but much of the US' financial system is run with the express goal of trying to grow at about 5% per year. The target inflation of 2% is intended to encourage us to spend money reinvesting in new business rather than sitting on it. Returns have to be better than 2% to just break even.
- brutusborn 6y ago
  But where do you get this 5% figure from? My understanding was that the inflation target of 2% was to reduce the risk of runaway deflation. I'm not saying you're wrong, but I hear the "unlimited growth" argument crop up a lot with no basis.
  - idiocrat 6y ago
    Really sorry for causing confusion, by putting up such an exact number, 5%. It is just my common understanding that the countries anchoring the growth goals around that number. The policies pf cause vary by country (developed, developing), for example for GDP: Japan's "annual forecast is +3.6% in 2021, and +2.2% in 2022". [0] The UN's Sustainable Development Goal [1] sets "For the least developed countries, the economic target is to attain at least a 7 percent annual growth in Gross Domestic Product (GDP)." Long time ago I remember watching a video by a prof, who asked a local council what would be the desirable growth (in range 1%-10%). The council agreed that 5% is reasonable. Here I found the video [2]. [0] https://www.ubs.com/global/en/investment-bank/in-focus/2020/japanese-economic-outlook.html https://www.ubs.com/global/en/investment-bank/in-focus/2020/... [1] https://en.wikipedia.org/wiki/Sustainable_Development_Goal_8 https://en.wikipedia.org/wiki/Sustainable_Development_Goal_8 [2] https://youtu.be/DZCm2QQZVYk?t=520 https://youtu.be/DZCm2QQZVYk?t=520