The U.S. is heading towards a major depression

[Velociryx]

if all it takes is the emergence of new industries, then we have scant need to worry in any case. Biotech alone will feed the beast for the next fifty years.

-=Vel=-

[DuncanK]

Originally posted by Tripledoc


Surely there must be some upper limit. Military might must be paid for - the largest post being wages. Deficit financing does not add anything of value to the economy if it is just wages. It must be used to invest in productive or wealth generating enterprises.
A large well paid army might boost consumption. However armies are not paid to consume are they?
The army is not a welfare institution.

If the scheme is to instill money solely within the US economy as you stated then surely investment in foreign countries will suffer as the dollar depreciates and nothing will be done to correct the fundamental imbalance in the world economy - trade deficit wise.

I simply can't understand all this talk of how the level of consumption is an indicator of economic growth when the financial base for futher increases in consumption is not there and seemingly the demand is not there either.

Tripledoc,

Increased demand increases profits. Then investment takes place.

[DuncanK]

Vel,

Maybe so, but eventually there will be no emerging industries. Technological developement will one day be a thing of the past.

[Velociryx]

I gotta disagree with you, Duncan.

No emerging industries would imply that:

A) We have perfect scientific knowledge of the world around us

and

B) We are living in a utopian society where all our wants and desires are met.

Personally, I don't see either of these happening, and because I don't believe we'll ever achieve the above, I see new industries constantly being created.

One scientific discovery answers a question, and reveals ten new questions.

As we answer more questions, we find more puzzles.

More puzzles invariably lead to more technologies, which lead to....new industry.

-=Vel=-

[Ogie Oglethorpe]

Well said Vel,

Once upon a time the prevailing thought was at the turn of the 1800's to 1900's that science had discovered all there was to discover. Then along came Einstein and set the world of science on its ear.

[Capt Dizle]

We need wage growth inside the US to fuel internal comsumption but wages are depressed due to immigration, but immigration is needed to offset the aging workforce.

We can't count on exports to fuel the US economy.

[Velociryx]

Thanks Og....yep....I don't see us running out of questions any time soon....and that's about the only way we'd run out of new industry possibilities.

-=Vel=-

[DuncanK]

Originally posted by Ogie Oglethorpe
Well said Vel,

Once upon a time the prevailing thought was at the turn of the 1800's to 1900's that science had discovered all there was to discover. Then along came Einstein and set the world of science on its ear.

And now people believe that because people keep coming up with original ideas that there are infinite original ideas. The fact is that economic growth is continually slowing. This is evidence of slowing technological growth. The cost of coming up with new ideas for an emerging market will go up so far that they will not be economically fisable. That will be sufficient to cause the fall of capitalism. And what good will capitalism be at that point?

[Velociryx]

Have you ever played with factorals?

Amazing critters, especially for a non-math guy.

And what's really amazing about them is that for every one new number (idea) you add to the mix, you generate a HUGE number at the end (combination possibilities).

Technology is the same way. Each new innovation doesn't just stand on its own. It does that, sure, but it can also be combined in innovative ways with EVERY OTHER thing out there.

Some (many) combinations are patently stupid (ie - a cell phone and tuna salad will prolly not net you anything exciting), but many others are not (ie - what if we combined math co-processors with emerging biotech/cybertech stuff, and found a way to implant a math co-processor into a human brain, allowing that person to make use of the chip when performing mathematical calculations).

It's not just new ideas....it's new combinations of ideas.

Ask some of the guys I'm working with on the CB project....I get new ideas faster than I can write 'em down....one of our team took to calling me the "Robotic-Idea-Factory"

The rest of the world is that way too.

-=Vel=-

[Ogie Oglethorpe]

Dunkan,

I believe the trend you speak towards, the link of economic growth to idea generation, is faulty. You are looking to much towards the latest recession years and not the exponential growth in general of the 20th century.

I have already stated I believe there are some serious indicators that suggest hard times ahead but concur that the best means to avoid those impacts is through new market generation.

Even if there is a great depression, I think it folly to think it spells the death of capitalism.

[DuncanK]

I should have specified and said workable, profitable, means of production reorganizing original ideas instead of just saying ideas.

Don't be tricked by math. Infinity, as far as we know, only exists in mathmatics, and surely seldom if ever exists in reality.

I agree that new techonologies are out there. They probably aren't significant enough to keep us going for 50 more years of capitalism.

Here are examples of the kinds of ways that the means of production need to be reorganized to keep capitalism moving along smoothly.

After the last Great Depression no new emerging industries were developed. Fortunate for those with property, a major war was started postponing the collapse of capitalism. The growth in the economy after the war was very unique. The mentality of consumers had completely changed. They were now willing and able to buy all kinds of new things, and many more women entered the workforce throughout the next few decades. In fact this trend is still continuing, although the effects are slowing.

The economy started having serious problems as the effects of these new industries started to wear off. However, computer and networking technology finally became implementalbe. Although less significant that industrialization, it was significant enough to reorganize the means of production to keep capitalism moving along.

In order for capitalism to continue, we need significant changes to occur within the economy otherwise we face stagnation. Even though we come up with ideas, this is not neccessarily enough. Point is, will these ideas change the economy profoundly.

Ogie,

exponential growth? Are you serious?

[DuncanK]

Economic growth has slowed continually through out the 20th century. The long range curve is downward sloping.

[chequita guevara]

Yes, we're headed towards a major depression. We are also headed towards extinction. Who can say when either will arive or how.

[Sten Sture]

The very existence of this thread reassures me that we won't have even a second recession.

C'mon people! Unemployment always increases in the first year of a recovery - you don't even have to go back further than 1992 to see that. Last year real GDP was 3.0% - that is a pretty good year. This year unemployment will probably continue to increase for the first half of the year and then start to decline. Businesses have been repairing balance sheets and cutting costs to get healthy, just like they should. Real GDP will probably be about the same as last year, but only because the deflator will be a little higher and negate some of the gain in nominal.

What a ridiculous time to buy gold!

They really need to start making economics manditory study in grade school.

The 1930s depression was partly/mostly caused by the Fed tightening 200 basis points when things were at their worst instead of providing liquidity to compensate for the slowdown in money velocity...

[Tripledoc]

To sten sture

That is the worst kind of neo-liberal voodoo economics I have ever heard in my life.

The world is not a factory floor.

Pray tell - why was there a 'slowdown in money velocity' in the first place?

To chegitz guevara.

Doom and gloom.
Extinction? No. Soup kitchens and public works, maybe.

It is the third world which must generate new demand.
Supply must be secured through a restructuring - make that a resurrection - of the productive capacity of the post-industrial societies.

The service sector of the western world has become a bloated disaster. It puts educated people in degrading jobs of subservitude. Labour unions must be strengthened and gain influence on par with high finance and corporations. Then their accumulated wealth will be subtracted from these entities and put into the hands of the employees. Their wages fuel demand so their daily economic transactions must surely be just as valuable as any corporate character's decision as to what to invest in - no matter how well versed he might be in supply side economics.

Labour unions are corrupt. Sure. But they can hardly be more corrupt than corporations. The present system allows for some to be more corrupt than others. If everybody is equally corrupt then the collective loss will hardly be a political problem.

New ideas. The technologies for energy saving measures are there! my suspicion is that nations are holding back waiting for an even better technology to invest in. Kind of like the man who want's the optimal computer and puts his buy on hold every six months.