Economy death watch

[Geronimo]

Originally posted by snoopy369


Unfortunately, that is no longer remotely true. The US does not have unlimited room for (organic) growth, because it does not have unlimited resources, or substantial new frontiers; technological growth is certainly possible, but unfortunately that actually can do more harm than good, because it often involves reducing employment rather than increasing it (many of the current advances in technology involve automating processes to a greater degree). Research itself does not significantly help the economy (unless an entirely new field is opened, which is not something to be counted on), space exploitation is not happening (but certainly would be the best way for growth, if someone were to be convinced to do it) and subsidized growth is not unlimited (as it's limited by other economic factors).

when you originally said "particularly in an economy that has little left to grow in except speculation ... it's not like we produce much anymore)" what did you mean by "little"? ~1% a year? ~5%? whereabouts? It sounds like you agree that at least some of these avenues of growth can indeed facilitate growth for the economy for the forseeable future but simply meant that speculation is good because we really need to have more growth than these avenues of growth can (or will) reliably deliver. Am I reading you right?

[Geronimo]

Originally posted by Kidicious


All of the things that you mentioned are constrained by scarcity. Also, you need to consider the law of diminishing returns. Look at the production possibilities curve.

Much of that is prone to the effects of distorted perceptions and for example the Tragedy of the commons for Green tech investments.

[Kidlicious]

Originally posted by DanS
It's true that some modern economies have more growth potential than others, but productivity growth -- the main determinant of the upper bound for economic growth -- is not a fixed variable.

The argument is whether you can increase productivity growth not. Indeed, productivity growth is economic growth, but giving tax breaks to the rich, for example, does not increase productivity growth.

[Kidlicious]

Originally posted by Geronimo


Much of that is prone to the effects of distorted perceptions and for example the Tragedy of the commons for Green tech investments.

Not much. The reason why investing more in education does not create more economic growth is the same reason why tax cuts for the rich do not. Your argument is a supply sider argument btw. Snoop's claim is correct. The inflation of housing prices have created economic growth by increasing consumer confidence and therefore consumer spending. That has made the pie bigger the same amount or more than investing more in education.

[Geronimo]

Originally posted by Kidicious


The argument is whether you can increase productivity growth not. Indeed, productivity growth is economic growth, but giving tax breaks to the rich, for example, does not increase productivity growth.

Increasing availability of research grant money and training more qualified students might though.

[Geronimo]

Originally posted by Kidicious


Not much. The reason why investing more in education does not create more economic growth is the same reason why tax cuts for the rich do not. Your argument is a supply sider argument btw. Snoop's claim is correct. The inflation of housing prices have created economic growth by increasing consumer confidence and therefore consumer spending. That has made the pie bigger the same amount or more than investing more in education.

Increasing tax cuts for the rich is nothing like subsidizing research. Can you explain your comparison?

Regardless, the inflated housing prices, like all speculation, is not sustainable which leads to busts which undermines consumer confidence undermining the growth.

Speculation is a zero sum factor. There's no free lunch there.

[Kidlicious]

Originally posted by Geronimo
Increasing tax cuts for the rich is nothing like subsidizing research. Can you explain your comparison?

The base assumption is the same for both of them, that resources are being used inefficiently, when they really aren't. There is fixed number of research scientists for example, and they get paid plenty already. Therefore there is plenty of incentive to become a research scientist. So just throwing money at science is going to take resources away from somewhere else, but result in very little positive effect in comparison.

Regardless, the inflated housing prices, like all speculation, is not sustainable which leads to busts which undermines consumer confidence undermining the growth.

Speculation is a zero sum factor. There's no free lunch there.

Try to get buy without speculation. You've got to consider how much economic growth we would have without it. Imagine what asset prices would be. That would be very bad.

[DanS]

This thread is hosed.

[Kidlicious]

Originally posted by DanS
This thread is hosed.

Why do you have such a problem with other people talking?

[snoopy369]

Originally posted by Geronimo


when you originally said "particularly in an economy that has little left to grow in except speculation ... it's not like we produce much anymore)" what did you mean by "little"? ~1% a year? ~5%? whereabouts? It sounds like you agree that at least some of these avenues of growth can indeed facilitate growth for the economy for the forseeable future but simply meant that speculation is good because we really need to have more growth than these avenues of growth can (or will) reliably deliver. Am I reading you right?

I generally believe that manufacturing (or raw materials) growth is the only meaningful growth in the long term for an economy; and we don't have a lot of room for that except in automation ('productivity enhancements') which, unfortunately, don't have as beneficial an affect on the economy because they tend to encourage concentration of wealth rather than distribution of it (as they decrease jobs and/or the need to pay as well for jobs, thus decreasing the amount of money available for the middle class and poor, which is the money that drives the economy via spending). By speculation I mean financial speculation, which is not actual GDP growth (we can create as much fake money as we want, it's not adding to the actual production of the nation's economy).

[EternalSpark]

Originally posted by Kidicious


Nope. When things go down peoples confidence goes down and that makes things go down more.

So the entire cycle of economic ups and downs in history have never happened? it's all been downhill since the beginning?

[Dauphin]

Originally posted by snoopy369


I generally believe that manufacturing (or raw materials) growth is the only meaningful growth in the long term for an economy;

Wah?

[Kidlicious]

Originally posted by EternalSpark


So the entire cycle of economic ups and downs in history have never happened? it's all been downhill since the beginning?

That's not the same thing as saying that the downs caused the ups.

[Kidlicious]

How do we know it's a recession?

http://money.cnn.com/2008/03/20/news...tors/index.htm

Leading indicators in 5th straight drop
The Conference Board's measure's down streak is longest since 2001.


NEW YORK (CNNMoney.com) -- An indicator of the economy's future performance fell for the fifth straight month in February, the first time that has happened since 2001, according to a report released Thursday.

The Conference Board's index of leading U.S. economic indicators fell 0.3% to 135 last month, extending the 0.1% decline logged in January. The decline was in line with economists' expectations, according to a consensus compiled by Briefing.com.

Jobless claims, building permits and vendor performance were the components that impacted the index negatively. The index was supported by positive contributions from the money supply and interest rate spread measures.

The index of leading indicators, which compiles data on stock prices, jobless claims, building permits and other indicators, is designed to signal turning points in the business cycle.

5 straight drops makes it a pretty sure thing.

[snoopy369]

Originally posted by Dauphin


Wah?

I believe that 'real' growth, ie growth in real things like raw materials or manufacturing, is the only true growth in the economy; retail, service, financial, the rest is all just playing with fake money rather than making something actually new. It's all important, and all good for the economy and necessary for a functioning economy (moving money around, real or fake, more is always good) but your actual growth is the amount you either produce, grow, mine, find, or make.

(I'm considering food to be 'manufacturing' or 'raw materials' here, by the way, as it is in a sense.)