bsilver wrote: Just because we had 3.5% growth doesn't mean it can be sustained. There were lots of reasons for this growth, and conditions change over time. e.g., the computer technology boom had a big effect, by increasing productivity, but maybe we've reaped all we can from that. We need something new to continue with 3.5% growth.
Well first, you could pick any number and use an argument to say that the current number is okay. Pick 0% growth and say - geez, that's all we can get. So, let's agree to toss that one out.
Second, our technology progress is ramping up, not the other way around. There are many things that could be driving the economy here including AI, biotech, etc.
bsilver wrote:Policy has an effect, but how do you measure that? It's only conjecture to say that the great decrease in growth is only from policy issues.
It's definitely not conjecture. Examples: what percentage of GDP do we use for compliance with the tax code? What percentage of GDP do we use to comply with other compliance issues? Since we instituted the new banking compliance rules - how many new banks were created? It reduces new startups by 10% (RegData tool has been created to measure this). And from Obama, when he first took office, he wanted to invest in new infrastructure to get the economy moving. But studies of the delays and consequent costs of simply rebuilding a bridge indicated (from his staff) that often these projects suffer from 5 to 10 years of delay and 10,000 pages of government regulation - hence these provisions weren't included in the stimulus.
bsilver wrote:I agree about bringing in talented, and hardworking immigrants. Look at the vibrant growth in NYC. It's largely immigration related. Over regulation is a problem. Except for environmental regulations which I think are necessary, we could do with a lot less.
Yep, they are literally killing growth. See Job's conversation with Obama. Obama agreed but wasn't willing to implement the changes - the problems with immigration served his needs. (I hope this doesn't come across as bashing Obama as much as showing that he has struggled with these issues).
bsilver wrote:I don't believe competition in education is much of a factor. More of a problem the direction we're steering the students. Increased vocational training would be a big help, rather than producing more white collar college graduates competing for limited jobs.
Both, no competition is killing our education establishment and killing the finances of our local and state governments. Our educational establishment was created for the 40s and hasn't been modernized. And there is no way for the current establishment to do so including steering us toward vocational training. Add to that - our guaranteeing college school loans and we know how that turned out? Higher educational costs and a huge burden on those graduating (and even worse on those that don't).
bsilver wrote:Entitlement programs do divert money that could be spent otherwise, such as on infrastructure, but that doesn't mean it would be spent that way. If we were spending less on entitlements I think the republicans would gladly increase military spending, or cut taxes further on the higher brackets. Many people getting entitlements ( food stamps and medicaid), are actually working. Some people are taking advantage, but the need is still there for people who want to work, and those working for low wages.
First, not an R. Second, entitlements are important. But the point on entitlements is that we have to spend within our revenues - we are literally killing our entitlement programs by overspending. See graph - this is completely unsustainable - that is why Bernie is soooooo out of touch with reality.
If we want to solve our problems we need robust economic growth - period. Tax revenue equals tax rate times income, and growth determines how much income there will be. Are the current candidates debating this - sadly, no.
The amount of tax revenue our government has available to pay off debt and to pay the ballooning social security and health care expenses depends almost entirely on economic growth. So, unless we are willing to make the cuts to entitlements, then we better be talking growth.
Larger tax rates can’t come close to raising that much money. Don't care how much you raise the rates. It isn't going to work.
