Remember when Donald Trump asked why we couldn't get economic growth back to 4%? Remember how all the Right Sort of people mocked him? All the regulations he's cutting are aimed at getting growth back up to 4%. His administration is putting a lot of effort into this. Why?
It's because over time lower growth rates steal prosperity from the future. It's actually shocking how much lower per capita income is now than it would have been if we had been able to maintain 4% growth. Captain Capitalism examined this in depth ten years ago:
We were once growing at 4% per year on average, now we're down to 2.25%. It also brings a cold, harsh and brutal reality to previous generations who voted themselves in a whole bunch of entitlement goodies in making it quite black and white that the economy is simply not going to be able to produce the wealth necessary to make good on those promises
...
"What would our GDP or "income per capita" be if we had continued to grow at 4%?"
My brain, knowing the power of compounding roughly estimated it to be around $100,000 (click it, see if I was lying) per person per year vs. our $45,000 today. But I hadn't calculated it out...until now.
Had we continued our traditional, old school, EVIL and OPPRESSIVE 1950's economic growth, our GDP would NOT be the paltry $14 trillion it is today (in 2005 numbers), it would be closer to $26 trillion. [Remember, this is from 2010 - Borepatch]
We take the roughly 310 million Americans in the country today and that translates into a real GDP per capita of about $84,500. However, that figure is in 2005 dollars. I was surprised to find out based on the CPI how much inflation has occurred since then (despite what the government tells us) and apparently the US dollar has inflated by about 18%. You adjust for that and what do you get?
$99,832.
Did I say $100,000 as just a guess?
This is a big problem because that stolen prosperity would be able to fund a lot of programs that are already promised.
But hey, a lot of great, high paying government jobs were created to write and monitor compliance with all the regulations that are choking the economy. And 93% of the people filling those jobs vote Democrat* so it's all good, amirite?Well because starting with the baby boomers and passing this philosophy on to successive generations we started ridiculing, mocking, criminalizing and villainizing that things that gave us such a luxurious standard of living - Capitalism, freedom, liberty and all that is America.
You wanted social programs and "The Great Society"
You got it.
You wanted to help out the losers of society?
You got it.
You wanted to reward people for their idiotic mistakes?
You got it.
You wanted to lower standards so to save people's feelings?
You got it.
3 comments:
Of course, all that wonderful non-European immigration has ballooned the size of cities requiring more government workers to maintain the sewer, water, and roads. More 'pubic' schools as well for where else are all those little tots going to go to get edumacated about the wonders of 'socialismo'.
I would argue the 'Great Stupidity' program only managed to encourage the breeding of more dumbasses. Then there are the intelligent who can do their jobs but oblivious to the stupidity of their leftist voting. Don't forget the selfish psychopaths while not exactly criminal, they do cause many unnecessary problems in a private or public institution.
Growth is about the only way we're going to handle our deficit spending binge and associated debt - getting out of the hole by growing our revenue to cover it.
Neither side wants to cut spending and the political consequences of doing so. Neither side will increase taxes to the level required to handle the debt and deficit due to political consequences of doing so and the fact that we can't tax our way out of this and keep overspending as we are and have anything approaching a sane economy.
Only growing the economy faster than politicians can expand spending programs and then use the excess to bite down on the deficit and debt is going to give us a shot. But it's only a chance, and not likely that it will occur as the politicians will continue to expand spending to buy votes.
I don't think that you can fairly figure in inflation, because with the inflated incomes, you also have to figure in the inflated costs of everything from gasoline, to milk, to tires for you car, to the cost of health insurance that we didn't even used to pay for, with most employers of blue collar laborers, like so many of us were. When I left my 35 plus years job in 2013, I was paying over 125$ per week, for my premium share of health insurance, and they were adding things, like making you get your blood pressure checked quarterly, and keeping it under control, or you paid more, etc.
But I agree with you entire premise, that basically, the shortsightedness of certain political parties cause much of the financial mess that we find ourselves in today. And as Dave Ramsey always says, you can never out earn overspending. We have lived like drunken Vietnam soldiers on R & R for much too long, and now,when the Democrats basically shut down the probably single most greatest improving economy America has ever known, outside during a major war, the income tax base is gone,and the government coffers are like old Mother Hubbard's cup boards. But what the hell, so long as the Democrats make Trump look bad come Nov.3rd, who cares who suffers among the basket of deplorables?
pigpen51
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