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your question is a bit garbled, your first graph is real wages and the second is related to GDP, the two are unrelated.
gross national income is called GNI what you posted is GPDI which is one of many things used to calculate GDPUnrelated? Isn't GDP the same thing as national income? Of course, there's more to that than simply employment income, but I don't see how they're "unrelated."
GDP yes we have>>So are you asking how do we get back to 10% GDP growth, or 10% real wage growth?
We're never gonna get close to ten percent annual growth in either measure, are we? We never have.
he was most likely pandering to the "birther crowd" theres a pretty popular federal reserve conspiracy theory, involving the illuminati and the jews stealing our gold and somehow, we need the gold standard, to get all the gold back or something, but if you want to ask about that... your better off starting this thread in the conspiracy theory section>>Also the gold standard isnt seriously reccomended by anyone except for maybe a few crank theorists
Ted Cruz called for it in a GOP presidential debate this year, and a watered-down version of it was in the 2012 Republican platform.
Trump and Cruz's Call for Gold Standard Is Impractical and Dangerous | US News OpinionIn 2012, the Booth School asked its panel of roughly 40 economists if the average American would be better off, as measured by price stability and employment, if the U.S. replaced its current fiat currency with a "dollar" defined as a fixed quantity of gold – in other words, a return to the gold standard.
How many of the experts answered that this would be a good idea for the U.S.? None. Zero. For the record, in all the years that I have been following the Chicago Booth economic surveys (called the IGM Forum), there has never been unanimous agreement on any other question posed.
Average real GDP growth in the US has been relatively slow since the turn of the century, around two percent, interrupted as we all know by a terrible recession Dec 2007 — June 2009.
In the 1990s, we did better (around 3.5%), in part because there was just one brief and shallow downturn at the beginning of the decade. We also benefited from the Information Revolution during those years.
The 1980s were an unstable period, with the economy in recession for two of the first three years, then a big spike of 7.8% in 1983, followed by some more of those fairly good years at about 3.5%.
The 1970s were also unstable, in large part due to the oil shocks with average growth a little less than 3.5%. We did well in the 1960s at around 4.5%.
Americans would like to know what we can do to get incomes rising more rapidly. Of course, proposals are quite varied. Some observers, but very few if any economists, are calling for a return to the gold standard. Others support efforts to use deficit spending to leverage growth through investments in education, infrastructure, and R & D.
But there's a serious problem that many believe must be resolved — the widening income and wealth inequality that has only worsened over the past thirty-five years.
View attachment 67202723 (source)
An expanding pace of GDP growth that benefits only those in upper-income households won't do us any good and could lead to a dangerous level of political instability.
It should be noted that we're already doing a lot to try to address this issue. In 2014, the various income support programs that provide government assistance to low-income households (the so-called "safety net") reduced the poverty rate in the US from 27% to 15%, nearly cutting it in half. But this is only a short-term solution, one that leads to a variety of social breakdowns if it continues for too many years. Income subsidies are, at some point, a poor substitute for increasing employment earnings.
I'm not much of an economic theorist, but my understanding is that the problem with returning to a system in which the value of the dollar is tied to a commodity such as gold is that it effectively ties the hands of the government when the need to adjust to destabilizing events arises. I figure we simply can't return to the boom and bust cycles we experienced before the Second World War.
Otoh, I find myself drawn to the monetarist argument that a so-called "managed currency" like the one we had 1948-70 had an important component that might be very useful today — it lowered the risk, or at least the perceived risk, associated with investment because it did more to control the cost of capital.
I've tried to gain some understanding of the federal budget and its impact on the economy over the years, but I''m pretty much ignorant of the factors involved in stuff like ways to properly incentivize and prudently direct investment in the private sector. I'm hoping for an informative discussion of how public policies can be shaped in the next few years to both spur more economic growth and draw a larger share of income to working- and middle-class households.
I've become more or less satisfied with my views about tax policy and efforts to further reduce poverty, but I'm thinking my vision may be more limited than I've realized. I'm hoping to move away from what I see as a narrow field of increasingly bitter political struggles to find more common ground with proponents of an approach to economic development that focuses more on the private sector.
How can we get a measure like the following back up closer to ten percent annual growth, and do so in a way that creates very positive social outcomes?
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Or this my thinking simply off-base entirely?
"The Economy Is Great; the Economy Is Terrible," Atlantic, May 3, 2016
I've become more or less satisfied with my views about tax policy and efforts to further reduce poverty, but I'm thinking my vision may be more limited than I've realized. I'm hoping to move away from what I see as a narrow field of increasingly bitter political struggles to find more common ground with proponents of an approach to economic development that focuses more on the private sector.
gross national income is called GNI what you posted is GPDI which is one of many things used to calculate GDP
The rule of thumb is that making it it more profitable to invest and easier to employ increases investment and employment.
In what way do you want to focus? For me it's about balance - demand vs supply. As it is right now, it's a really tough sell that supply is short. … I'm more on the side that capital is already in "super abundance"
That seems to make sense. I'm looking for ways to spur investment, and I'm thinking that may involve the cost of capital and changing perceptions of risk.
Many countries with a stronger "socialist" safety net actually see better rates of startups, entrepreneurial endeavors, and more risk into unknown frontiers. The more a person can believe they'll be ok if they fail, the more they might risk.
GPDI=Gross Private Domestic Investment (see your 2nd chart) it basically means businesses are buying new inventory or "making investments" so they can sell stuff in the futureI've never heard of GDPI. Can you tell me about it? I don't think I posted it. I posted some data on employment income.
GNI can be an important economic indicator in smaller nations, but for a country the size of the USA, yes it is usually considered a negligible, or unused numberNow I am familiar with GNI (gross national income), which, predictably, is the level of production (or income, same thing) generated domestically plus income derived form overseas, such as interest and dividends. For the US, GDP makes up almost all of GNI. In 2014, GDP was $17.6T while GNI was $17.8T. That's 99%. In my experience, GNI is almost never discussed except in some very narrow contexts.
we should go back to thatI stand corrected. I was thinking of years other than, first, those during the Second World War (1943-45) when gubmint expenditures were forty percent of GDP, and secondly 1936 and 1938
it depends on what those expenditures are, they could spend it on books instead of bombs, when we were recovering from the terrible declines in production earlier in that decade that resulted from the Great Depression. So I'll amend my statement to, "We have never seen ten percent annual real GDP growth … other than in those five years when we were involved in either recovering from a worldwide depression or involved in a world war." I expect you'll agree that those high growth rates are not something we want to return to if we would need to pay the associated costs.
what i meant by "unrelated" was that one can go up, while the other goes down, theyre not directly connected. GDP can increase while median wages goes down, which has been happening for the past 40-50 yearsI agree that employment income is only part of total income. I already said that in #3. You said that they are "unrelated." I still don't know why you said that, and I have no idea why yer referring to tax brackets.
okayNo, I don't "want to ask about that," and I didn't. I brought it up to dismiss it, as I very clearly did, and to contrast it with the other monetarist idea I mentioned related to risk and the cost of capital.
I said that very clearly in the OP — "very few if any economists."
GPDI=Gross Private Domestic Investment
Average real hourly earnings of production/nonsupervisory grew by fourteen percent 1964-72, then fell fairly steadily until 1993, but have been increasing with some fluctuation in the years since. We're now within $1.20/hr, or five percent, of the all-time high.
A very good point. I was thinking of "big capital." I feel you've made a valuable contribution to the thread. Thanks.
>>we have gotten really good at creating entrepreneurs by necessity - people starting smaller versions of what they already know simply to stay employed.
That's pretty much what happened to me. I got to where I couldn't hack it in 100° restaurant kitchens anymore, so I started a small business providing a copyediting service and building websites. Never made much money. Then I was lucky enough to get hired by Uncle Sam, and now happily continue that life of teat-sucking. ☺
where are you getting these graphs?
What do you mean by "big capital"?
In what way do you want to focus? For me it's about balance - demand vs supply. As it is right now, it's a really tough sell that supply is short. There is that side, that wants more "natural" or organic private sector investment, but the question is why? What indicators are there that there needs to be more? I'm more on the side that capital is already in "super abundance", so even if we're not talking about taxes, the target is still more of the public sector regulating the private sector. I think there are ways to do that that allows for a lot more flexibility - ie work week and overtime limitations over straight up minimum wages. But they are regulations all the same.
Demand is the key to most things.
>>I don't think we get there, though, without seriously increasing public sector employment, especially middle-class level positions.
Well, I suppose I agree with the way you worded that. What about moderately sized "smart" public investments in education, infrastructure, and R & D? Wouldn't that boost demand to some degree in the short term and add to "organic" demand down the road?
>>the "organic" part - creating a genuine demand for labor at all levels, and hoping that private sector wages increase in response.
Any ideas on how to accomplish more of that?
There's a lot of data with "pretty graphs," as some here who don't like the information they provide describe them, available online from the Federal Reserve Bank of St. Louis. The site offers tools that allow you to tailor a graph for a specific purpose.
The search engine can be a little tricky, or else I'm just not that good at using it. In my experience , you need to get used to the way they label things. E.g, if you search on "median wages," you get a list that may not offer what you want. Ya might do better using "earnings."
If you click on "Browse data by … Category," you get a list that doesn't have wages or earnings or anything like it. But there is a link to the "Current Population Survey," the source they use for employment data.
If you go back to the main page, you can click on "Browse data by … Tag." Nothing useful for this on page one, but "wages" is listed on page two.
Anyway, under "Need Help?," you can find out a lot more. There's a link to "Tutorials" that has a lot of useful stuff to help you manipulate graphs. I haven't looked at those yet, but of course I should. I typically look at "the directions" for something only as a last resort. (Where's the fun in that?) The site can be a little frustrating, but it's got lots of good information, and you get better at using it over time.
>>Average real hourly earnings of production/nonsupervisory isn't a normal economic indicator neither is gross private domestic investment. these are really specific things that dont give an accurate picture of the whole US economy.
I figure that's true of a lot of statistics. I agree that you need to be very careful to be aware of what it is yer referencing.
i was just wondering if you were copying them from an article or blog you haven't sourced.
I'd like to see earnings and GDP increases of perhaps three to four percent annually. I don't think we could really hope for much more.
So would everyone but unfortunately theres no guaranteed way for that happen
There aren't a whole lot of guarantees in life, but we struggle along nevertheless.
2 basic arguments …the first … any growth is good growth … The other argument … that progressive taxation of the wealthiest citizens, the increasing of welfare benefits and the increasing of public employment can allow capitalism to progress without experiencing the negative aspects of the ups and downs of the capitalist economy.
why not?As for "increasing welfare benefits and increasing public employment," there may be some benefit associated with those policies, but I don't necessarily see them as priorities.
My purpose in starting this thread is to ask members for suggestions related to ways to increase private investment, perhaps with a focus on addressing the idea that the current level could be expanded by finding ways to diminish perceived risk.
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