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How do we restore growth?

Hey, I agree! Although I see things like pay and benefits and the cost of business expansion as already being legitimate businesses expenses that are already being taken, along with things like rent, depreciation, utilities, COG, advertising, etc
yet we have the highest marginal tax rate in the world. the average marginal tax rate is 25%.

I would be convinced about "regulations" harming our economy, as long as someone could tell me what those regulations are. I've been asking this question for years, and no one has been able to actually tell me about any specific regulations that are unneeded and overly burdensome to business (other than Obummercare of course). Is it about the law that says that businesses have to have battery backup emergency exist lights? Is that the one? Or is it that one that doesn't allow managers to whip their employees with wet towels?

EPA rulings and other things that Obama has tried to push through has a heavy price on businesses.


You may prove me wrong, but I think that most of the reason corporations don't "bring back money" has little to do with taxation, and almost everything to do with the fact that they don't really need the money in the US. Businesses only expand when they think that there is unfulfilled demand. Give business some reasons to think that demand is increasing, and they will expand. Tax cuts for the worker/consumer class would be a good start because that would be instant extra purchasing power in their pockets.

that is exactly the reason. they have to pay taxes on where it is stashed already.
they then have to pay taxes on it when it enters the US.

so it isn't worth it for them to bring it back even though most of them would like to.
 
..

EPA rulings and other things that Obama has tried to push through has a heavy price on businesses...

Specifically, which EPA rulings? And regulations only started harming our economy under Obama? This never happened before?




so it isn't worth it for them to bring it back even though most of them would like to.


How do you know they would like to? What would they do with this money, just add it to their American bank account? What good does that do anyone?
 
Specifically, which EPA rulings? And regulations only started harming our economy under Obama? This never happened before?

it only hurts when an economy is trying to recover and you keep hitting it with a hammer.
sure other presidents have pushed business regulations but not as cost heavy as Obama.
that 172 billion dollars could have gone elsewhere instead of doing what Obama thinks they should do.






How do you know they would like to? What would they do with this money, just add it to their American bank account? What good does that do anyone?

There was an article just today that the mayor of the town where apple sits is complaining. apple has a ton of money offshore that they would like to
bring back but they are not going to do it because they have to pay 35-40% tax on it.
 
Just like I said, "short term growth". This will end and when it does, it will be another disaster...

Why is it going to be another disaster? Our current growth is slow and steady, it's not driven by any bubbles like the Clinton or Bush economies were. Do you have any specific reason for thinking that it isn't sustainable for decades?
 
it only hurts when an economy is trying to recover and you keep hitting it with a hammer.
sure other presidents have pushed business regulations but not as cost heavy as Obama.
that 172 billion dollars could have gone elsewhere instead of doing what Obama thinks they should do.

But can you point to any specific regulations? I've been asking this question for years, and so far, not a single person has been able to point to specific regulations, other than Obamacare (and maybe they have a point on Obamacare, I dunno).

I suspect that this "regulations" situation is a lot like our feelings towards congress. Congress as a whole has less than a 10% approval rating. Yet when people are polled about their congressmen, almost all of them are at 50% or higher. We know we hate congress, but we can't actually point out why we hate it. It's about feelings, not about rational thought.







There was an article just today that the mayor of the town where apple sits is complaining. apple has a ton of money offshore that they would like to
bring back but they are not going to do it because they have to pay 35-40% tax on it.

And what good would it do that town if apple brought that money back and deposited it in a bank account? It's not like apple has a money shortage or anything, and apple certainly wouldn't bring that money back just to give it away to the towns people.
 
Why is it going to be another disaster? Our current growth is slow and steady, it's not driven by any bubbles like the Clinton or Bush economies were. Do you have any specific reason for thinking that it isn't sustainable for decades?

Well the real estate market is turning into another bubble, we have a massive amount of student loan and credit card debt and we have abysmally low savings rates. These are all the results of short term gain with long term loss. Without a major change in these problems, when these chickens come home to roost, it's going to be bad.
 
Well the real estate market is turning into another bubble, we have a massive amount of student loan and credit card debt and we have abysmally low savings rates. These are all the results of short term gain with long term loss. Without a major change in these problems, when these chickens come home to roost, it's going to be bad.

Other than the student loan debt, I'm not at all sure that we have more debt than we did a few years ago. I thought read that consumers have be deleveraging, which is why we have weak demand, but maybe I am mistaken about that.

The best way to "cure" all this consumer debt might be to stop income disparity from continuing to grow.

During the mid 20th century, all income classes grew in income at about the same rate. And until the mid 1970's, every generation in America had a little better standard of living than the previous generation. Income disparity started growing in the mid 1970's because the real wages of the bottom 99% stagnated while the top 1% started to become richer at a faster rate than ever. I believe that today's middle class has taken on so much debt as a way of temporarily resolving mis-distribution of income - thus allowing each generation to still have a better standard of living, even if they didn't have as good of a financial position as early generations.

Debt is the best measure for income and wealth mis-distribution. If one person has more money than they need they will seek to lend it, and if someone else has less than they need they will seek to borrow, the two come together and create a mutually beneficial transaction. but that's my own personal little theory, probably no one agrees with me.
 
Other than the student loan debt, I'm not at all sure that we have more debt than we did a few years ago. I thought read that consumers have be deleveraging, which is why we have weak demand, but maybe I am mistaken about that.

The best way to "cure" all this consumer debt might be to stop income disparity from continuing to grow.

During the mid 20th century, all income classes grew in income at about the same rate. And until the mid 1970's, every generation in America had a little better standard of living than the previous generation. Income disparity started growing in the mid 1970's because the real wages of the bottom 99% stagnated while the top 1% started to become richer at a faster rate than ever. I believe that today's middle class has taken on so much debt as a way of temporarily resolving mis-distribution of income - thus allowing each generation to still have a better standard of living, even if they didn't have as good of a financial position as early generations.

Debt is the best measure for income and wealth mis-distribution. If one person has more money than they need they will seek to lend it, and if someone else has less than they need they will seek to borrow, the two come together and create a mutually beneficial transaction. but that's my own personal little theory, probably no one agrees with me.

So no comments about the biggest issues we're facing - the real estate bubble and student loan debt, just the usual liberal myopic focus on one or two issues and ignoring the real problems??
 
The growth model is tapering off, the writing is on the wall. It's just happening sooner than expected. So unless we find a bunch of new Earth like planets to expand to, we'll have to change our economic model.
 
Increased public sector employment is the short term fix. That not only would spur demand, but would put pressure on labor prices as well.

I'd also shorten the work week to put additional pressure on wages.

But as we continue into automation and globalization, I believe our only choice is more eduction. We need to create things that the rest of the world is not educated enough to come up with. It's a gamble of course, as its tough to make money off of knowledge in general (ie science, medicine, etc). But it's better than the certainty of our ultimate demise if we continue to give up our lead by competing with third world countries to produce widgets.
 
So no comments about the biggest issues we're facing - the real estate bubble and student loan debt, just the usual liberal myopic focus on one or two issues and ignoring the real problems??

I haven't heard that we are in a real estate bubble. I'm not saying we aren't, I'm just not aware of that. Just a few weeks ago I got a very disappointing appraisal on some property I am having to refi. Prices certainly aren't in a bubble around my parts.

For a number of years now, student loans have been made directly by the government, and the amount of debt is seriously exaggerated. People exaggerate their student loan debt to gain sympathy. So exactly how is student loan debt a bubble that could burst? What would burst? And if it did, exactly how would it harm our economy? Seriously, I don't understand this to be a real issue.

Conservatives like to have their boogiemen. If there isn't a real boogieman just around the corner, they will make up a boogieman. Ebola, Mexicans, Muslim terrorists, hyperinflation, "Obummers gonna take our guns", government default, vaccinations, forced micro chip implants, death panels, bird flu, SS is bankrupt, etc.
 
I haven't heard that we are in a real estate bubble. I'm not saying we aren't, I'm just not aware of that. Just a few weeks ago I got a very disappointing appraisal on some property I am having to refi. Prices certainly aren't in a bubble around my parts.

For a number of years now, student loans have been made directly by the government, and the amount of debt is seriously exaggerated. People exaggerate their student loan debt to gain sympathy. So exactly how is student loan debt a bubble that could burst? What would burst? And if it did, exactly how would it harm our economy? Seriously, I don't understand this to be a real issue.

Conservatives like to have their boogiemen. If there isn't a real boogieman just around the corner, they will make up a boogieman. Ebola, Mexicans, Muslim terrorists, hyperinflation, "Obummers gonna take our guns", government default, vaccinations, forced micro chip implants, death panels, bird flu, SS is bankrupt, etc.

In my neck of the woods, we're approaching 2004 levels of real estate over-valuation.

Student loans are the a massive burden on our economy right now:
America’s growing student-loan-debt crisis - MarketWatch

  • The total outstanding student loan debt in the U.S. is $1.2 trillion, that’s the second-highest level of consumer debt behind only mortgages. Most of that is loans held by the federal government.
  • About 40 million Americans hold student loans and about 70% of bachelor’s degree recipients graduate with debt.
  • The class of 2015 graduated with $35,051 in student debt on average, according to Edvisors, a financial aid website, the most in history.
  • One in four student loan borrowers are either in delinquency or default on their student loans, according the Consumer Financial Protection Bureau.
 
This article has got me thinking.. How do you guys believe growth can be restored?
Getting past slow growth | Brookings Institution


Growing inequality, stupid political decisions, fear mongering over government debt, (all while private sector debt is ignored) stagnant wages, austerity measures, automation, a lack of aggregate demand... Things aren't looking to good. I find myself liking the authors outlook, although it will depend on governments making the right decisions. Countries need to focus on boosting demand, and tackling stagnant wages/inequality. What do you guys think?

I'm not so sure that economic growth is really what we should be striving for. The earth is finite. Growth, theoretically, is not, so there has to be a point where it stops. In economic terms, we should be raising the floor rather than the ceiling, and in general terms, focussing on the happiness and wellbeing over economic consumption and output.
 
I'm not so sure that economic growth is really what we should be striving for. The earth is finite. Growth, theoretically, is not, so there has to be a point where it stops. In economic terms, we should be raising the floor rather than the ceiling, and in general terms, focussing on the happiness and wellbeing over economic consumption and output.

You silly liberals, all about happiness and well being. I suppose you are talking about the same thing that Northern Light brought up in post 35.

Can you explain what the issue is? Are we running out of something?
 
You silly liberals, all about happiness and well being. I suppose you are talking about the same thing that Northern Light brought up in post 35.

Can you explain what the issue is? Are we running out of something?

Kind of. There are two parts. Firstly, I'm talking about putting the wellbeing of citizens above the wealth of citizens. I'm of the opinion that the 'end goal' of a society is the happiness and wellbeing of its citizens, and increasing economic growth is just one way to go about that, a way that's seeing diminishing returns. Some countries have adopted GNH, Gross National Happiness as a nationwide metric similar to GDP. We'll see how that goes.

Secondly, resources. Sustainable development is defined as: '"Development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

We're heading in a direction where we're compromising the ability of future generations to meet their own needs.

Every human 'empire' has grown and grown until it got too big to support itself at which point it collapsed. It's happened time and time again throughout history. I don't know if it will happen in 10 years, or if it will happen in 1000 years but right now our level of growth is exponential, that can't be supported forever. Whether we collapse for internal reasons, or because we run out of resources, short of discovering warp speed it's inevitable. It's about time we consolidated what we do have, get the 80% of the worlds population that lives in poverty up to a standard of living where they expect a certain level of wellbeing and happiness, and further can help contribute towards solutions to further that (6 billion more brains working on humanities hardest problems can't be a bad thing).
 
This article has got me thinking.. How do you guys believe growth can be restored?
Getting past slow growth | Brookings Institution


Growing inequality, stupid political decisions, fear mongering over government debt, (all while private sector debt is ignored) stagnant wages, austerity measures, automation, a lack of aggregate demand... Things aren't looking to good. I find myself liking the authors outlook, although it will depend on governments making the right decisions. Countries need to focus on boosting demand, and tackling stagnant wages/inequality. What do you guys think?

Lemme guess. MMT? Helicopter money? Che Guevara merchandise?
 
You silly liberals, all about happiness and well being. I suppose you are talking about the same thing that Northern Light brought up in post 35.

Can you explain what the issue is? Are we running out of something?
Actually, Nilly's point was my first thought as well. "Growth", like "efficiency" is a nice little catchphrase that economists tend to forget is a means to an end, not an end goal in and of itself. I view the end goals as increasing opportunity, ensuring household economic security, general economic stability, and bolstering an open market for everyone's participation--all things the US could use some work on.

By that criteria, growth could be completely useless to us, if all the growth continues to constitute little more than increasing incomes for the 1%.

Growth would be incredibly useful if it involved more jobs and higher wages.




The way I would restore growth is helicopter money. Run deficits in some way that would put money directly into households (Basic Income Guarantee would work wonderfully), and/or economic development funds for loaning to new startups and providing fiscal support for new competitors in heavily consolidated industries.

While on paper we could theoretically run deficits indefinitely, I'd rather not risk some unforeseen consequences that MMT hasn't anticipated, so I'd tax unearned income and monopoly rents. Taking a ****ton of money from people without earning it has always been the great evil of our capitalist society and it needs to be quashed anyway, but also I'd think taxing rent-seeking enterprises would shift economic activity to more productive endeavors, as well as having the side benefit of leveling the playing field for competition, since the way most rent-seekers get away with price gouging is lack of competition.



But oh wait, I forgot this was America. Best I can do is vote for Bernie Sanders and probably watch Clinton or Trump take a deep, 4-year long crap on our economic security anyway.
 
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QUO VADIS?

Things aren't looking to good. I find myself liking the authors outlook, although it will depend on governments making the right decisions. Countries need to focus on boosting demand, and tackling stagnant wages/inequality. What do you guys think?

"Things" weren't looking good last year. This year we are considerably more upbeat. For instance, have a look at the Employment-to-population ratio. Note that after four-years of employment-creation stagnation, the US, finally in 2014, started creating jobs.

So, the future is reparational in terms of job-creation. But will that be enough? So, what's "enough"?

Look at that same chart linked above. The real-estate boom in the first decade of the 21st century saw momentous job-creation, the E-to-p ratio was on its way to the post-war high of 64.7% in 2000. This time around, Uncle Sam would be lucky to get back up to 63%.

What's 1% less, nothing, ... some would think? But in a growing economy you also have a growing population. Which means the economy must replace jobs of both those retiring and add jobs for those newbies coming onto the job-market. Normally, that has not been a problem. But "normal" went haywire in the Great Recession of 2008/9.

Here we are in a New Era, where job-creation must depend not only on internal but external growth. If there is no Global Growth, we will not create jobs. It's as simple as that.

So here is what I see as the Major Constraint. A prescient Obama, perhaps looking forward a decade, probably said at the beginning of his second term, "How are we going to create jobs then?" And, a decade later "then" is "now".

Which is why (I think) he conceived the TransPacific Partnership (devised with the Pacific countries, with the exclusion of China). He has just left Europe where he made an effort to sell the same idea (as TPP) of reducing incoming tariffs on World Trade, with the point of boosting trade.

TOO MANY IFs!

Congress has yet to ratify TPP, and a lot of its success will depend upon a major trade-agreement with China. If that is seen to work, by not giving too much of an advantage to China, then Europe should follow suit. However, if the knotheads control the debate in the US and EU, then stagnation will happen, and TPP will not be signed nor the same treaty for Europe.

If both of those "ifs" happen positively, then the three dynamo-economies (the EU, China and US) might have the opportunity to renew growth by boosting trade thus creating the necessary jobs.

If not, its "Quo Vadis?" (Where are you going?)

And nobody but nobody has an answer to that question, not even my Crystal Ball ...
_______________________________
 
Simple...end the Fed (let the free market establish interest rates as it did before 1913), balance the budget and get the government to stay out of the economy.

I said simple, I did not say it would be easy.


And if you are a Krugmanite, the solution is...MORE MONEY...LOTS AND LOTS MORE MONEY (macroeconomics for the weak/ignorant).
 
Simple...end the Fed (let the free market establish interest rates as it did before 1913), balance the budget and get the government to stay out of the economy.

I said simple, I did not say it would be easy.


And if you are a Krugmanite, the solution is...MORE MONEY...LOTS AND LOTS MORE MONEY (macroeconomics for the weak/ignorant).

YES! We would be much better off if recessions and panics were just as frequent and severe as they were pre-fed.

Oh wait...no we wouldn't.
 
Wow, just what this forum needs.

ANOTHER thread that advocates " stimulus to increase aggregate demand "
 
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