Re: New survey shows 100% of economists say lower taxes doesn't increase government r
Except you think that a bubble or significant government intervention is the only way to solve the problem. It's a pretty huge difference.
And the problem is the scarcity of capital which would be used to direct production where consumers are actually demanding it which would fuel higher employment. But with record low interest rates and every measure imaginable taken to discourage savings, how can we ever expect to experience this genuine growth.
No, there is no "problem" remember? 7+++% unemployment is the new normal. What I said was that unless we either had another bubble or government intervention, we may not see unemployment below 7%, maybe not even below 8%.
If there is no problem, then there is no solution because there is really no problem to solve.
As far as the "unfunded" liabilities, thats just an accounting issue, not a real life production/consumption/standard of living issue. Our standard of living depends far more on how much we produce than it depends on any accounting entry. Each year most of our "wealth" (true wealth, not money) is consumed. Only a fairly small percent of our wealth (again, true wealth, not money) exists from year to year, just thinks like durable products and real estate improvements. Our standard of living is based upon what we produce each year, not upon accounting entries. If we produce less per person, then our aggregate standard of living is reduced, if we produce more per person then our aggregate standard of living tends to increase.
Now lets say that instead of having unfunded liabilities, that those liabilities were funded, and all that money had been removed from our economy and was stored in a gov vault somewhere. Would we be any better off? Would that stored money actually produce additional food and products when it came time to start drawing on it? Whats the difference between us just getting money out of the vault, and printing new money when the time comes? I really don't see that there is any difference, and for every penny of money taken out of circulation today, there has to be another penny created to replace it our else we will not have sufficient of a supply of money to facilitate our current trade. Money isn't the same thing as wealth or production, it's just a representation of value, with which we use to facilitate trade.
Think about it, if our gov wanted to, they could print up enough money right now to retire the debt, and then just stick it in storage, and state that we have enough money to payoff the debt and to fund unfunded liabilities. Of course if it did that, there would be absolutely no change in our economy. We wouldn't have inflation because the money wouldn't be circulating, it wouldn't increase our economy or decrease it. I guess it might make some people feel better to think that we had enough money to pay future obligations. But why even bother, because we can do that whenever we actually have the need for money to pay debts. Right now we have no need, there are tons of people and countries and businesses willing to loan our gov money at an interest rate lower than inflation, and thats a darn good deal for the taxpayer.
For hundreds of years (if not thousands) we have had an increasing population of retired people. We haven't had huge shortages due to retired people because our productivity have increased at a rate faster than our retired population has. With us becoming more and more productive, and with things like 3-d printing (assumably) just around the corner, then I can't image why we would become any less productive or why productivity wouldn't continue to grow at a rate faster than our unemployed population grows.
So our saving grace is that we are most likely going to become more productive as our population of retired people increases, and as the "unfunded liabilities" come due. Again, the accounting entries really don't effect our aggregate standard of living, just our production. The only way that unfunded liabilities would become an issue is if our production per person started decreasing, and thats highly unlikely, unless of course we just run out of natural resources.
