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Author Topic:   The economy needs a 3% GDP growth to function well
Minnemooseus
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Posts: 3553
From: Duluth, Minnesota, U.S. (West end of Lake Superior)
Joined: 11-11-2001
Member Rating: 4.1


(5)
Message 1 of 21 (813249)
06-25-2017 4:10 AM


I was listening (on National Public Radio, it might have been a BBC show) to an economist type person saying that the U.S. needs to grow the economy (GDP, apparently not the per capita version) at 3% for things to work well. Not at all an easy thing, and being that we have a baby boomers bulge entering into retirement, such would seem to require a massive increase in immigration to supply the needed workers.

Now, I can kind of see that keeping the GDP in proportion to the population as maybe being a good thing, but even now it seems like a big chunk of production is of things of dubious need.

More production requires more consumption, and we are already (largely) producing more that we have any real need to consume. Production/consumption has gone (for the population as a whole) from bare survival, to comfortable survival, to luxury survival, to "more crap than we know what to do with". Of course, such is most extreme for the 1%, and not happening for a lot of the 99%.

It seems to me that a capitalistic economy is a Ponzi or pyramid or something scheme, that is ultimately doomed to "the big crash".

I guess this topic kind of ties into Faith's Marxism topic.

A friend once said "There is a term for unrestrained/unlimited growth - It's cancer."

Moose

Added by edit (also in message 11):

I tracked down a transcript of the radio show I was listening to:

Is It Realistic? Trump Budget Relies On 3 Percent Economic Growth

Edited by Minnemooseus, : Added by edit...


Professor, geology, Whatsamatta U
Evolution - Changes in the environment, caused by the interactions of the components of the environment.

"Do not meddle in the affairs of cats, for they are subtle and will piss on your computer." - Bruce Graham

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." - John Kenneth Galbraith

"Yesterday on Fox News, commentator Glenn Beck said that he believes President Obama is a racist. To be fair, every time you watch Glenn Beck, it does get a little easier to hate white people." - Conan O'Brien

"I know a little about a lot of things, and a lot about a few things, but I'm highly ignorant about everything." - Moose


Replies to this message:
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 Message 5 by frako, posted 06-25-2017 12:21 PM Minnemooseus has not yet responded
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NosyNed
Member
Posts: 8800
From: Canada
Joined: 04-04-2003
Member Rating: 10.0


Message 2 of 21 (813276)
06-25-2017 9:48 AM
Reply to: Message 1 by Minnemooseus
06-25-2017 4:10 AM


Long Term
Agreed.
When I win the big lottery I will fund some economic research to see if any one can devise an economy that doesn't have to constantly grow and still work.

I think we should be working on that now.


This message is a reply to:
 Message 1 by Minnemooseus, posted 06-25-2017 4:10 AM Minnemooseus has not yet responded

Replies to this message:
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jar
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Posts: 29423
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.4


Message 3 of 21 (813279)
06-25-2017 10:24 AM
Reply to: Message 2 by NosyNed
06-25-2017 9:48 AM


Re: Long Term
There have been many such economies in the past. The biggest issue is the concept of creating demand as a profession.

Or current "Constant Growth" model is actually pretty much an aberration among all the various societies than have existed and also has a history of crash & burn cycles.

A couple possible examples.

I've been shaving lately with a razor that was made in 1919. It provides as close and comfortable a shave as any modern razor of and technology. It is also beautiful and been used by at least three and maybe for generations of my family.

BUT it's still working just fine. It's never needed repairs. I change the blades when they get dull but that is the only disposable part.

We can build things that last. But instead we seem to operate on the "what can I patent that will make all the old stuff obsolete" "let's drive consumption" model.

Making stuff that lasts does not preclude change or advancement BUT when change and advancement exist only in the marketing Medicine Man pitch can we really afford it?


My Sister's Website: Rose Hill Studios     My Website: My Website

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Phat
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Posts: 9881
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.4


Message 4 of 21 (813281)
06-25-2017 12:05 PM
Reply to: Message 1 by Minnemooseus
06-25-2017 4:10 AM


Solutions both short and long term
Moose writes:

It seems to me that a capitalistic economy is a Ponzi or pyramid or something scheme, that is ultimately doomed to "the big crash".

I have always thought this to be true, also. I almost think that the wealthy anticipate crashes and adjust their portfolios to ride each one out. The rest of us are in trouble, though.

Chance as a real force is a myth. It has no basis in reality and no place in scientific inquiry. For science and philosophy to continue to advance in knowledge, chance must be demythologized once and for all. –RC Sproul
"A lie can travel half way around the world while the truth is putting on its shoes." –Mark Twain "
~"If that's not sufficient for you go soak your head."~Faith
"as long as chance rules, God is an anachronism."~Arthur Koestler

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frako
Member
Posts: 2708
From: slovenija
Joined: 09-04-2010


Message 5 of 21 (813282)
06-25-2017 12:21 PM
Reply to: Message 1 by Minnemooseus
06-25-2017 4:10 AM


Unlimited growth on a limited planet is impossible.

Christianity, One woman's lie about an affair that got seriously out of hand

What are the Christians gonna do to me ..... Forgive me, good luck with that.


This message is a reply to:
 Message 1 by Minnemooseus, posted 06-25-2017 4:10 AM Minnemooseus has not yet responded

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Chiroptera
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Posts: 6396
From: Oklahoma
Joined: 09-28-2003
Member Rating: 5.5


Message 6 of 21 (813283)
06-25-2017 12:25 PM
Reply to: Message 5 by frako
06-25-2017 12:21 PM


I suspect the Moose knows that, and that his point is that even if we were to transition to a reasonable economy we would still need to accept lots of immigration to maintain a comfortable standard of living in the meantime.

Moose can clarify if I'm wrong.


Freedom is merely privilege extended, unless enjoyed by one and all. – Billy Bragg

This message is a reply to:
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Replies to this message:
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frako
Member
Posts: 2708
From: slovenija
Joined: 09-04-2010


Message 7 of 21 (813284)
06-25-2017 12:29 PM
Reply to: Message 4 by Phat
06-25-2017 12:05 PM


Re: Solutions both short and long term
I have always thought this to be true, also. I almost think that the wealthy anticipate crashes and adjust their portfolios to ride each one out. The rest of us are in trouble, though.

They dont just anticipate crashes they cause them. Then they place "bets" (puts, calls), and use the money they gained to buy stocks at a low price. A few multi millionares can do this on a smal scale, a lot of them can do this on the world scale.


Christianity, One woman's lie about an affair that got seriously out of hand

What are the Christians gonna do to me ..... Forgive me, good luck with that.


This message is a reply to:
 Message 4 by Phat, posted 06-25-2017 12:05 PM Phat has not yet responded

    
frako
Member
Posts: 2708
From: slovenija
Joined: 09-04-2010


(2)
Message 8 of 21 (813285)
06-25-2017 12:35 PM
Reply to: Message 6 by Chiroptera
06-25-2017 12:25 PM


I thhink te best option for the world would be to faze out humans as a workforce replace them with robots, use the profits to give everyone a minimum income some kind of score system so those that actually do something for humanity like science or jobs that cant be replaced get more, then slowly faze out money altogether.

Christianity, One woman's lie about an affair that got seriously out of hand

What are the Christians gonna do to me ..... Forgive me, good luck with that.


This message is a reply to:
 Message 6 by Chiroptera, posted 06-25-2017 12:25 PM Chiroptera has responded

Replies to this message:
 Message 9 by Chiroptera, posted 06-25-2017 12:48 PM frako has responded
 Message 14 by Taq, posted 09-29-2017 5:33 PM frako has not yet responded

    
Chiroptera
Member
Posts: 6396
From: Oklahoma
Joined: 09-28-2003
Member Rating: 5.5


Message 9 of 21 (813286)
06-25-2017 12:48 PM
Reply to: Message 8 by frako
06-25-2017 12:35 PM


Rich people would love the robot part but hate the sharing profits part. So we might have to build some robots to drive the tumbrils.

Freedom is merely privilege extended, unless enjoyed by one and all. – Billy Bragg

This message is a reply to:
 Message 8 by frako, posted 06-25-2017 12:35 PM frako has responded

Replies to this message:
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frako
Member
Posts: 2708
From: slovenija
Joined: 09-04-2010


Message 10 of 21 (813287)
06-25-2017 12:55 PM
Reply to: Message 9 by Chiroptera
06-25-2017 12:48 PM


Rich people would love the robot part but hate the sharing profits part.

Well they hate the sharing part now , if they dint share there would be no economy because no one would have money to buy their crap, its the reason they play along now and throw some scraps of the table as wages to the masses.


Christianity, One woman's lie about an affair that got seriously out of hand

What are the Christians gonna do to me ..... Forgive me, good luck with that.


This message is a reply to:
 Message 9 by Chiroptera, posted 06-25-2017 12:48 PM Chiroptera has not yet responded

    
Minnemooseus
Member
Posts: 3553
From: Duluth, Minnesota, U.S. (West end of Lake Superior)
Joined: 11-11-2001
Member Rating: 4.1


Message 11 of 21 (813361)
06-26-2017 11:29 PM
Reply to: Message 1 by Minnemooseus
06-25-2017 4:10 AM


Radio show source of message 1
I tracked down a transcript of the radio show I was listening to:

Is It Realistic? Trump Budget Relies On 3 Percent Economic Growth

This topic also connects to one of my earlier topics (which I probably could well have used the message 1 content in had I been better organized):

Economic failure because of productivity increases / excessive productive capacity

Another topic I rediscovered in the process of looking for the above:

Keynesian Economics and Recession Counter-Measures

Moose


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Riggamortis
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Posts: 167
From: Australia
Joined: 08-15-2016
Member Rating: 2.0


Message 12 of 21 (813394)
06-27-2017 7:15 AM


Money for profit.
In my opinion the problem is that capitalists are in control of creating the capital.

http://www.bankofengland.co.uk/...rereleasemoneycreation.pdf

http://www.sciencedirect.com/...rticle/pii/S1057521914001070

The answer in the short term at least, is to nationalise currency. Modern monetary theory and interest free credit. This will at least remove the profit motive from money itself.

https://theconversation.com/...-modern-monetary-theory-72095

We sell bonds when we should be borrowing from ourselves and/or spending debt free money into existence as sovereign creators of our currency. In the private sector, that means business and individuals, we borrow money into existence and have to pay compound interest on it. This is such an important issue because it is so bloody fundamental to everything we do. Can't build a wind farm if it's won't pay back principal plus interest and then some, can we?

We need to realise money is fairy dust. The only REAL limitations on what we can do are natural resources, the people to do it and sustainability/enviornmental concerns. So political acceptance of MMT would be a good start, we can then turbo charge our development towards sustainability.

I can't help think that wind plus hydrogen for storage/on demand is the way to go for energy. Wind requires only steel, copper and magnets to generate and hydrogen produces water vapour. When the wind is generating an oversupply we use it up producing hydrogen and burn the hydrogen when the wind dies down.

With abundant sustainable energy we can focus on automation and technology. Then the sky is the limit! Or is it? Perhaps we'll develop the technology to upload our consciousness into a matrix, real heaven? Lol


  
LamarkNewAge
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Posts: 906
Joined: 12-22-2015


(1)
Message 13 of 21 (820816)
09-27-2017 6:22 PM


Quantitative Easing begins $4.5 tril unload ($10 billion a month now,to $50 a month
The $4.5 trillion in artificial money created to buy mortgage backed securities and treasury bonds(in place of actual humans purchasing them which would have required higher interest rates to get buyers) is not only going to stop but the Federal Reserve is actually going to start selling $10 billion per month of them at first and then increase the sales so that there will be a $50 billion dump per month by the 12th month.

The money the investors pay for the bonds will be liqudated (disappeared from existence - as there was fake money created out of thin air by the fed to buy the treasuries - so the federal government could use it to deficit spend -, and when actual investors buy the actual treasuries with actual money, that actual money will be used to subtract from the FEDs $4.5 trillion QE balance sheet of fake created money).

The federal government (not to be mistaken for the Federal Reserve bank) has been paying interest all along on the treasuries. The magic of the Quantitative Easing program was that the federal government was paying the Federal Reserve interest payments instead of actual investors.

Now that the Federal Reserve is selling the bonds (some of them have been held so long that they have matured, that is reached the end of their life, so the fed will have to use its balance sheet to purchase brand new bonds then sell them to the public investors as well as eventually sell the ones that havn't matured), that means that there will be a lot of investor $$$ to hunt for. The federal government will continue to pay the interest rates, but they will be with higher interest rates (except for the bonds the Federal Reserve sells to investors that haven't matured I suppose)

The national deficit this year is already projected to be at least $700 billion.

The Quantitative Easing won't add to the deficit or debt by itself (this $4.5 trillion Federal reserve balance sheet is part of the $20 trillion in debt the federal government owes or at least the balance of it that involved buying federal treasuries) but the artificial creation of money to buy treasuries enabled the interest rates to be lower since it reduced the amount of (actual) investor purchases of our bonds in past years (essentially preventing the need to raise interest rate yields to get all the required investors)

We already will need to raise interest rates to get the $700 billion in treasury bond purchases to finance the FY 2017 budget deficit.

Now we will need at first $10 billion more per month from investors to purchase (some of)the bonds the Federal Reserve magically bought from 2008 to 2017. The $10 billion will gradually be increased so that a $50 billion target per month is hit in 12 months.

It looks like there will need to be about $300 billion more investor dollars to be wooed in FY 2017 (on top of the $700 billion), and I suppose it will be $50 billion for all 12 months in FY 2018, so that will be an astonishing $600 billion in additional investor purchases of the bonds that year.

Interest rates will have to be increased to get this kind of investment.

The Federal Reserve always promised that this money wouldn't be inflationary because it would eventually be erased from existence. (that is the balance sheet would be reduced eventually)

Now we will see how high interest rates will need to be when we put the promise into practice.

Will we stop reducing the Feds balance sheet (it starts at a high $4.5 trillion) if another recession hits?

What will the bond market think if there isn't significant reduction before we stop reducing the balance sheet?

What if another QE program starts before the old one has seen the money liquidated?

What will investors think about that?

Edited by LamarkNewAge, : No reason given.


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Taq
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Posts: 7190
Joined: 03-06-2009
Member Rating: 3.2


(1)
Message 14 of 21 (820980)
09-29-2017 5:33 PM
Reply to: Message 8 by frako
06-25-2017 12:35 PM


frako writes:

I thhink te best option for the world would be to faze out humans as a workforce replace them with robots, use the profits to give everyone a minimum income some kind of score system so those that actually do something for humanity like science or jobs that cant be replaced get more, then slowly faze out money altogether.

What I have noticed is that humans need a job. When we don't have jobs and just sit around the results are pretty ugly. To use one example, there are indigenous tribes in Alaska that receive rather large incomes from mineral rights (i.e. oil money). Each person gets as much as $60k a year for nothing more than existing. What do these communities look like? Alcohol and drug abuse are rampant. Quality of life is piss poor. Education for kids is atrocious.

It seems to me that we humans derive our sense of worth from working. When that is taken away we tend towards destructive behaviors. So how do we supply people with work in a society without money and without a need for people making stuff?


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LamarkNewAge
Member
Posts: 906
Joined: 12-22-2015


Message 15 of 21 (820983)
09-29-2017 6:01 PM
Reply to: Message 14 by Taq
09-29-2017 5:33 PM


A Universal Basic Income.
The average income in the United States appears to be going toward $59,000 per person for 2017.

The world average should be over $11,000 for 2017 but that depends on how much worse the dollar gets. (Purchasing power in the world will average over $17,000 per person in 2017).

A truly universal (that is worldwide) income right of $250 per month (PPP or purchasing power parity) might be in order if one wants faster economic growth and the (near)end of abject poverty.

Just a start though.

A Universal Basic Income should be tied to the overall average income in the world.

It does not replace working either. (just a universal floor income, and working is irrelevant)


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