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We can have profits without growth... for a while. But there must be growth in profits, for equities to sustainably rise. Stock markets reward not the maintenance of profits, but the expectation that profits will be greater in the future. Loans are given not with the aim of keeping an enterprise functioning as before, but with the expectation that it will expand. Houses are bought with the understanding that their value will rise.
The basic assumption of capitalism (and for that matter also of socialism), is that the future will be bigger and better. A modern economy - regardless of the "-ism" - can't function unless it grows.
And if collectively we grow despondent over perceived lack of growth - guess what! - it will be a self-fulfilling prophesy. The result is Lawrence Summers' "secular stagnation".
Another of America's traditional strengths has been an almost child-like, quietly imbecilic optimism... a dogged faith in growth. Lose that faith, and we lose our advantage.
Massive increase in Central Bank induced DEBT, ALL DEBT - public, personal, and corporate - has reached it's limit to effectively "goose" demand and it's counterpart, production.
Developed countries populations are aging even those that are expanding. And some are shrinking.
Google 'diminishing marginal productivity of debt'.
Maybe we should look someplace other than monetary metrics like "GDP per capita" to guide us towards a sustainable, life-affirming, happy future?
Massive increase in Central Bank induced DEBT, ALL DEBT - public, personal, and corporate - has reached it's limit to effectively "goose" demand and it's counterpart, production.
It peaked in 2007 at 1.25 and then trended down to 0.96 at start of 2015.
Yes it is still high by long term historical standards but I don't think it is accurate to describe household debt (at least as a percentage of disposable income) as increasing.
We had a 50 year period starting in 1946 where everything went great. That's over. Life's tough. Get over it.
Unfortunately this is the answer, and if other countries predict our future, instead of Americans coming together to bring the whole country up, the haves will just continue to pounce and berate on the have nots until very few haves are left.
Of course you can be profitable without growth. You simply scale down output to match anticipated market demand.
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