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^^It's what we did to Japan. However, with most of the growth occurring outside of the US it's only a speed bump.
Japan's economic woes are largely the result of its long demographic decline. If projections prove correct, the country is slated to lose 20 million people by 2050, a 15% decline. And those Japanese who remain are going to be much older. Factor in the fact that the country continues to suffer from its enormous securities and real estate bubble from the late 80s and early 90s--itself a failure of policy and response--and you have a witch's brew of problems.
It will happen in a much larger and much more drastic way with China. If demographers are correct, China's work force will lose 250,000,000 during the same period. In other words, China will get old before it gets rich. Meanwhile, the US workforce is predicted to grow by approximately 50,000,000.
Not a Trumper by any stretch of the imagination, but one-way trade policies and high corporate taxes contributed to anemic American economic growth from 2000 onward. That and the overreliance on places such as China for our supply chains. It will be interesting to see what happens over the next 5-10 years.
Japan's economic woes are largely the result of its long demographic decline. If projections prove correct, the country is slated to lose 20 million people by 2050, a 15% decline. And those Japanese who remain are going to be much older. Factor in the fact that the country continues to suffer from its enormous securities and real estate bubble from the late 80s and early 90s--itself a failure of policy and response--and you have a witch's brew of problems.
It will happen in a much larger and much more drastic way with China. If demographers are correct, China's work force will lose 250,000,000 during the same period. In other words, China will get old before it gets rich. Meanwhile, the US workforce is predicted to grow by approximately 50,000,000.
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Where are all the babies being made here?
Also, please keep in mind that the future differs greatly from the past. Robotic manufacturing is on the cusp of taking hold. It will be driven by big firms and countries....Apple, Japan, China...
It will be the distribution of income which will be more important once iPhones are made with almost no human labor...right now perhaps 2+ million (or more) are making them. This applies to many other industries also.
We aren't making enough babies here which is why our demographics are such a huge drag on growth and we require tons of liquidity and stimulus to hover around 1.5% growth. As time moves on it will only big a bigger drag. We have a couple of decades to catch up to where Japan is.
The amount of intervention from the federal reserve and government is only going to increase.
We aren't making enough babies here which is why our demographics are such a huge drag on growth and we require tons of liquidity and stimulus to hover around 1.5% growth. As time moves on it will only big a bigger drag. We have a couple of decades to catch up to where Japan is.
The amount of intervention from the federal reserve and government is only going to increase.
We are making less babies and to backfill we need immigration. Japan’s problems are in large part due to population growth issues and a restrictive birthing policy which they have loosened but it went on far too long and people have permanently shifted their mindset there
Japan's economic woes are largely the result of its long demographic decline. If projections prove correct, the country is slated to lose 20 million people by 2050, a 15% decline. And those Japanese who remain are going to be much older. Factor in the fact that the country continues to suffer from its enormous securities and real estate bubble from the late 80s and early 90s--itself a failure of policy and response--and you have a witch's brew of problems.
It will happen in a much larger and much more drastic way with China. If demographers are correct, China's work force will lose 250,000,000 during the same period. In other words, China will get old before it gets rich. Meanwhile, the US workforce is predicted to grow by approximately 50,000,000.
Not a Trumper by any stretch of the imagination, but one-way trade policies and high corporate taxes contributed to anemic American economic growth from 2000 onward. That and the overreliance on places such as China for our supply chains. It will be interesting to see what happens over the next 5-10 years.
I'm talking about about Japan of the 80s and 90s when they were going to be a global superpower. Plenty detailing what the US did to slow them down...
We are making less babies and to backfill we need immigration. Japan’s problems are in large part due to population growth issues and a restrictive birthing policy which they have loosened but it went on far too long and people have permanently shifted their mindset there
And, given time, even immigrants will be hard to find. Mexico's fertility rate is headed for 2.0, with an aging population, so we can't count on them for much longer.
If you look at the spacing of the last 5 recessions (@69YO I've been thru 5), it's roughly 8-10 years apart. So if we know our history, why should we be surprised when it happens!
You should really read up on this subject. A few trade sanctions by the Americans would not have taken down the world's second-largest economy at its zenith. It is a ridiculous assessment. Doing so was the equivalent of shooting a Nerf pistol at a charging rhino.
Instead, the Japanese economy failed due to its own inner contradictions and insularity, not to mention the cozy relationship between government regulators and its largest corporations.
That little NPR snippet you cited doesn't really speak to the real reason for Japan's economic decline in the late 80s, namely the huge speculative bubble that has to be one of the most insane of all times. As one example, due to freewheeling money policy, the Nikkei tripled in value between 1985 and 1989. Because Japanese banking regulations were loosey-goosey and regulators looked the other way on large number of loans, Japanese banks got into huge problems in terms of speculative lending, often actually borrowing money to lend money. And, of course, Japanese corporations were cooking their books in ways that would land an American executive in jail.
Finally, there was the most insane speculation of all: Japanese real estate. At one point, commercial real estate in Tokyo was 350 times more expensive than comparable real estate in Manhattan. By valuations of the time, the land on which the Imperial Palace sat was worth more than the entire state of California.
So while academics such as Paul Kennedy were writing books that supposed Japan's inevitable rise to world economic dominance, the underlying fiscal structure supporting Japanese growth was shaky. Japanese central bankers finally took away the punch bowl, the damage was already done. The Nikkei plunged 40% in a three-year period. Today, it stands at roughly 25% of its 1989 heyday. That means a LOT of Japanese wealth evaporated into thin air over the past three decades. And a few American trade sanctions had bupkis to do with it.
I don't know if this would stand up to scrutiny by an economist, but the best differentiation between recessions and depressions I've heard is this: A recession is a price adjustment while a depression is a balance sheet adjustment. In that sense, the Japanese had a catastrophic Everything Bubble, where any and all assets were badly overpriced resulting in malinvestment that ultimately made no sense. The only saving grace of the Japanese economy at that time was the diligent savings of individual Japanese. The debt in the Japanese system was at toxic levels in the late 80s and the Japanese government never had the political courage to take it on in a forthright manner.
All of this couldn't have happened at a worse time for the Japanese with their reliance on a export manufacturing model. There were the rising manufacturing powers in Asia, places such as South Korea and China that challenged Japanese preeminence, not to mention the aforementioned declining demographics. And because Japanese government regulators and central bankers were slow to change the structural issues in the private economy, namely the cozy relationship between manufacturers and banks, the death spiral has continued to this day. The debt-GDP ratio in Japan is today around 238%, a staggering amount. And with a declining population, there seems to be no realistic way for them to address matters.
Today, China is basically standing on the same precipice of extraordinarily high leverage and slowing demographics, not having learned the lessons of Japan.
Last edited by MinivanDriver; 02-29-2020 at 06:49 AM..
Also, please keep in mind that the future differs greatly from the past. Robotic manufacturing is on the cusp of taking hold. It will be driven by big firms and countries....Apple, Japan, China...
It will be the distribution of income which will be more important once iPhones are made with almost no human labor...right now perhaps 2+ million (or more) are making them. This applies to many other industries also.
We've always been a nation of immigrants. Unless some idiot staunches immigration, the country's population will continue to grow. Meanwhile, the rest of your argument doesn't recognize that while technology has always destroyed jobs, it also creates new ones.
Today's worker is five times more productive than his counterpart in 1955, yet unemployment in this country is currently below 3%, with a workforce participation rate that's 8% higher.
Last edited by MinivanDriver; 02-29-2020 at 06:56 AM..
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