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Old 08-03-2023, 01:43 PM
 
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Quote:
Originally Posted by ed06288 View Post
Let's circle this back to the original point I was trying to make. The GDP per capita growth rate fell around the year 2000 or so and has never recovered. So while the economy is still gaining jobs, it's not gaining them at the rate it should be. This is due to worldwide government debt levels rising, which crowds out the private sector. Over time this erodes the standard of living. I was hoping the audience here would be more receptive to the idea of economic stagnation as it's a more non-partisan way of explaining the problems we're facing in the world. I believe the world faces economic issues that masquerade as social issues.

With respect you are being very careless with the facts*. Real per capita GDP right now is the highest it has ever been.


1. Since around 1960 real per capita GDP growth rate has increased nicely for several years then decreased or seen a decrease in the rate of increase during recessions in orderly and repeating fashion.

2. Real per capita GDP most certainly did recover after the '08 bust and again after the covid bust.


https://fred.stlouisfed.org/series/A939RX0Q048SBEA


3. Worldwide aggregated tax burdens are too high. Regulatory costs as well.


_____________

*If you read someone claim the world is ending because we broke an old trend line and have subsequently not recovered to the point where that trend line would have been unabated..........throw that stuff in the trash. That kind of thing is PT Barnum fantasy land. Recessions, slowdowns and pandemics happen.

I mean sure if the ~'83-'90 trend line had held to today real per capita GDP would be around $95/100K in 2012 dollars. It's simply preposterous nonsense to think we should be there.
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Old 08-03-2023, 04:39 PM
 
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I think the commentators here underestimate how subtle the new trend line is of new economic growth. Look at my image below and now go back and look at your own chart on the FRED database. We are on a consistent trend of lower growth

I would argue that taxes are too low because they increase worldwide government deficits, but a better way of correcting the problem is to cut both taxes and spending.


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Old 08-03-2023, 05:10 PM
 
19,801 posts, read 18,104,944 times
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Quote:
Originally Posted by ed06288 View Post
I think the commentators here underestimate how subtle the new trend line is of new economic growth. Look at my image below and now go back and look at your own chart on the FRED database. We are on a consistent trend of lower growth

I would argue that taxes are too low because they increase worldwide government deficits, but a better way of correcting the problem is to cut both taxes and spending.

And we are way over per a longer term trend line. This nonsense is always time horizon specific. IOW just because the all time real price high for silver was set around 1150AD London does no mean investors can't make money with silver now. And per your own chart we were over the trend line for many years and have been below it for 12/13 or so.

FWIIW debt service as a percentage of GDP is less now than in the recent past as well.


___________________

ETA - I withdrew a comment that I need to more precisely explain.

Last edited by EDS_; 08-03-2023 at 05:31 PM..
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Old 08-04-2023, 04:46 AM
 
163 posts, read 49,309 times
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EDS_ that way of thinking is actually incorrect in regards to economics. In economics, everything is relative. Let's use an example.

Lets say every month we create a 100,000 jobs in the american economy. And by year's end, you would create 1,200,000 jobs. This would still be positive growth, but the problem is that the replacement rate is 125,000 jobs. So you're actually short 300,000 jobs in the economy by years end because growth was below trend. Unemployment would actually rise.

For every year that is below 2.2% GDP per capita growth, you need to offset it with a year that is above 2.2% growth. That isn't happening. And this is why you're seeing a decline in the savings rate, money velocity, and productivity. Unemployment supposedly stayed low but the decline in the labor force participation rate raises an eyebrow.

Debt as a percentage of GDP is well over 100%, the burden of the debt is higher than ever.
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Old 08-04-2023, 05:00 AM
 
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Our situation is still really good when compared to something like Japan, where their charts will even go negative at times. But take a look at India's GDP per capita. The chart goes vertical but we know youth unemployment is 25%. And this is because of the fact that gdp growth did not nearly keep up with their massive population boom.
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Old 08-04-2023, 08:26 AM
 
19,801 posts, read 18,104,944 times
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Quote:
Originally Posted by ed06288 View Post
EDS_ that way of thinking is actually incorrect in regards to economics. In economics, everything is relative. Let's use an example.

Lets say every month we create a 100,000 jobs in the american economy. And by year's end, you would create 1,200,000 jobs. This would still be positive growth, but the problem is that the replacement rate is 125,000 jobs. So you're actually short 300,000 jobs in the economy by years end because growth was below trend. Unemployment would actually rise.

For every year that is below 2.2% GDP per capita growth, you need to offset it with a year that is above 2.2% growth. That isn't happening. And this is why you're seeing a decline in the savings rate, money velocity, and productivity. Unemployment supposedly stayed low but the decline in the labor force participation rate raises an eyebrow.

Debt as a percentage of GDP is well over 100%, the burden of the debt is higher than ever.

1. My way of thinking per economics is just fine. And to be crystal clear my point above is all about relativistic analysis.

1.1. It's a bit much for me, a guy who has been in economics in one way or another every working day since college to be lectured by a guy who until hours ago didn't know the food and energy are included in monthly inflation releases or the The BLS controls and releases the CPS etc.

2. I don't agree with some of the details but your overall illustration per job growth is stipulated.

3. For every year real GDP growth rate is below 2.2% we will be below one of the trend lines people like to hang their hat on and also above a trend line beginning 10/12 years earlier.

3.1. Due to many factors we are not going to see sustained 2.2% PC-RGPD for a while. Probably the only path out of the tax rake vs. debt cost hole is to return to a slower growth, low interest rate environment.

4. Funny........you accuse me of not understanding relativism in economics and you close with a nominal point.

Debt vs. GDP is is around 130%. I don't have data in front of me so this next bit is working without a net. But for most of the last 30 years annual debt service vs. GDP has been declining (low interest rates again). I'm guessing last year debt service costs increased a lot. But there is no way they are, "higher than ever" (unless you violating you own charge and thinking in nominal terms).......the recent high IIRC was around 1990 @ 3.2% of GDP. Until covid we were way below that. '22 (less then 2% IIRRC) and '23 will be below that as well. Going forward if interest rates stay high it's going to get bad.


Excuse the typos.....big hurry.
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Old 08-04-2023, 10:42 AM
 
163 posts, read 49,309 times
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Okay so I'm wrong about the CPI part but I think I confused it with core inflation.

I wouldn't say anything about a job growth argument is "stipulated." You can clearly see a rollover in 2008 and a new trendline gets established. This means a lot of people got displaced in the great recession.

How is my last point a nominal argument? Debt to GDP ratios have been rising.
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Old 08-04-2023, 10:59 AM
 
163 posts, read 49,309 times
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I'm placing a heavy emphasis on the lower/higher trend line stuff, which is why I was very hard on your silver analogy. I am saying we do in fact have to get back to prior trend lines of growth in most developed countries or more social problems will develop.
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Old 08-04-2023, 01:43 PM
 
19,801 posts, read 18,104,944 times
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Quote:
Originally Posted by ed06288 View Post
Okay so I'm wrong about the CPI part but I think I confused it with core inflation.

I wouldn't say anything about a job growth argument is "stipulated." You can clearly see a rollover in 2008 and a new trendline gets established. This means a lot of people got displaced in the great recession.

How is my last point a nominal argument? Debt to GDP ratios have been rising.
1. You've got it right now per CPI..... core rates ex of food and energy and a headline rates which are usually not seasonally adjusted and include food and engird are issued monthly.

2. My stipulation was only to your point that total jobs may increase while U3 worsens over given periods of time.

3. You said, "the burden of the debt is higher than ever."

A. In relative terms that is a false statement. The burden of the dept was significantly higher around 1990.
B. Only in nominal terms is it correct.

Last edited by EDS_; 08-04-2023 at 01:59 PM..
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Old 08-04-2023, 01:57 PM
 
19,801 posts, read 18,104,944 times
Reputation: 17290
Quote:
Originally Posted by ed06288 View Post
I'm placing a heavy emphasis on the lower/higher trend line stuff, which is why I was very hard on your silver analogy. I am saying we do in fact have to get back to prior trend lines of growth in most developed countries or more social problems will develop.
1. I know you are placing heavy emphasis on certain trend lines.

2. IMO my silver trend line bit is perfect. Very long term silver is on a losing trend line. More recently a winning trend line. Since 2012 a losing trend line. Point being whomever picks the the length of the trend line picks the winner.

3. We are in the cash cow stage - well beyond most developed countries. ~60% of taxpayers on any given day are not net positive tax payers. Roughly a 1/3 of us pose astounding lifetime costs on everyone else. Educationally we are headed in the wrong direction and on and on. Sustained 2.2% real per-capita GDP growth isn't going to happen given the penalties imposed by our bottom 1/3 not to mention tax burdens well beyond optimal levels and increasing regulatory burdens as a topper.

Touching ongoing 2.2% will require a legit long wave type advance. Could be space, could be medical, could be energy (fusion maybe), could be a real educational renaissance etc. Otherwise no way.
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