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Why Stronger Economic Growth Is So Important

If someone offered you $100,000 in 18 years or $92,000 in 35 years, which would you take? It's a no-brainer, right? Those figures represent the different prospects for an American, on average, under different economic growth scenarios. The difference between 2 percent and 4 percent annual GDP growth might not seem huge, but the effects pile up over time.

Between 2016 and 2026 the U.S. economy is projected to grow at just 1.9 percent per year on average, according to the Congressional Budget Office. While this is a slight improvement over the last eight years (1.4 percent annually), it pales in comparison to the 4 percent growth the U.S. economy saw between 1950 and 1973, or even the 3.2 percent we enjoyed from 1974 through 1981—a time better known for inflation than prosperity. Yet policy makers systematically undervalue changes like deregulation, spending cuts, and free trade that could nudge us closer to the stronger growth scenario.

Slower growth means not only that the economy takes longer to double but that the payoff for the average American is less. Since the population will increase more over 35 years than 18, that same doubled GDP will be shared by a greater number of people—about 32 million more, according to Census Bureau estimates—leading to less GDP per capita.

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  • I can't even||

    Slower growth also means government continuing to grow faster than the economy.

  • Lee Genes||

    Between 2016 and 2026 the U.S. economy is projected to grow at just 1.9 percent per year on average

    But projected pension fund investment returns are at 7.5%

  • UnCivilServant||

    CalPERS is a division of MiniTru.

  • Sevo||

    That 7.5% was the fantasy used by moonbeam to claim a 'balanced budget'.
    He could use a narrowed gaze or two.

  • Palin's Buttplug||

    Republicans call that bullshit "dynamic scoring".

  • kbolino||

    And yet that "bullshit" has had far more predictive power than any economic forecast by the Democrats. Amazingly, despite all the claims of lost revenue due to tax cuts, the only year the FedGov actually saw tax revenues decline was 2008, which had nothing to do with tax cuts.

  • Palin's Buttplug||

    Because modern Republicans are bigger Keynesians than any Democrat. When Reagan and Bush cut taxes they also expanded government spending faster than other presidents artificially juicing the economy. Each time ended badly too.

  • Sevo||

    Fuck off turd. No one cares about your lies.

  • kbolino||

    Except that dynamic scoring contradicts increased welfare spending. In adopting greater welfare spending, Republicans are ignoring dynamic scoring not embracing it.

  • ant1sthenes||

    Neither one is Keynesian, because that requires both spending to balance downturns and austerity to balance booms. They're just pro-spending.

  • Swiss Servator||

    'Why so low a projection?"

    /IL Pension

  • Sevo||

    "Why Stronger Economic Growth Is So Important"

    Because it will cause continual head explosions among those on the left, and we can never have too many of those.

  • The Late P Brooks||

    We could have more growth if we confiscated the wealth of the top five per cent and distributed it fairly to deserving Americans, who could then go on a wild spending spree. Because the best thing to do when you have a goose which lays golden eggs is to kill and eat it.

  • Rhywun||

    Workin' on it.

    /Bill Deblasio

  • Jerryskids||

    Why Stronger Economic Growth Is So Important

    Next up, why water and air are important.

    There's only one group of people I know of that think economic growth is a bad thing for humanity and I'd cheerfully accept a self-defense argument from anybody who wants to argue in favor of exterminating those hateful, evil, trollish, literally-inhumane bastards. Greed, for lack of a better word, is good - wanting more is what drove monkeys out of the trees and into Toyotas. Every material possession you enjoy, from an indoor bathroom and ready-made PBJ's to warm socks and Bic lighters is only available because some greedy bastard wanted you to fork over your dough for some of whatever he's selling. And everybody profits, everybody's better off, in a mutually agreed-upon trade.

  • pan fried wylie||

    "Well, huh, might as, might as well ask why is a tree good? Why is the sunset good? Why are boobs good?"

  • Mainer2||

    It's become a cliche at our house. There's always some new product, or improvement on an existing product, some new service. Could be as trivial as a better flip cap on a bottle of salad dressing, or car companies that are developing variable length connecting rods (which is fascinating by the way). I ask the wife, do you know what that is ? Yes, she sighs, it's the result of "free enterprise, competition and choice".

  • Bill Dalasio||

    Getting growth should be at the top of just about everybody's agenda. Bluntly the last ten years - Bush and Obama - have been horrendous. We haven't seen 3% growth in a decade. And given an aging population and declining labor force participation, that's going to have to come from productivity gains. And if you get growth, everything else starts to fall into place. Frankly, we're living in an era where most young people don't know what a strong economy looks like. They think this shit is normal.

  • Palin's Buttplug||

    We haven't seen 3% growth in a decade

    Yet personal wealth has exploded since 2009.

    http://www.wsj.com/articles/ne.....1457629307

  • John||

    Creating asset bubbles caused "personal wealth" to explode. Let me get my surprised face.

    Wow you are fucking stupid.

  • Palin's Buttplug||

    Shouldn't you be demonstrating your moral superiority back in the earlier abortion thread?

    Those heathens need to be taught some ethics, you know.

  • kbolino||

    The real damning thing is that all of this "growth" in personal wealth is in stocks and real estate, to the point that it comes at the expense of savings. If you are fortunate enough to already have a large income, or to have already owned assets that are being inflated, or to get lucky in the stock market, then it's great for you. If you are trying to build wealth in a responsible and sustainable fashion, then you are screwed.

  • Palin's Buttplug||

    RTFA. Deposit accounts reached a record $10.7 trillion.

  • kbolino||

    RTFA

    It's paywalled and the Google trick doesn't work any more.

    Deposit accounts reached a record $10.7 trillion

    I want to see the source of this data, including a breakdown by type of account and by income of the account holder.

  • WTF||

    Don't hold your breath, he's a lying Dem shill.

  • Palin's Buttplug||

    At least in aggregate, households appear well-positioned to weather a downturn in the stock market. In addition to the buffer from home equity, households also have a record $10.7 trillion in deposits, which include checking and savings accounts and certificates of deposit.

    While home and stock prices have recovered, Americans have been slow to take on new debts. The overall level of household liabilities is below where it was in 2008. The figures are not adjusted for inflation, making the still-low debt levels even more striking.

    The report, known as the Flow of Funds, presents its data only in aggregate. The report provides no details on how assets are distributed among households.

  • kbolino||

    The report, known as the Flow of Funds, presents its data only in aggregate. The report provides no details on how assets are distributed among households.

    That complicates the analysis, but it does seem like personal savings has fully recovered and then some as of Q3 2016. The last report I saw was for Q3 2013, where personal savings in constant dollars had not recovered.

  • kbolino||

    The actual reports for the last few years are here:

    Q3 2016
    Q3 2013
    Q3 2009

  • John||

    Bingo. The last 15 years totally fucked anyone who hadn't already accumulated some wealth.

  • kbolino||

    In the midst of renewed inflation and another real estate bubble, while labor participation has declined for all groups except over 55.

  • Set Us Up The Chipper||

    A real estate bubble is in the cards. House cost vs owner equivalent rent is starting to diverge again, that ratio is a sure fire way to spot a bubble.

    Chart here

  • Bill Dalasio||

    Gee, near zero interest rates make asset prices escalate. Who'd have thought?

    Nice to know you judge the success of an economy on how well rich people who own assets are doing.

  • kbolino||

    To his very limited credit, shriek is not a progressive Democrat. He's a "fuck you, I got mine" Democrat, which means he thinks rising inequality manufactured by the government is great, because it benefits him and he doesn't give a shit about the poor or average working man.

  • Palin's Buttplug||

    he thinks rising inequality manufactured by the government is great

    Funny how success today is a result of education or talent but some poor working jackass is a victim of government.

    I am sure that all changes when a GOP-man takes over.

  • kbolino||

    If education or talent were requisite for success, you would not be here commenting.

    It has nothing to do with the party in charge and everything to do with the policies the government undertakes. It is stupid to say that an institution that controls the money supply, can command more cashflow than any corporation by an order of magnitude, and can enforce its rule with the power of law, has no effect on the lives of individuals.

  • WTF||

    Pay your bet fuckstain.

  • Palin's Buttplug||

    Inflation is near dead. Asset prices are up anyway.

  • Sevo||

    Folks, if you keep feeding this pathetic piece of shit, it keeps coming back

  • Jimbo||

    Don't all of God's creatures, however repulsive, ignorant, rude, mean, ugly, abhorrent, revolting, disgusting, repellent, repugnant, offensive, objectionable, vile, foul, nasty, loathsome, sickening, nauseating, hateful, detestable, execrable, abominable, monstrous, noxious, horrendous, awful, dreadful, terrible, frightful, unsavory, hideous, grotestgue...wait, where am I?

  • kbolino||

    Inflation is near dead

    CPI 1/09: 211
    CPI 11/16: 241

  • Bill Dalasio||

    Are you really this fucking stupid? Really? The entire point of Quantitative Easing was to escalate asset prices. That was the fucking point. Raising asset prices while the rest of the economy is in the tank might be a great way to paper over solvency and liquidity issues, but it's hardly a model of a healthy economy.

  • Palin's Buttplug||

    Bullshit. The goal of QE is to stimulate the economy via lower interest rates and more available funds in the private market. If the Fed is buying US Treasuries then private investment moves to non-gov assets. Ultimately, the market decides stock prices and home prices.

  • Bill Dalasio||

    The market decides equity prices based on prevailing interest rates. Equity prices are calculated based on expected cashflows discounted to present value. This is really just Finance 101. And Treasury rates are pushed down by bidding up their value. Again, Finance 101 stuff.

  • John||

    http://thesmokinggun.com/docum.....eal-472930

    Talk about your pussy privilege. Twenty one year old porn star provides drugs and alcohol to three girls, the oldest of which was 14 and has sex with all of them and she gets probation. I think the age of consent is too high in most cases, but even I think 14 is a minor. And this bitch got three underage girls stoned and drunk and raped them and she walks away. That is just fucking appalling.

  • ||

    Are there any odds on whether ENB will take the moral high road or step up to defend her?

    I certainly don't believe the child prostitution hype, and the persecution of sex workers is terrible. At the same time, if sex workers are gonna have agency, the 21-yr.-old females need to say "This shit's illegal and not happening." or "This is going to feed into the whole child prostitution narrative, maybe we shouldn't record it." or whatever.

  • ||

    I certainly don't believe the child prostitution hype

    I guess I should clarify by saying that I don't intrinsically believe these 12, 13, and 14 yr. olds were tricked or oblivious into what happened nor is the whole affair part of some larger trafficking conspiracy.

  • Mainer2||

    Speaking of the new reefer madness style panic over "trafficking". I've seen two cop shows where the cute white girls were put into shipping containers to be sent over seas. So literal.

  • John||

    Under 14 is a child. I am about as liberal as it gets on age of consent things but 14 is underage by any objective measure. If you are 21 and having sex with girls under the age of 14, you are a fucking sicko. Beyond that, giving booze and drugs to anyone under the age of 18 and then having sex with them is appalling in its own right.

    That woman is a deviant sexual predator and should be locked up. If I were one of those girls' parents, I would have a hard time not just shooting her. She walked away with nothing because she is a woman. Had a man done that, he would have gotten decades if not life in prison.

    This case is a bigger outrage than the college student out in California getting six months. Yet, none of the people outraged about that are saying shit about this. I guess rape isn't rape rape when it is done by a woman.

  • Raven Nation||

    According to the article the other two girls were 12 & 13 - even worse.

    One quibble relating to: Had a man done that, he would have gotten decades if not life in prison...

    According to the article, in this case, two male co-defendants also got the 10 years probation deal. So, in this case only, matching sentences.

  • John||

    I missed that part. So fair enough. But I wonder if the male defendants were guilty of accessory or something and didn't actually have sex with the girls. If they did have sex with those girls, they should be shot too.

    Who the hell was the judge in that case?

  • ||

    Who the hell was the judge in that case?

    This maybe drives more at my point. I'm probably projecting but the only rationalization I can see is that the judge is equivocating like everyone is a victim in this case when it should be clear that as the age goes up personal responsibility should increase.

    If your 14-yr.-old can't solve the alcohol+porn slut+dudes+Xanax =? problem without showing their work, the stranger in a white van with a lost puppy equation might as well be rocket science.

    Everybody over the age of 18 should at least have their knees broken and, my point being, the *women* being the oldest and if we buy the whole 'women have (exceptional) agency' and/or 'teh patriarchy!' narratives should probably have their arms broken as well.

  • ||

    To avoid jumping back and forth, your average 14-yr.-old girl *should* be able to babysit 12 and 13-yr.-old kids. I understand if there are developmental issues or if she's not mature enough to take responsibility for 12 and 13-yr.-olds, but if she can't look at Xanax and alcohol and see what's coming or gets involved with multiple partners when the Xanax and alcohol comes out, the only difference between her and the 21-yr.-old is the number 8.

  • ||

    Ach! My kingdom for an edit button!

  • Raven Nation||

    Well, according to a, umm, friend who read the police report, there was sex between at least one of the men and one of the underage girls.

  • ||

    She walked away with nothing because she is a woman. Had a man done that, he would have gotten decades if not life in prison.

    The two 18-yr.-old men in the case got probation as well. Another 21-yr.-old woman only got 5 yrs. probation.

    I'm not saying they aren't children or that the perps shouldn't be locked in a cage. I'm just saying the normal 'fuck any/all personal responsibility' libertarian stance around these parts is counterproductive all the way around in this case. It's a lose-lose situation and the only way you wind up with agency and/or people winning is if somebody between the 14 and the 21-yr.-olds stands up and says, "This shit is wrong."

  • John||

    Sadly reality is not clean and neat. People don't reach a certain age and magically become adults. But the live is somewhere even if it is very fuzzy. And you have to draw it someone. I think 18 years of age is too high. But 12, 13 and 14 sure as hell is not. It may be close to the line but it is not over it by any reasonable definition.

    The other issue is the drugs and booze. Even if you think that a 13 year old is capable of consenting to sex with someone 8 years her senior, the booze and the drugs vitiate that consent in a way that it wouldn't with someone older. it is one thing for a 21 year old to get drunk and have sex they later regret. It is quite another thing for someone who is 13 and likely has little or no experience or understanding of drugs and alcohol to be provided such by someone and then end up having sex with that person. That is rape every bit as much as if she had given them a roofie.

  • Mainer2||

    One stated reason for slow growth under Obama has been uncertainty. That never made sense. In any situation, Obama will always go left. Of that you can be absolutely certain. He will always choose more regulation, more government control, higher taxes. He will always malign the innovators and entrepreneurs. He will always pander to the takers and use the government to punish his enemies. How can anyone say they weren't sure what Obama was going to do?

    As one of my buddies said, it's going to be safe to make money again

  • Sevo||

    I think the question was more along the lines of "What can he get away with?"

  • Mainer2||

    Fair enough. Uncertainty around just how brazen he would be.

  • Palin's Buttplug||

    You're an insane douchebag who no doubt loves our protectionist Trumptard and loathes free-trade low deficit Obama.

  • WTF||

    You're a lying shitstain who welshes on his bets.

  • kbolino||

    low deficit Obama

    Average yearly increase in the debt, under Bush, including 2008: $731 billion

    Average yearly increase in the debt, under Obama, excluding 2008: $990 billion

  • Palin's Buttplug||

    Bush started with an annual surplus you fool. Obama started with a $1.2 trillion deficit.

    http://www.politifact.com/trut.....istration/

  • kbolino||

    You said he was "low deficit". That is demonstrably false.

    Bush may have squandered a surplus but Obama has made absolutely no attempt to return to having a surplus. His second largest yearly increase in the debt was this year. He has used his veto power sparingly, but among his vetoes were lower spending bills.

  • Palin's Buttplug||

    Wrong. Obama supported the deficit killing Simpson Bowles before it was killed by members of BOTH parties in Congress.

  • kbolino||

    Nothing I said is wrong. He has not once used his veto power to keep spending down. If he signs the bills, he takes as much credit for them as Bush takes for the bills he signed.

  • Loss of Reason||

    Hey trollie troll

    You left out the tax revenue . You know since Obama has brought in the most money and spent even more. Let's even use your 1.2 trillion deficit (Which was rammed though by Dem
    Congress) in 2009. By today, we should be breaking even. What's the deficit this year? ...only 600 Billion

    Tax revenue -
    FY 2016 - $3.276 trillion.
    FY 2015 - $3.250 trillion.
    FY 2014 - $3.021 trillion.
    FY 2013 - $2.775 trillion.
    FY 2012 - $2.45 trillion.
    FY 2011 - $2.3 trillion.
    FY 2010 - $2.16 trillion.
    FY 2009 - $2.1 trillion.
    FY 2008 - $2.52 trillion.
    FY 2007 - $2.57 trillion.
    FY 2006 - $2.4 trillion.
    FY 2005 - $2.15 trillion.
    FY 2004 - $1.88 trillion.
    FY 2003 - $1.72 trillion.
    FY 2002 - $1.85 trillion.
    FY 2001 - $1.99 trilion.
    FY 2000 - $2.03 trillion.

    https://www.cbo.gov/topics/budget

  • Swiss Servator||

  • Swiss Servator||

  • I can't even||

    Is there somebody we should alert that he's off his meds?

  • Jerryskids||

    One stated reason for slow growth under Obama has been uncertainty.

    There have been any number of economists arguing that tax rates don't matter as much as stability in the tax rates. How can you make any sort of long-term investment when you have no idea what the tax rates are going to be a few years down the road? Whether the tax rates double or get halved, either way it screws your planning.

    Which, of course, is just a subset of the idea of "rule of law", the idea that you can plan your activities knowing ahead of time where the lines are drawn and fairly confident that they're not suddenly going to get moved. Who in their right mind would invest tens or hundreds of millions in any kind of factory, making 20 or 30 year commitments, knowing the EPA or the Labor Department could at any moment come up with some new set of rules and regulations making all your planning and investing worthless?

  • kbolino||

    Another reason would be the combination of expanded EITC and loose credit. The former puts money in people's pockets but only if they make below certain amounts, and the latter discourages people from saving. Put the two together and you've got a prime recipe for people of limited means to stay there and not find better opportunities or build the wealth necessary for long-term growth.

  • I can't even||

    It wasn't just the tax rate. It was rules and regulations. Colossal money pits like Dodd-Frank, and the flood of regulations flowing out of DC made people hesitant to take chances.

    Add in the uncertainty of never knowing if / when / how the employer-mandate was going to be enforced - which became a strong incentive not to grow a small business past 1000 employees.

  • Loss of Reason||

    Or Obamacare making it so you don't grow above 29.

  • Mainer2||

    At least when Chavez expropriated a companies property, he was honest. He just took it. The alphabet soup of agencies will take your wealth with rules. Of course, rules are negotiable. Nice factory you've got there, it'd be a shame if the EPA deems it to be a wetland. Nudge nudge.

  • Diane Reynolds (Paul.)||

    You can't have economic growth without economic justice.

  • sarcasmic||

    So many people conflate money with wealth. If a person's monetary income does not change, but the cost and/or quality of what they can buy goes down, then they are in fact more wealthy. They can buy more and better stuff with their money. Thing is, most people only look at the money, not what it can buy. Add a healthy dose of greed to this economic ignorance, and you get a recipe for more socialism and less wealth.

  • The Late P Brooks||

    car companies that are developing variable length connecting rods

    *gallops off to google*

    Huh. I had not heard about this. Interesting. I don't see that staying together at 10,000rpm, but....

    Have you heard about the five stroke engine?

  • Mainer2||

    Now it's my turn to google.

    The continual improvement of the internal combustion engine is a perfect illustration of the power of free enterprise. It's this sort of thing:

    Freevalve - camless engine
    https://www.youtube.com/watch?v=OZWeNPi2XkE

    that makes it damn difficult to see how electric cars dislodge IC engines

  • John||

    It is so funny to watch EC cars run into the laws of physics and the limitations of batteries. The next time someone lauds the future of ECs tell them "you know what would be great? If we could find a source of energy that could be used so efficiently and stored so much potential energy that say I don't know a gallon of it could power a three thousand pound automobile at sixty miles an hour for upwards of thirty miles., " And then watch their expression as the joke finally dawns on them.

  • Mainer2||

    The appeal of electric cars is understandable. Quiet, instant torque, simpler with no transmission. But they have been trying to overcome the same limitations for over 100 years. Range, charging time, cold weather performance, declining performance as batteries discharge, weight. Of course those things have gotten better, but IC engines have continued to develop and stay ahead. There is always a chance of a breakthrough, but I just don't see electrics leapfrogging gas powered cars.

  • Mainer2||

    OH, and that gallon of magical stored energy costs less than a gallon of milk.

  • Set Us Up The Chipper||

    The Volt is the best EV-like vehicle on the market. Plugin range is about 50 miles (covers my commute) with the IC motor giving it unlimited range. It takes advantage of two existing and vast infrastructures: the residential electric grid and the ~115 thousand gas stations in the US.

  • The Late P Brooks||

    If you distort the price of financial risk (i e, interest rates, for you slow kids like Shreeek) you should expect a lot of low-return malinvestment. And, of course, investors chasing yield will drive up alternative asset prices.

  • Set Us Up The Chipper||

    For instance, take a look at the prices of air cooled Porsches. Even a ratty but complete 912 will get fetch over 15k with nice ones topping 30K. The most maligned of all air cooled 911's - the 2.7 liter cars - are above 30k for drivers. Forget about a 3.2 liter G50 Carrera...all of those cars used to max out in the 20's less than 8 years ago.

  • Mithrandir||

    The real reason increased Economic growth is so important at this point in time is in increasing government revenues.

    Currently the average interest rate the government is paying on debt is about 2.26%. If the average interest rate increased to 3.75% (this could be higher if we start seeing signs of inflation), by 2026, a full 22% of our annual revenues will be going towards paying interest. Just interest. Over a full 1/5 of our revenues. That's not good.

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