11-30-2016, 04:16 PM
(11-30-2016, 12:14 PM)Warren Dew Wrote: David Horn:
(11-30-2016, 11:22 AM)David Horn Wrote: Declining rates of fertility is affecting many nations, and will require a different, non-growth related economic model. We don't have one yet. For all of that, Japan, the first to hit the wall hard, is not failing or becoming a third world nation. We don't know how to talk about zero, to say nothing about negative, growth in a positive way yet, but we better learn. Worldwide ZPG isn't all that far in the future.
Exactly what I've been addressing since the beginning of this conversation, as quoted above. And while no country has yet adopted a successful model for this situation, I've outlined one above; more debt is likely to be a key part of the new economic model, as I pointed out at the beginning of this subthread, as well as the other items I suggest at the links I provide.
That said, the model will be a slow growth model, not a no growth model; we'll still get the benefits of technological improvement, even if the population isn't growing. If we handle it properly, per capita growth will be as high as ever, and living standards can continue to rise. We just have to avoid some of the political traps I discuss above to the extent that we can.
I'm sure you will correct me if I am wrong, or try to. But I don't buy the more debt idea. It's not too popular with the left OR the right, either. Maybe others can correct me too.
The only way to deal with more debt by just lowering taxes, is with more QE. Print more money. This will eventually increase inflation and cause more bubbles in the economy, and if interest rates rise because of inflation, more of our tax money will go to cover the debt. That means less money for the things we need from government, and higher taxes to pay for less service. I don't agree with this policy, because I think we need government and what it provides.
I agree, though, that we need policies that take account of slower growth and population stabilization.
The biggest trap to avoid is Reaganomics. Lowering taxes does not necessarily stimulate growth in the economy. We can't factor that in to any policy.