What Will Bring The Economy Back?

[Burke]

Only one thing: a free market revolution, IMO.

But that's not likely anytime soon.

So, what do you think?

[108]

i don't see whatever a "free market revolution" is, bringing back demand

wages have been stagnating for quite a while now, people are saving, paying off debt, and just aren't spending for the hell of it

there are ways to increase demand, but they aren't supply-side, so that wouldn't interest you

[tegator80]

A big-time innovation, but where will it come? It could just as likely to be in China or Germany as here.

But if you want an ugly answer, it will be a revolution (throw the bums out and don't look back). Otherwise I am afraid we are on the path we are on. And we are in the new normal until we reach the point that we can't print more money or else cause hyper inflation.

And the historic way of solving your economic woes is to "liberate" some country that has "issues". Mexico seems to be a very good place to start. Why have ammo in your gun and die of starvation when there are plenty of resources at your beck and call?

[G8trGr8t]

eliminating oil imports by using nat gas as a surface transportation fuel for fleet vehicles, trains, and big rigs and taking homes off of fuel oil and getting them on nat gas. cuts the cost of transport of goods and keeps billions here in this economy versus sending it overseas. reduce oil demand and gasline prices would come down too.

we have the solution but are too anti-carbon to incorporate it. all that cash wasted on clunkers and solyndras would have us well down the path by now

[LittleBlueLW]

A nice sized war ought to do it.

[gatordowneast]

Won't be one thing but a combination.

#1 would be Business Confidence. (no confidence in our political situation and POTUS)

That will create robust hiring, which increases consumer demand as you have millions more in work force. We are still down about 4.5 M workers from our peak with a 15 M increase in population so at 6 % unemployment we should have an additional 10 M workers now than we did in 2007. That is a helluva lot more $$ circulating.

#2- Repeal virtually all regulations enacted during last 5 years

#3- Repeal and replace Obamacare....baby steps. Keep several components...throw out the rest

[gator421]

Nothing.

[Matthanuf06]

Originally Posted by Burke

Only one thing: a free market revolution, IMO.

But that's not likely anytime soon.

So, what do you think?

Agree, although that will take years. In conjunction we need to drastically reduce deficit spending.

Folks, there is no fix. This is probably the best it'll be for awhile. Sooner or later the FED and fiscal stimuli will not be able to prop up the economy. The velocity of money will hit, inflation will rise, the dollar will plummet.

Actually the only other thing that would fix the economy is a technological revolution.

[Burke]

The prerequisite to prosperity is economic freedom. When people are free to produce, trade, and keep the product of their labors, you have fabulous wealth. When you have looters in govt and half or more of the population is living a parasitical existence off the other half, you have decline and eventual destruction.

When all the current "solutions" are more govt intervention, more of the poison that's killing us, there is no hope for immediate improvement.

It's just a case of how bad it has to get before people here learn that and if they ever do.

[108]

Originally Posted by Burke

The prerequisite to prosperity is economic freedom. When people are free to produce, trade, and keep the product of their labors, you have fabulous wealth. When you have looters in govt and half or more of the population is living a parasitical existence off the other half, you have decline and eventual destruction.

When all the current "solutions" are more govt intervention, more of the poison that's killing us, there is no hope for immediate improvement.

It's just a case of how bad it has to get before people here learn that and if they ever do.

socialistic intervention is a byproduct of the insecurity and inequality caused by capitalism

it is essential to the inherent problematic qualities of capitalism

without security, humans act like animals, and unfettered capitalism is 'survival of the fittest'

yes, capitalism has created more wealth and brought more people out of poverty then any other system, but it didn't do it on its own....capitalism and democracy weren't really harmonious until the New Deal came in, and gave people some security that capitalism doesn't afford

that is being eroded now with the power being shifted back upwards for the last few decades since Reaganomics

the trick is to find the right balance between economic freedom and government that benefits the most while not hindering innovation, and there are a few countries that are doing just that...

the answer isn't one or the other

[channingcrowderhungry]

Increased demand via lower taxes and smaller federal government.

[108]

Originally Posted by channingcrowderhungry

Increased demand via lower taxes and smaller federal government.

the problem with smaller government is that, essentially it would just be a transfer of services from public to private....and the areas that are problematic, the private sector has shown no ability to keep costs in check......so where does the demand come from?

[cocodrilo]

A time machine. Go back and not invade Iraq, don't bail out crooks with taxpayer money, and otherwise use common sense.

[HALLGATOR]

The problem with redundant regulations that stymie the opening of small businesses goes back a lot further than five years but I do believe this is a big impediment to growth.

[ThePlayer]

Reform the tax code.
Reduce corp tax rates.
Unwind regulation nation.
Delay Obamacare for 3 years.

[Matthanuf06]

Originally Posted by 108

the problem with smaller government is that, essentially it would just be a transfer of services from public to private....and the areas that are problematic, the private sector has shown no ability to keep costs in check......so where does the demand come from?

And the government can? Oh, they just devalue the dollar so the real cost is higher but you just don't "see" it

[108]

Originally Posted by Matthanuf06

And the government can? Oh, they just devalue the dollar so the real cost is higher but you just don't "see" it

It's not either or, services from public to private isnt going to create demand

[108]

My suggestion is to implement cost controls in domestic areas of high inflation due to competition being limited for various reasons

Put more money in the hand of consumers

[MichaelJoeWilliamson]

Lot's of people are suggesting that we are in for a period of slow growth, a period that might last decades. If that is right, there are some real implications. To wit;

But I think it is a real problem, because we are not prepared for low growth: culturally, economically, or psychologically. The peasants of 1800 did not expect to be noticeably better off than their parents. The children of today still carry the cultural expectation that 2-3% annual income growth is the normal state of affairs. Yes, I know, they haven't gotten that for quite some time. But culturally, we experience this as a deviation that needs to be explained, usually in terms of someone who's stealing the surplus. We don't see it as the natural state of affairs, or even a possible natural state of affairs, though it is actually the growth that is highly abnormal.

This has obvious political implications: if the growth doesn't arrive, voters will assume that the guy in charge has somehow screwed things up. And the fights over a no-longer-growing pie will become more and more vicious. The modern welfare state was built by and for a rapidly growing economy. It is a lot easier to redistribute when you are taking a little bit ot of someone's annual raise than it is when you are asking him to give up some of what he's already got. This is one of the reasons that I don't by the "Republicans are doomed" narrative which has lately been popular on the internet: if the taxes needed to support public sector employees and the welfare state have to come out of stagnant middle class incomes--and eventually, the laws of mathematics say they will--then the Democratic coalition is going to shatter. How much of our 21st century welfare state could be financed by heavier corporate taxes on our 19th-century-style economy? It seems unlikely to be enough.

Megan Mcardle

[108]

Originally Posted by MichaelJoeWilliamson

Lot's of people are suggesting that we are in for a period of slow growth, a period that might last decades. If that is right, there are some real implications. To wit;

Megan Mcardle

Do you think that a shift towards supply-side economics of the last 3 decades has in-part played a role with wage stagnation?