Free Thinker and Denner, on the issue of 'growth', I watched that youtube video of the Tampa malinvestment and read your comments but I don't agree with your comments about what it means.
Real growth is an increase in aggregate assets. Real assets are characterised by the possessory right to a future income stream beyond one year. When you say that 'growth' is 'inflation' you are talking about nominal growth of GDP and you are not talking about real growth of real assets. There is a difference which says a lot about how the focus on the GDP metric distorts the appreciation of what real growth is.
Consider Houses...are they real assets or are they consumable goods, or do they embody part of both? I suggest that houses are only assets to the level of their rental value...above that the resources allocated to them are a luxury consumption. We went through a period of confusing nominal housing value with saving assets and we did not appreciate the degree to which the increasing leverage drove the housing prices to a malinvestment bubble. Government tax policy and financial engineering in response to government bank regulation channeled an inordinate amount of cheap capital into housing relying on the confusion that it was an asset.
Houses and retail strip shopping centers are not growth assets....they depend on real production for thier utility and they are better understood as part of consumption. Shure a shopping center can provide a possessory right to a future cash flow if it is rented...but its rental income depends on consumption which in turn depends on the real growth of producing and maintaining real assets...that creates real sustainable jobs.
If you want to consider future growth in the U.S. you have consider the investment in new factories or the improvement of processes and the expansion of production in existing factories, including information systems and robotics which improve productivity and quality. You need to consider investment in agriculture...irrigation, fertilization, computer satelite technology and machinery that increase yeild and productivity. Think about the improvement and replacement of and in capital equipment, planes, trucks, mining equipment. Think about the factors of production in the transportation of goods, the improvement of ports, railways, ships. Consider improved technology in the production and transport of energy, the generation of electricity and its distribution. If you look only to houses and strip shopping centers you are missing the point.
What the U.S. needs to grow is to reform its fiscal policies to attract investment in the factors of production....that is where jobs come from and that is where viable investment in housing and shopping comes from after the jobs from production are sustained. Our fiscal policies have for more than a decade discouraged investment in production in the U.S. in favor of consumption. The failure to invest in production domestically is what has resulted in slow and failing real growth, and potentially permanent unemployment at the marginal skill level.
The U.S. suffers from a failure to invest in the creation and production of assets. It suffers from an ecnomic class that cannot tell an asset from a cheeto. It suffers from a policy confusion that cannot distinguish between the growth difference between investment and consumption in the GDP metric. It suffers from a political class that confuses Private Sub S Corporations that actually pay the highest taxes with Multinational Public C Corp. corporations which buy favors to avoid paying taxes.
If you drive around and look at failed stupid housing projects next to a dump, overimproved by local regulation and hubris, that only an idiot would have financed in the first place, and you refer to vacant shopping centers becasue the former customers don't have jobs, or have moved away, or more convenient centers have been built in better locations, and you conclude that the U.S. does not need growth, then you have been snared in the net of general confusion about what is growth and how is it different from consumption.
Real growth is an increase in aggregate assets. Real assets are characterised by the possessory right to a future income stream beyond one year. When you say that 'growth' is 'inflation' you are talking about nominal growth of GDP and you are not talking about real growth of real assets. There is a difference which says a lot about how the focus on the GDP metric distorts the appreciation of what real growth is.
Consider Houses...are they real assets or are they consumable goods, or do they embody part of both? I suggest that houses are only assets to the level of their rental value...above that the resources allocated to them are a luxury consumption. We went through a period of confusing nominal housing value with saving assets and we did not appreciate the degree to which the increasing leverage drove the housing prices to a malinvestment bubble. Government tax policy and financial engineering in response to government bank regulation channeled an inordinate amount of cheap capital into housing relying on the confusion that it was an asset.
Houses and retail strip shopping centers are not growth assets....they depend on real production for thier utility and they are better understood as part of consumption. Shure a shopping center can provide a possessory right to a future cash flow if it is rented...but its rental income depends on consumption which in turn depends on the real growth of producing and maintaining real assets...that creates real sustainable jobs.
If you want to consider future growth in the U.S. you have consider the investment in new factories or the improvement of processes and the expansion of production in existing factories, including information systems and robotics which improve productivity and quality. You need to consider investment in agriculture...irrigation, fertilization, computer satelite technology and machinery that increase yeild and productivity. Think about the improvement and replacement of and in capital equipment, planes, trucks, mining equipment. Think about the factors of production in the transportation of goods, the improvement of ports, railways, ships. Consider improved technology in the production and transport of energy, the generation of electricity and its distribution. If you look only to houses and strip shopping centers you are missing the point.
What the U.S. needs to grow is to reform its fiscal policies to attract investment in the factors of production....that is where jobs come from and that is where viable investment in housing and shopping comes from after the jobs from production are sustained. Our fiscal policies have for more than a decade discouraged investment in production in the U.S. in favor of consumption. The failure to invest in production domestically is what has resulted in slow and failing real growth, and potentially permanent unemployment at the marginal skill level.
The U.S. suffers from a failure to invest in the creation and production of assets. It suffers from an ecnomic class that cannot tell an asset from a cheeto. It suffers from a policy confusion that cannot distinguish between the growth difference between investment and consumption in the GDP metric. It suffers from a political class that confuses Private Sub S Corporations that actually pay the highest taxes with Multinational Public C Corp. corporations which buy favors to avoid paying taxes.
If you drive around and look at failed stupid housing projects next to a dump, overimproved by local regulation and hubris, that only an idiot would have financed in the first place, and you refer to vacant shopping centers becasue the former customers don't have jobs, or have moved away, or more convenient centers have been built in better locations, and you conclude that the U.S. does not need growth, then you have been snared in the net of general confusion about what is growth and how is it different from consumption.