The "growth economy" is not sustainable.

[Bonam]

It's apparent that the whole system makes the banks and their investers a lot of money, so is it likely we'll get any new ideas from that sector!

Anyone can invest in a bank. So if it makes so much money for their investors, everyone could just invest and make a lot of money. Of course, that's not the case. On average, investors have not made much money over the last decade, as one can clearly see by taking a look at a chart of the S&P 500 or other market-representative index.

Frankly, your posts simply illustrate that your understanding of the economy is deeply flawed.

[CPCFTW]

Government debt balloons and then there are austerity binges, and those cycles are created to make a lot of money for a few peoplr by siphoning money out of the middle class.

It isn't really a cycle but a spiral ... a death spiral for all but a few uber-rich.

Just put on a tinfoil hat and get it over with.

[Bonam]

Government debt balloons and then there are austerity binges, and those cycles are created to make a lot of money for a few peoplr by siphoning money out of the middle class.

It isn't really a cycle but a spiral ... a death spiral for all but a few uber-rich.

On the contrary, it is generally the rich that lose most (percentage wise) during recessions / crashes because they have by far a greater portion of their wealth allocated in investments such as stocks, bonds, futures, and ETFs. The middle class are relatively insulated from market crashes since their biggest asset tends to be their primary residence, which usually doesn't decline in value nearly as much as the market does (certainly not in Canada). Furthermore, their main income is their salary, which remains relatively constant unless they get layed off, while the rich make much of their income from gains/payouts on investments, which disappear or turn negative during crashes.

Edited September 8, 2011 by Bonam

[jacee]

http://www.economyincrisis.org/content/end-economic-growth

Financial pundits point to profound problems internal to the economy--includ overwhelming, un-repayable levels of pub and private debt, and the bursting of the real estate bubble--as immediate threats t the resumption of economic growth. Their assumption, however, is that eventually once these problems are properly dealt wi growth can and will pick up again. But the pundits fail to see factors external to the financial economy that make a resumptio of conventional economic growth an mpossibility. In other words, this is not a temporary condition, it is permanent.

* The depletion of important resources ncluding fossil fuels and minerals;

* The proliferation of environmental impacts arising from both the extraction and use of resources (including the burning of fossi fuels)--leading to snowballing costs from both these impacts and the efforts to clean them up

* Financial disruptions due to the inability of our existing monetary, banking, and nvestment systems to adjust to both resource scarcity and soaring environmental costs

* The inability of these same systems (in the context of a shrinking economy) to cope with the enormous piles of government and private debt that have been generated over the past couple of decades and that will apparently continue to be generated.

Despite the tendency of financia commentators to focus only on the last two of these four obstacles, it is possible to point to literally thousands of events in recent years that illustrate how all four are nteracting, and are hitting home with ever more force.

Come on guys! Prove them wrong ... please!

[bloodyminded]

You haven't tarnished him at all...better people have tried and failed.

Bob tried!

But yes, failed...for the very reasons Michael Hardner pointed out.

[CPCFTW]

http://www.economyincrisis.org/content/end-economic-growth

Come on guys! Prove them wrong ... please!

Here's a start:

Overall, global growth is projected to ease from 3.8 percent in 2010 to 3.2 percent in 2011, before picking up to 3.6 percent in each of 2012 and 2013. The slowdown for high-income countries (from 2.7 percent in 2010 to 2.2 percent in 2011) mainly reflects very weak growth in Japan due to the after-effects of the earthquake and tsunami (see note on the Impact of the disaster in Japan). Growth in the remaining high-income countries is expected to remain broadly stable at around 2.5 percent through 2013, despite a gradual withdrawal of the substantial fiscal and monetary stimulus introduced following the financial crisis to prevent a more serious downturn.

For developing countries growth is projected to decline from 7.3 to 6.2 percent between 2010 and 2012 before firming somewhat in 2013, reflecting an end to bounce-back factors that served to boost growth in 2010 and the tightening of monetary and fiscal policies as capacity constraints become increasingly binding (see note on the Synopsis of regional outlooks and the regional annexes to this document for more details on recent economic developments and the outlook for low– and middle-income countries — including country specific forecasts).

http://go.worldbank.org/CVKS5Q22G0

You want us to waste our time disproving every crackpot theory you can dig up?

Why don't you prove him right since he doesn't bother doing so himself?

Edited September 8, 2011 by CPCFTW

[jacee]

Here's a start:

http://go.worldbank.org/CVKS5Q22G0

You want us to waste our time disproving every crackpot theory you can dig up?

Why don't you prove him right since he doesn't bother doing so himself?

I don't see a date on that but I'm hearing differently lately:

Canada’s Dollar Falls Amid Lower Global Growth Forecasts; Bond Yields Drop By Chris Fournier September 08, 2011 17:21 EDT Can

http://mobile.bloomberg.com/news/2011-09-08/canada-s-dollar-falls-amid-lower-global-growth-forecasts-bond-yields-drop.html

D OECD slashes growth outlook for developed economies - 4 hours ago The organisation's latest assessment of the global economic outlook said that growth in the G7 economies

http://www.independent.co.uk/news/business/news/oecd-slashes-growth-outlook-for-developed-economies-2351516.html

[jacee]

"Although the US GDP has increased substantially over this period (ie the past two decades), the GPI has charted a 45 percent decline."

http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/BP/prb0022-e.htm#B.%A0Redefining%20Progress%92%20Genuine%20Progress%20Indicator%20(GPI)(txt)

The GPI measures true economic progress with environmental costs included, and makes the quality of growth the focus: Using the GDP is like forecasting your household budget based on gross income and expenditures, without taking into account that the cheap old vehiclesyou bought to minimize expenditures are leaking on your driveway and destroying the pavement that will now have to be replaced.

It seems the financial and business community better get on board with GPI measures that reflect SUSTAINABLE development. It's clear the effects of environmental destruction are now kicking in and rendering invalid the outdated GDP as a measure of success. Environmental costs must now be included in calculations for accurat e economic forecasting. The old equations just aren't good enough anymore.

Edited September 11, 2011 by jacee

[TimG]

The GPI measures true economic progress with environmental costs included, and makes the quality of growth the focus:

IOW - it is a meaningless number because it is constructed from a bunch of subjective assessments - assessments that happen to advance whatever political cause the authors are promoting. GDP numbers are often estimates but they are not subject to the whims and prejudices of the person doing the calculating. Edited September 11, 2011 by TimG

[jacee]

IOW - it is a meaningless number because it is constructed from a bunch of subjective assessments - assessments that happen to advance whatever political cause the authors are promoting. GDP numbers are often estimates but they are not subject to the whims and prejudices of the person doing the calculating.

Nor, apparently very useful.

Better a valid measure with challenges than one easy to calculate that takes you in the wrong direction. If you need bread would you go to the hardware store because it's easier to park there?

If you want valid economic forecasting, don't rely on the GDP anymore.. It doesn't adequately account for costs and thus overestimates status and progress.

It also doesn't account for lousy products that drain resources through constant replacement.

[TimG]

Better a valid measure with challenges than one easy to calculate that takes you in the wrong direction.

It is a better measure than one developed entirely to promote the political agenda of the economist doing the compilation (any measure that relies on subjective measures will essentially a political exercise).

I don't rely on economic forecasting no matter what data is used. It is little better than astrology.

Edited September 12, 2011 by TimG

[Pliny]

Nor, apparently very useful.

Better a valid measure with challenges than one easy to calculate that takes you in the wrong direction. If you need bread would you go to the hardware store because it's easier to park there?

If you want valid economic forecasting, don't rely on the GDP anymore.. It doesn't adequately account for costs and thus overestimates status and progress.

It also doesn't account for lousy products that drain resources through constant replacement.

The GDP is used by government to develop monetary policy. It is a dollar value. A GPI is bascially putting a dollar value on things that don't currently have a dollar value or aren't measured in dollar value. Unpaid housework and child care, the costs of family breakdowns, all that is happening with a "GPI" is putting a dollar value on those things. As Tim says, a lot of that would be entirely subjective. If you are going to measure production with money then you can only measure those activities that involve money. Things like barter might be fairly easy to measure in dollar value but it may not measure real value to the individuals doing the trade.

Basically, a "GPI" becomes a super GDP and more policy can be developed from it. Policies of income redistribution, monetary pumping, restriction or redirection of development, etc. The GDP is rather limited to measuring money transactions and from that interest rates, tax levels, tariffs, the money supply are regulated. A GPI offers even more areas of regulation and it is all assigned a dollar value as though the almighty dollar is the true measure of wealth and production. I'm $200 happy today as opposed to $300 happy yesterday - calculating in my leisure time which is way more valuable than my work time.

[CPCFTW]

http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/BP/prb0022-e.htm#B.%A0Redefining%20Progress%92%20Genuine%20Progress%20Indicator%20(GPI)(txt)

The GPI measures true economic progress with environmental costs included, and makes the quality of growth the focus: Using the GDP is like forecasting your household budget based on gross income and expenditures, without taking into account that the cheap old vehiclesyou bought to minimize expenditures are leaking on your driveway and destroying the pavement that will now have to be replaced.

It seems the financial and business community better get on board with GPI measures that reflect SUSTAINABLE development. It's clear the effects of environmental destruction are now kicking in and rendering invalid the outdated GDP as a measure of success. Environmental costs must now be included in calculations for accurat e economic forecasting. The old equations just aren't good enough anymore.

My favourite:

Cost of Family Breakdown:

Divorce costs (lawyers plus effect on children) plus imputed cost of TV watching

Hahahaha do you people actually buy into this stuff?

[jacee]

The GDP is used by government to develop monetary policy. It is a dollar value. A GPI is bascially putting a dollar value on things that don't currently have a dollar value or aren't measured in dollar value. Unpaid housework and child care, the costs of family breakdowns, all that is happening with a "GPI" is putting a dollar value on those things. As Tim says, a lot of that would be entirely subjective. If you are going to measure production with money then you can only measure those activities that involve money. Things like barter might be fairly easy to measure in dollar value but it may not measure real value to the individuals doing the trade.

Basically, a "GPI" becomes a super GDP and more policy can be developed from it. Policies of income redistribution, monetary pumping, restriction or redirection of development, etc. The GDP is rather limited to measuring money transactions and from that interest rates, tax levels, tariffs, the money supply are regulated. A GPI offers even more areas of regulation and it is all assigned a dollar value as though the almighty dollar is the true measure of wealth and production. I'm $200 happy today as opposed to $300 happy yesterday - calculating in my leisure time which is way more valuable than my work time.

Setting aside for the moment the social costs, it appears to me that the environmental costs of industries have to be addressed to provide valid evidence of economic health. The BP spill in the gulf cost the American government $220b in public money, a substantial amount out of the taxpayers pockets unplanned. If we can use past data on cleanup costs for unexpected events and for site restoration, again largely born by taxpayers, we can have a better idea of the actual benefit of industries ... in dollars.

Economists should be climbing on board to add more costs into their mix, as obviously better predictors are needed if their forecasts are going to be of any use whatsoever.

No one is suggesting we adopt someone else's GPI measures, but that we develop one that works for us, perhaps even different elements for different areas of the country (see GPI Atlantic, for example).

I could live without the social cost element, but I do believe environmental costs are now having a substantial impact on the public budget and should be accounted for. If industries are going to deplete resources and render the surrounding environment uninhabitab le , there is a cost to that for the taxpayers. Should those costs not be part of the calculation of profits? If companies are going to declare bankruptcies and re-form as different entities while moving on to the next site, should those public costs not be entered into any calculation that attempts to provide an estimate of national economic health?

The GDP is an estimate of profits going to shareholders via increased 'product' but it is not a good estimate of the economic health of a country as it does not address the costs of industry that are born by the public and are draining public budgets.

"Although the US GDP has increased substantially over this period (ie the past two decades), the GPI has charted a 45 percent decline."

Might explain the crashing economic forecasts, don't you think?

And btw, why can an oil company post profits that consist entirely of corporate subsidy from taxpayers' pockets? Why can industries go bankrupt to avoid environmental remediation?

Because we let them.

We simply cannot afford these costs anymore and we need to use more accurate measures that provide REAL cost estimates.

[TimG]

Might explain the crashing economic forecasts, don't you think?

The GPI is a fabricated statistic constructed by looking at the data after the fact. It explains nothing.

And btw, why can an oil company post profits that consist entirely of corporate subsidy from taxpayers' pockets? Why can industries go bankrupt to avoid environmental remediation?

Complete nonsense. Oil company subsidies should be eliminated but they work out to be about $5 billion/year in the US in an industry where Exxon alone made $50 billion. Edited September 12, 2011 by TimG

[jacee]

The GPI is a fabricated statistic constructed by looking at the data after the fact. It explains nothing.

Complete nonsense. Oil company subsidies should be eliminated but they work out to be about $5 billion/year in the US in an industry where Exxon alone made $50 billion.

No it isn't nonsense. Look up the subsidies, and compare them to company statements. An oil sands company got $250m in subsidy and posted $250m in profits for the same year, their first year of operation.

Thank you for acknowledging that subsidies to the oil companies should be eliminated. You must be some kind of lefty radical!

BTW ... did the US taxpayers get their $5b back or did it too go into shareholders' pockets? $5b could pay for health care and nutritious food for a LOT of children, Millions.

Do you know that poor nutrition (and low income people can seldom afford good nutrition) is the primary cause of learning problems in children? It destroys them early and they never acquire the skills to hold down a job.

Re GDP/GPI: I guess I wasn't clear but I was suggesting that use of the less-than-valid GDP in doing economic forecasting is resulting in invalid forecasting. As we've seen in the past few days., economic forecasts are crashing globally. Use of a GPI would improve the quality of forecasts as it accounts for the REAL costs of industry born by taxpayers.

Edited September 12, 2011 by jacee

[TimG]

An oil sands company got $250m in subsidy and posted $250m in profits for the same year, their first year of operation.

I don't believe you. You will have to provide a specific example with numbers and categories.

did the US taxpayers get their $5b back or did it too go into shareholders' pockets? $5b could pay for health care and nutritious food for a LOT of children, Millions.

The subsidies largely go to keep the cost of fueling SUVs as cheap as possible.

[jacee]

I don't believe you. You will have to provide a specific example with numbers and categories.

The subsidies largely go to keep the cost of fueling SUVs as cheap as possible.

I'd like to search it out again too, but time doesn' allow for it today.

Maybe the SUV and hummer drivers should be paying a premium for their gas, not getting a break.

Food for thought:

The 13-year bill for corporate welfare is equivalent to about 40 per cent of our $500-billion federal debt. Regrettably, both corporate welfare and public debt look set to spike in the years ahead. It’s not a coincidence. Much of the latter is caused by the former.

http://mobi.fcpp.org/publication.php/3067

.

Edited September 13, 2011 by jacee