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Poll, GDP growth 2010-29 - "the hat trick"

Discussion in 'Political Discussion' started by PatsFanInVa, Dec 26, 2011.

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By what factor will the GDP grow from 2010-2029?

  1. 2.5-3 times

    0 vote(s)
    0.0%
  2. more than double, less than 2.5 times

    1 vote(s)
    16.7%
  3. Less than double, greater than 1.5 times

    2 vote(s)
    33.3%
  4. low growth (less than 1.5 times, but greater than 1)

    2 vote(s)
    33.3%
  5. Zero or negative growth for the 30-year period

    1 vote(s)
    16.7%
  1. PatsFanInVa

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    I've deleted this twice because I've screwed it up twice in the poll itself. I am hoping I can get this right. Below is the background once more:

    Looking at GDP data from 1950-2010, expressed in constant dollars, and looking back in 30 year chunks, you get a multiplier effect of various sizes. From 1950-1979, the economy grew by a factor of 2.9. From 1981 to 2010, the economy grew by a factor of 2.2 (the lowest multiplier.)

    This means that the GDP in 2010 is worth 2.2 times what it was worth in 1981, in constant dollars. I plotted 1980-2009, 1979-2008, and so on all the way back to 1979, the first year it's possible to do this with the available data.

    There is a general downward trend in these 30 year chunks, though the multiplier declined really steeply from about 2004-2010. 2009 and 2010 yield almost identical multipliers, the lowest in the range. The highest was the 1950-1979 result of about 2.9. A multiplier of 2.5 is about average.

    The question is: what is the multiplier will we grow by between 2010 and 2029?
  2. PatsFanInVa

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  3. PatriotsReign

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  4. PatsFanInVa

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    But you have no guess as to the answer to the poll?
  5. PatriotsReign

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    As I stated in my original post, it is nearly impossible to predict US GDP growth moving forward because no one knows what the long-term affects of this recession/depression will be.

    If you read my original post, I believe we'll be fortunate if GDP grows 50% (.5 times) by 2029.

    But no one can confidently answer your question. The best the most respected economists can do is a "stab-in-the-dark".
  6. PatsFanInVa

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    Interesting - but I'd say you have to project in order to have an opinion on public policy. For example, the lower our growth assumption, the more insurmountable debt appears to be (I don't want to link this too closely to the thread next door, only because here I'm feeling a little more wool-gathery, a little more reasoned, a little less combative, I suppose.)

    But think about it. If our current real economy is stagnant, only our obligations mount, and there is no way to make it over the hump on a range of issues.

    If over 30 years we nearly triple our economy, as happened between 1950 and 1979, all sorts of things are possible.

    If "nobody can predict" or even guess, well then, we have no way to have our many discussions about the economy. We definitely need to at least guess "how to grow," and we need to at least have access to the historical pattern. The data I looked at is in 30 year chunks, which smooths most impacts.

    In that the most recent smoothing incorporates the drop off the cliff in 07-09, I think the 2.2 multiplier over the next 30 years is in fact a very low figure.

    From your guess, it sounds as if you expect at least a couple more collapses like the 07-09 recession between now and when we measure 30 years from now (with the completed 2029 data). By historical standards, it will feel like one long depression with periods of adequacy, in your model (<50% growth over the next 30 years.) Again, that multiplier has been >double for every period we have data for.

    I'm not saying you're wrong, I'm just saying that's where you are (with the caveat that "nobody can guess.")
    Last edited: Dec 27, 2011
  7. PatriotsReign

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    2029 is only 17 years from now...

    Regardless of whether we experience more recessions between now and '29, we do know we'll be fairly stagnant for another 5 years or so.

    But you also have to factor in the fact we have a mature economy while many nations are emerging growth nations. The faster these countries grow, the more it affect our GDP. So we'd need to mathematically factor in what affect EG nations have upon our economy.



    Using your rationale of the incredible growth our economy has had since the early 1950's, it's easy to see that there is no way we should have had any debt in 2000! Revenues should have grown faster than population growth...so why did we end up with so much debt?

    You want to "invest" now...but why weren't we in a "save" mode prior to 2000? If one believes this country should invest during recessions, then it's logical that we should NOT have been "investing" during booms.

    You can't have it both ways.
    Last edited: Dec 27, 2011
  8. patsfan13

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    The decline in avg GDP is a function of demographics + government policy. So it will depend on how bad our demographic situation get and whether or not we continue to expand government spending/regulation as a % of GDP. By government spending I mean all spending Federal, State and local government.
  9. wistahpatsfan

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    #75 Jersey

    Growth is a tricky subject as we're damned if we do and we're damned if we don't. At least that's what I get from the premise of our need to eliminate the deficit by encouraging "growth".

    I don't think that's necessarily necessary (yes, that's proper grammar...I checked) as I'm a firm believer in the limits of growth. As GDP goes, I assume we include non-productive "products" like financial advisors, transaction fees, and consulting. I suppose video game production and devices in cars that make them park themselves are important to the equation as well (I know that I really NEED to have a lighter with a Pats logo). Is that really "growth"?

    Lost in the discussion of increasing growth for the sake of deficit reduction is the impact on the environment and biotic systems, the reduction of our overall health, inreased isolation of people, (except in the third-world manufacturing cities) and the constant distraction that this equation represents. The equation implies that we must continue to increase our population indefinitely. In order to support that open-ended population (and, more importantly, keep them sedate) we must continue to make crap and throw that crap out. The best way to do that is to make the crap fail soon enough. Durability is no longer the goal and quality of life becomes secondary. Both parents must work because everyone must go to college (another GDP component, I assume) and those who do better keep going if they want a job paying in the 6 figures so they can get the really good stuff...

    Meanwhile, we need to make more gadgets that supposedly saves us time so we can work more, live further apart from each other, and buy those devices and vehicles so we can keep increasing the population and defending our stuff from those who don't have it but are told they need it. Our consumer-driven economy will meet a limit. It has to. The planet is not getting larger and we will soon be forced to find another place to live, but that won't be possible, because America doesn't trust science so schools and NASA are unfunded. We can't be on this path indefinitely and anyone who thinks so is a fool. This discussion, while important to some (and I mean no offense to them), is nothing more than whistling past the graveyard.

    Rant over.
    Last edited: Dec 27, 2011
  10. PatriotsReign

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    Bingo wistah!!
  11. PatsFanInVa

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    LMAO LMAO LMAO I take back all snottiness in every post from the last 24 hours.

    I was trying and trying and trying to get the goddam "poll" to work and KEPT screwing up the basics. So you are right. I wanted a rolling 30 year window, and used a rolling 20 year window based on '10-'29 (it looks like 19 years, but since '10 is a year, '19 is the 10th year, and '29 is the 20th.)

    "Now" has to be defined as the most recent complete data set. We don't have the final GDP data on '11 - the year's not over yet, and then there's a lag until the numbers are final.

    Of course that doesn't address my 10-year error.

    Once again LOL LMAO LOL LMAO at me. Let's re-boot and discuss based on '39, screw the poll. I've just asked everybody to compare apples to oranges by not making it '10-'39.

    I think 3-4. I think that's our volume of overbuilt housing inventory, and that drives construction, just one of the big drivers coming out of the 07-08 debacle.

    Depends where they are in their emergence. China's not just a threat, it's a market too. You've got another America on the coast, and a feudal country in the interior. Their middle class (and wealth class) is growing by leaps and bounds. People like to say they have their own crash coming, but they're the other face of our problem -- they produce produce produce and don't consume. The pressure will come from their manipulation in the reverse direction of what we do -- they like the yuan to be weak, which keeps consumption in China limited to Chinese goods to the extent possible.

    It's fun to be the one big consumer, until you realize what that implies. So as Chinese money gets closer to other currencies -- and it will -- their markets will be more and more able to consume U.S. goods. I know they like Buicks. There must be other things.

    A couple of things.

    1) "My" rationale is not that our growth from 1950-1979 will be repeated.
    2) More to the point, if growth from 1950-1979 was very robust by comparison, that does not mean that debt 20 years later should be nonexistent.
    3) And conspicuous by the time window you chose above, you don't address the majority of our debt, which was incurred between 2000 and 2010 (as it pertains to our data set.)

    The contributors to our present debt are pretty clear, and not really even fodder for argument. Our debt was not an immense problem in 2000 (look up 2000 debt as a % of GDP), and we had just run a surplus budget. But the sources of our current debt are well known. We continually cut our revenue; we spent foolishly on the military and foreign intervention; and we needed to engage in spending in response to an economic downturn of historic proportions.

    Another point on which you're absolutely right; using Keynesian mechanisms, whether unrealistically low tax rates or stimulus, might be appropriate to an environment of recovery. It is not appropriate to boom times.

    We should have been using realistic tax rates and limiting our foreign adventurism prior to 2000; Clinton in fact pursued both these policies (as compared with what came after,) and ended up with a surplus budget. I know you guys like tweak here and there and say "if you count" blah blah blah, and come up with a slight deficit. Okay fine. But you're still dealing with orders of magnitude closer to "even" than we've been at since.

    But I've said here before I'm not just randomly profligate in terms of economic policy. I agree with you that in a boom time you have to accept that you don't add rocket fuel to an already really good economy. You don't stimulate a hyperactive kid. You don't say that a patient with a 107 degree fever has a "strong" temperature, like you say that a great foreign exchange rate is a "strong" dollar.

    Truth is you just need stuff to be in proportion -- revenue, spending, trade, blah blah blah.

    No desire to.

    I just fuggin WISH that after 3 tries, I could get the text of the goddam poll right.

    Thanks for the catch, can't really make much of the data because the poll's badly done. but we can discuss the underlying ideas. Goddammit again.

    PFnV
  12. PatsFanInVa

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    Wistah, I can't say I disagree with you.

    But give me an idea of what replaces Capitalism, or how Capitalism functions in a zero-growth or negative-growth (economic) environment.

    Surprised to hear "bingo" from PR on this one LOL... but hey, I can't even remember the difference b/w 20 and 30 years on this thread.

    What does a sustainable economy look like, if you consider economic growth to be unsustainable as a model?

    PFnV
  13. wistahpatsfan

    wistahpatsfan Rookie

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    #75 Jersey

    I dunno, man. They got it figured out on Star Trek.

    I'm not ruling out anything. Harnessing fusion power? The solution might be in computerized organization of the global economy which is already underway. Communication between people on a global network might enable us to respond to each other in a way that might spark some economic revolution and the rejection of unsustainable ideas like uncontrolled population and the lop-sided use of natural resources. National identities could more closely resemble US state identities. Military solutions must surely become less acceptable on a large (and even small) scale. Hopefully, I doesn't come down to a "Oh crap! We're too late" moment. This is the stuff for science fiction and speculation, which I can do, but doesn't mean a lot.

    Sorry for that passive response, but it's all I got. When I think about the future, I'm either unrealistically optimistic or somewhat pessimistic, like the guy with his foot caught in the train track switch as the train is bearing down on him. He's thinking, "I've got to get my foot loose! I know! I'll just keep pulling at my leg and hope that train stops just short!"
  14. PatriotsReign

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    As you've stated several times here...we really don't have a pure capitalist economy. It's a hybrid-form of capitalism.

    Just as an FYI...we know you like to attempt to tackle huge mega subjects like...

    "What do you think our economy will do over the next 30 years?" or "If growth is over (see Titus Pullo), what's next?"

    But for most of us here, that's just asking for a headache. Even the majority of professional economists only deal in 5 year forecasts, max. I know you enjoy creative, mathmetical theories and then like to discuss them out step-by-step in a logic-based process. But most of us have little interest in joining such a discussion. That doesn't mean either you or anyone else is wrong...it's just a matter of "to each, their own".

    I do the above every single day for a living (on more focused issues), so I don't have the energy to bring my work here.
  15. wistahpatsfan

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    #75 Jersey

    Speak for yourself.

    You may be right that "most people" don't care about the Big Picture, and therein lies the problem. It's what provides power for those who would maintain the status quo at least for as long as they are alive. Beyond that, they could give a sh!t.

    Caring about the future is not a vise or luxury.
  16. PatsFanInVa

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    LOL I'm effectively sidelined by "The Great Dictator" now, damn that Icy. Agree with Wistah though - dare to think about it, and you get past the equivalent of that election-cycle thinking we all decry. A 10-year window is fairly often attempted, but yes, we're talking macro at this point.

    Anyway, back to this thread after the Chaplin. It's worth considering, especially given Wistah's challenge to growth, and you've actually made note of the mixed nature of our economy.

    If there's no mixed economy, we don't have the question -- we just watch passively and cry when bad things happen. For that matter, we may not be here to ask the question today, but that's woulda shoulda coulda.

    Anyway like Wistah says -- lots of us do care to get the headache, in fact we think it's fun to get the headache, not to mention illuminating

    Okay back after Chaplin
  17. IcyPatriot

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    #87 Jersey

    I'm trying to respond here but there are way to many variables. So I am going to answer by listing the variables as I see them.

    1: What will the demand for goods be with smaller growth in population?

    2: Will a future open border with Mexico lead to more demand for goods?

    3: Will China continue to create trade barriers as their costs of manufacturing rises?
    This is already happening btw in the auto sector ... more sectors to come.

    4: How will China's own financial issues affect ours - who will buy our debt?

    We need our economy to grow to create a larger tax base. A larger economy will reduce the national debt. Without a larger economy Congress will have to further increase taxes and cut programs which will cause instability in our country. We could experience our own style of civil war (an economic civil war) which actually has already begun also.

    So many variables PFNVA ... we will need a President who's strongest suit is the economy. Right now anyone other than Romney or Obama could spell larger problems until 2016 election comes around.
  18. Real World

    Real World Moderator Staff Member

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    This is an impossible question to answer, especially with a national election a mere 10 or so months away. There's the uncertainty of our political direction, the questions surrounding europe, and it's euro currency, the current political turmoil in the ME, and a ptentially problematic economic situation in china. I'm with PR and Wistah.
  19. PatsFanInVa

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    LOL well no wonder our political direction (on a 10-month timeline) is uncertain... we declare it impossible to think about where we're going.

    How the hell are we to talk about which path to take there?

    To me this is very interesting... I think it has a lot to do w/some of the big questions finding their voice on both the populist right and the populist left.

    Here's what I think: 5 years ago I think we'd all fairly confidently say we know the rough outlines. I don't think we have the faith in capitalism we had 5 years ago. I don't know whether this is good, bad, or "just a thing."
  20. PatriotsReign

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    I do not want what I am about to write to come across as braggadocio in any manner, so here goes.

    5 years ago, I knew the path we were on would/could not continue. Especially in the area of real estate, but also with the hyper-run-up in the stock market. For anyone who works closely with economic indicators, bells & whistles should have been going off everywhere.

    But some economists are employed by organizations that were fueling the inferno and their vision became blurred. In about 2003, I emailed one of my brothers with a forecast/prediction that we'd soon be in a deep recession. He and I had been debating whether or not real estate values were sustainable. One basic I always stand by is that RE values must reflect real wages of any given area.

    So here we are wondering what the next 30 years will bring in a world where population growth has always been exponential and resources, finite.

    In my opinion, it's a good thing we're in a recession/depression! At least we're slowing the consumption of these resources and thinking about implications.

    Speaking of implications...we all know in hindsight that artificially inflating our economy isn't a good thing. So my greatest hope is that we've learned from our mistakes (and inflating real estate was one of the greatest blunders in American history) and won't repeat them.

    It's just my opinion, but we'd be better off discussing how to avoid repeating history and see if we come up with a plan to get out of our current mess. To date, I have not read a single, solid idea from anyone in gov't on how we're going to get out this. Right now, I would support a massive plan to rebuild our infrastructure, top-to-bottom. Not only that, but I'd like this plan to include a vision of how we're going to maintain a solid infrastructure.

    Roads
    Bridges
    Tunnels
    Dams
    Rail
    Freshwater supplies
    Waste disposal (including sewage)
    Sustainability of natural fishing (I hate "farm raised")

    The above would keep America busy for the next 2 decades at least. Heck, it took almost 20 years just to complete the Big Dig in Boston.
    Last edited: Dec 27, 2011

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