Welcome to PatsFans.com

Why GDP Really Can't Grow

Discussion in 'Political Discussion' started by PatriotsReign, Dec 13, 2012.

  1. PatriotsReign

    PatriotsReign Rookie

    Joined:
    Jan 15, 2007
    Messages:
    25,768
    Likes Received:
    80
    Ratings:
    +176 / 1 / -10

    The only way our GDP can grow is for the average American to constantly spend more money year after year. Or more specifically, Americans as a group must spend more year after year.

    Which means more and more people have to be working and also increase their wages....year after year. And the final step required for GDP to grow is that wages have to grow more than the cost of living...and that includes taxes.

    Anyone see that happening anytime soon?

    Now the kicker here for all you anti-corporate people (me among you) is that if all of the above doesn't happen, corporations can't grow profits to meet Wall Street's expectations. Until now, corporations have cut costs by cutting labor, so profits haven't been that bad.

    But the next few years don't look so hot for corporate America.

    One of the biggest demographic factors moving forward is the fact that college graduates are taking on so much debt, they won't be able to afford buying homes or having children for years after they graduate. A $150K college loan has to be paid back in 10 years! You don't get to pay it back like a mortgage, so the payments on that loan typically are equal to an average mortgage payment. Unlike mortgages, college loan payments do not add to our GDP.

    This is where we are and what our future looks like....

    Unless some of our members have some ideas on any of the above. If so, fire away.
    Last edited: Dec 13, 2012
  2. Hamar

    Hamar Rookie

    Joined:
    Nov 23, 2011
    Messages:
    2,192
    Likes Received:
    19
    Ratings:
    +39 / 0 / -1

    Something tells me you are about to get an earful about peak oil ;)
  3. Tunescribe

    Tunescribe PatsFans.com Supporter PatsFans.com Supporter

    Joined:
    Oct 21, 2004
    Messages:
    16,214
    Likes Received:
    209
    Ratings:
    +445 / 5 / -9

    #61 Jersey

    Remember my thread about society collapsing by 2052? Shortly before then the federal government will reach the point where it won't be able to collect enough money to make interest payments on its debt. Looks like interesting times ahead, to say the least.
  4. TyronePoole

    TyronePoole Banned

    Joined:
    Jan 21, 2012
    Messages:
    1,335
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    anyone who wants to read about this in depth should give this a look, it's an excellent paper:

    http://www.monitor.com/Portals/0/Mo..._Growth_in_Low_Growth_Economy_Kelly_Weber.pdf

    Basically the paper talks about how the growth we've come to expect has been on the back of several industrial booms and the initial stages of globalization and is unrealistic going forward. But it's not doomsdayism either.
    Last edited: Dec 14, 2012
  5. PatriotsReign

    PatriotsReign Rookie

    Joined:
    Jan 15, 2007
    Messages:
    25,768
    Likes Received:
    80
    Ratings:
    +176 / 1 / -10

    And as much as I tire of it, I see peak oil as the #1 contributor to declining growth. Add in all that I wrote in the OP and it's pretty depressing. Especially for younger Americans.

    But peak oil does not invalidate nor has it caused all the other contributing factors. The truth is, any of the recent economic "booms" have been created by our gov't and corporations.

    I just wish our gov't would just admit all of this now. Instead of artificially propping up the stock market to create more illusions.
  6. Hebeill

    Hebeill Rookie

    Joined:
    Jan 11, 2010
    Messages:
    1,568
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    I think it might be fairly simple if everyone went along. First busines's increase they're wages, so the average person can spend more. The same business increase the cost of what ever they a selling to offcet the higher wages paid out. Now its like it is now, the consumer chooses what they want to spend they money on. And they can afford to pay higher taxes
  7. Nunchucks

    Nunchucks Rookie

    Joined:
    Sep 10, 2007
    Messages:
    3,039
    Likes Received:
    75
    Ratings:
    +150 / 7 / -7

    So, if the top 1% did not suck in such a large portion of this country's wealth, GDP would grow?
  8. IllegalContact

    IllegalContact On the Roster

    Joined:
    Jun 5, 2010
    Messages:
    10,815
    Likes Received:
    134
    Ratings:
    +268 / 4 / -9

    businesses don't increase wages unless there is an increase in revenue and backlog. simple economics dictates that the notion of businesses raising wages as a starting point is fallacy. so they just keep raising wages to keep fueling the growth? who cares if they're losing money?

    so you increase costs to pay higher wages so that the person can go out and spend more.........LOL.....the perfect inflationary whirlpool

    the cold hard fact #1 is that debt needs to be repaid since the $$ spent on paying interest is $$ that is automatically removed from any possible growth.

    the cold hard fact #2 is that the population has collectively gotten far too lazy and feels way too entitled. It makes it easier for families with kids like mine who have been groomed to work hard and do their very best......things will come easy to them
  9. Triumph

    Triumph Rookie

    Joined:
    Sep 15, 2004
    Messages:
    6,165
    Likes Received:
    61
    Ratings:
    +102 / 22 / -12

    #32 Jersey

    Thats all Obama and the Fed can do or the whole US economy will come crashing down like the Hindenburg

    Raising taxes isnt going to help because Obama will spend that money like he has a hole in his pocket.
    Last edited: Dec 14, 2012
  10. IllegalContact

    IllegalContact On the Roster

    Joined:
    Jun 5, 2010
    Messages:
    10,815
    Likes Received:
    134
    Ratings:
    +268 / 4 / -9

    actually, the stock market is safevgiven that so many companies have so much cash......companies are in a huge R&D cycle since NRE is not a long term commitment...you're doing great if you have an advanced degree

    all of our business used to be production related......now its all for the labs with all the phd's hovering around a microscope. the volumes are lower, but the margins are nice
    Last edited: Dec 14, 2012

Share This Page

unset ($sidebar_block_show); ?>