Monday, May 03, 2010

The Tale of Misbegotten Woe

We are observing the Recovery which never was, though that Statement ignores the total, real Labor enrollment. We are not doing badly; it is just that We are not growing. It is a factor which will not matter within a decade, as Retirees shift out of the labor rolls. Nothing, though, seems to gel within the current matrix. Inputs introduced in one area appear to detract from other sectors. The Government pulls more Cash from the economy than it can possibly inject as Stimulus, and the Private Sector is not investing in Capital construction in the face of soft Consumer Demand. Everyone knows that the Inflation is in the economy, but everyone knows it will turn into a inflationary spiral past the first Price changes, and a soft Consumer Demand will turn nonexistent. The Horse cannot be rode, and everyone gathers anxiety waiting for the Chute to open.

Here is an article which would contest the previous assessment, but looks similar to PR claiming a good deal to be had. Gross numbers likely are utilized, with no scaling for Inflation, capital utilization rates, or average Work hours. The criteria from which the assessment was performed creates its own wide variance. Productivity Gains with a lower labor complement means actual labor loss, with a more rapid capital burn without reinvestment. I believe We are still burning off fat, and the animal is getting very lean. This estimate is extremely viable, and We could soon be scorching vital muscle. I do know that Government Spending is going to get no one anywhere, until Tax rates are raised; Stimulus is not Stimulus when it is borrowed Money anymore.

Paul Krugman would suggest that the Debt is coming from the Slump, though I think this is a mite simplistic. Government Expenditures have been increasing year over year forever; at least since the mid-Sixties. Every Conservative economist awaits a turnaround of the data, which never comes; they being as bad as the Liberals, thinking that Tax Cuts should come before Debt reduction. The Liberals, of course, want an expansion of the Spending. The only groups making actual Profits are the Corporations, and they are definitely not sharing the Wealth. It is going to get a lot worse before it gets better; then the Reader might be surprised, in that it will probably get better very rapidly after 2020. The reason being I predict a Population decline starting in 2018. Sound Mad? Probably, but a number of reasons are propelling this estimate: Baby Boomers start getting caught by the actuarial tables; Drugs are pricing themselves out of the life-saving mode; and Pollution will start to actually affect everyone.

No comments: