Your ideas/thoughts on what should to be done to return to healthy economy grow.

[sengsational]

I'm surprised there was very little mention of "the next big thing". When the Internet got rolling, the US has budget surpluses.

What if there were a breakthrough in energy storage? Say we had something that had an energy density of 100 times our current batteries. It goes way beyond having enough juice in your phone or other electronic gizmos that they no longer even come with a charging cord (battery for the life of the product). Personal quadcopters anyone? The proverbial yet evasive "flying car"! So many things would change because so many things wouldn't make sense anymore. And even more things that we can't imagine would suddenly become possible. I'm not saying that an energy density breakthrough is what's most likely to happen, but I think something will come along...innovation is lumpy.

 

[Midpack]

Like shooting fish in a barrel. For starters:
1) Eliminate the ethanol mandate
2) Eliminate sugar price supports
3) Reform the Davis-Beacon act ("prevailing wage legislation")
4) Reform licensing: A huge amount of the existing licensing and certification requirements serve as nothing more than guild protection rackets.

Anybody that sets out to defend existing government regulations as lean and unwasteful will be assured of a lifetime hobby.

Fair enough. And my bad for not adding a disclaimer regarding things that are de minimis in nature.

Cost estimates for the ethanol mandate is something like $10B, sugar price supports another $2B or $3B, Davis-Beacon repeal saves less than $2B in an $18 trillion dollar economy. We're talking about initiatives that save about 5 basis points of annual GDP on the high end and quickly drop to around 0.01% of GDP as we move down the list.

That's not to say these things aren't worth doing. They're just not the big ticket items supporters claim. And certainly not a meaningful answer to the title question - which I assumed was the whole point.

+1.

I've wasted my time trying to have a meaningful government deficit/debt discussion online (not allowed here - as it inevitably leads to partisan politics) too many times.

You hear one indignant citizen/candidate after another go on and on about cutting government waste but they offer no specifics. When pressed for specific programs to cut, 99% give relatively trivial examples. When you ask them about the 86% of spending from Social Security, Medicare/Medicaid, Defense, Interest on the debt, and VA benefits - few want to discuss any reductions there.

While I don't disagree with the 4 examples above, they're trivial even together. The deficit is too large to fix by addressing all the small programs that are only parts of the small slices below...

If you want to get indignant about government spending and deficits/debt, how about giving meaningful examples in the range of magnitude of the $ problem. Otherwise, a little humility might be in order...

Same with tax revenues. Look at the details before spouting off, 'tax the 1% more' - fine, but you might be surprised at how far short of closing the deficit that'll get you even if you tax them 100%. And 'tax corporations more' - though some find ways to defer taxes, most US corporations already pay higher net rates than in other countries. And if you do increase corporate taxes, you ultimately pay higher prices for goods & services, so you're effectively raising your own taxes. And reduce their ability to compete globally.

 

[target2019]

Before this thread closes, I'd just like to say, "please stay away from my pieces of the pie." Thank you for your support.

 

[samclem]

You hear one indignant citizen/candidate after another go on and on about cutting government waste but they offer no specifics. When pressed for specific programs to cut, they give relatively trivial examples. When you ask them about Social Security, Medicare/Medicaid, Defense, Interest on the debt, VA benefits - few want to discuss any reductions there.

I've got plenty of ideas, and they would all blow up this thread. A bit disingenuous (not of you, but in general) to call for suggestions, then say the suggestions aren't meaningful (though admitting they meet the original criteria in every respect) while the true beefy items are universally recognized to be outside the allowable scope of our discussions here.

The deficit is too large to fix by addressing all the small programs that are only parts of the small slices below.

Anyway, I thought the overall stated task was to provide ideas to improve the US economy, with a later stated subtask to identify laws that have a higher cost than their benefit (realizing that both "cost" and "benefit" will be slippery to quantify). I guess we can discuss the deficit, too, but I didn't see we were headed in that direction.

 

[Midpack]

I've got plenty of ideas, and they would all blow up this thread. A bit disingenuous (not of you, but in general) to call for suggestions, then say the suggestions aren't meaningful (though admitting they meet the original criteria in every respect) while the true beefy items are universally recognized to be outside the allowable scope of our discussions here.

Anyway, I thought the overall stated task was to provide ideas to improve the US economy, with a later stated subtask to identify laws that have a higher cost than their benefit (realizing that both "cost" and "benefit" will be slippery to quantify). I guess we can discuss the deficit, too, but I didn't see we were headed in that direction.

The OP and others brought debt/deficits into it within the first few posts.

 

[Gone4Good]

We'll know that we're headed in the right direction when there's a vast increase in the demand for engineers and a reduction in the demand for lawyers.

A steep slide in law school enrollment accelerates

The exploding demand for computer science education

All fixed.

To your broader point, if the trouble with the U.S. economy were externally imposed constraints on flexibility, innovation, etc. (i.e. supply side restrictions) then one unavoidable symptom would be rising inflation. And the harder the Fed pushed to raise output against those constraints, the more inflation we'd have.

We don't have an inflation problem. So we don't likely have a supply side economic problem.

 

[Gone4Good]

A bit disingenuous (not of you, but in general) to call for suggestions, then say the suggestions aren't meaningful (though admitting they meet the original criteria in every respect)

Sorry. Didn't realize that a request for suggestions needed to explicitly state that they be meaningful.

 

[photoguy]

The exploding demand for computer science education

All fixed.

The joke I've heard regarding the demand for CS (and STEM) workers is that there's only a shortage at the salary they (corporations) want to pay.

I think there's a lot of truth to that.

 

[VFK57]

CaliforniaMan Long term there is only one way for a nation to come out on top of the others with all the changes caused by automation and globalization. And that is to have the best educated and most creative population. In the long run, there is simply no other solution. Whatever tactics we choose to employ, long therm we have to end up with the worlds most educated and most innovative workforce.
Agree. To have a superior education is foundation of future innovation.
I live in a neighborhood where Indian and Chinese immigrants are majority. What is interesting that housing prices went up drastically because schools became #1 in the city. Chinese and Indians raise their kids without any spoiling, disciplined and with high level of drive to succeed. Good education is not only money spending increases, although it is in many cases necessary, but the way kids are raised.

 

[samclem]

Sorry. Didn't realize that a request for suggestions needed to explicitly state that they be meaningful.

A snark-free observation: If we look at the symptoms (the "for starters" suggestions: the ethanol mandate, sugar price supports, the Davis-Beacon act, overly restrictive licensing) maybe we can identify and fix the aspects of our system that cause them. That's worth doing, because more significant problems (defense spending allocation, corporate "cronyism", etc) spring from the same sources.
An aside--if there's agreement that these minor, "meaningless" things are harmful, why haven't they been fixed? Would this maybe be a sign that fixing the "worth fixing" stuff will be harder yet? Best to get at the root causes with an easy case first.

 

[rodi]

CaliforniaMan Long term there is only one way for a nation to come out on top of the others with all the changes caused by automation and globalization. And that is to have the best educated and most creative population. In the long run, there is simply no other solution. Whatever tactics we choose to employ, long therm we have to end up with the worlds most educated and most innovative workforce.
Agree. To have a superior education is foundation of future innovation.
I live in a neighborhood where Indian and Chinese immigrants are majority. What is interesting that housing prices went up drastically because schools became #1 in the city. Chinese and Indians raise their kids without any spoiling, disciplined and with high level of drive to succeed. Good education is not only money spending increases, although it is in many cases necessary, but the way kids are raised.

VFK57 - there is a quote feature that makes it easy to block out text from another post - and it labels who said it, and links to it. (See my quote of you above... which unfortunately has you quoting CaliforniaMan inline.)

To use the quote function on a browser - look for the "Quote" button at the bottom of every post. On the android app you can select a post by tapping it - and quote is an option that pops up.

It makes the thread more readable for everyone.

 

[samclem]

(Emphasis added)

There's just not as much meat there as people hope / pretend. And focusing on these things that nobody seems to be able to do distracts attention and effort from the things we can.

Such as?

Sorry, repealing Sarbox fails the "clearly generates more savings than costs" standard.

Hmm, so I guess repealing Sarbox is out. But what is "in?"

That's not to say these things aren't worth doing. They're just not the big ticket items supporters claim. And certainly not a meaningful answer to the title question - which I assumed was the whole point.

Well, another suggestion that apparently isn't sufficient. But no hint at a proposed real answer yet.

We don't have an inflation problem. So we don't likely have a supply side economic problem.

Thankfully, another hint. Maybe a demand-side problem! Helicopter Ben or a super-negative interest rate money machine! Inquiring minds want to know, ref the thread title--any positive suggestions?

 

[Midpack]

 

[samclem]

To your broader point, if the trouble with the U.S. economy were externally imposed constraints on flexibility, innovation, etc. (i.e. supply side restrictions) then one unavoidable symptom would be rising inflation. And the harder the Fed pushed to raise output against those constraints, the more inflation we'd have.

Yes, we'd have inflation (or inflationary pressures) if we had supply-side restrictions and no concomitant demand side restrictions/impediments. If we had restrictions/impediments on both sides, we could experience no/low inflation as well as no/low GDP growth, low wage growth/low employment (as we see now, when expressed in absolute labor participation rates, etc). Food for thought.

 

[CaliforniaMan]

I'd say education is necessary but not sufficient. The world has many countries with education systems that are really good (better than ours), but with economies that never quite match the clear talents of their workforces (India is a clear example that comes to mind). So, yes, we need a great education system that does significantly better than the one we have now, but we also need a vibrant, flexible economy that allows those talents to be put to productive use. There are many well-known means of doing this, primarily centered around re-orienting our economy (and our workforce, and our capital) to respond to "true" market forces (as opposed to centrally-directed priorities), and to reduce government incentives that run counter to that goal. We'll know that we're headed in the right direction when there's a vast increase in the demand for engineers and a reduction in the demand for lawyers. The necessary discussion of specifics here would bring out the pig, so I don't think we'll be having a meaty discussion like that.

I did not mean to imply that the best educated population is the only issue that needs addressing, but without having it as a primary long term strategy the rest won't matter. As we all know we live in an age of increasing automation and globalization. Manufacturing and creative thinking can be done anywhere and sold anywhere. We need to have the best educated and most creative population, that is our most valuable resource. And by that I mean the population as a whole, not just the top few percent as in some of the countries to which you refer.

We already have a huge head start. We have a free thinking people, an independent judiciary, the rule of law, a stable government, and some of the best universities if not the best universities in the world.

But the world is changing and we need our entire population educated, we cannot let any other country get ahead of us on this. And this must be a long term priority. It is generational.

I agree there are many tactical issues we will face now and in the future not only education. But if we don't have the most competitive population, it won't matter.

 

[NW-Bound]

But what one considers "digging", others may call it "mining for a solution".

 

[LOL!]

+1
Many economists are pointing out an opposite that despite some of middle class people moved up, the bigger part had moved down.

The Pew research that was quoted earlier completely refutes that statement.

 

[VFK57]

The Pew research that was quoted earlier completely refutes that statement.

Of course. You use same statistics and "pundits" statements who state that the economy has never been better. But in great economy we would not have sharp growth of Debt, it would go down (like in late 1990s), budget deficit would go down or disappear at all, while it turned back to growth and there would not be any need for "easy money" policies so the rates would go back to normal. Of course we can choose not to pay attention on such "meaningless" numbers.

 

[Nemo2]

What about the influence of intangibles such as morale, sense of national purpose, diminution of collective lassitude, etc?

 

[Whisper66]

.... But in great economy we would not have sharp growth of Debt, it would go down (like in late 1990s), budget deficit would go down or disappear at all, while it turned back to growth and there would not be any need for "easy money" policies so the rates would go back to normal. Of course we can choose not to pay attention on such "meaningless" numbers.

+1 This is the classic understanding of a good economy. Seems like our country would prefer to push the current situation as far as it will go, justify it as best we can and hope for the best. I suppose if growth can overcome debt, it will all work out fine. But I prefer a country in better control of their fiscal policy.

 

[Gone4Good]

Yes, we'd have inflation (or inflationary pressures) if we had supply-side restrictions and no concomitant demand side restrictions/impediments. If we had restrictions/impediments on both sides, we could experience no/low inflation as well as no/low GDP growth, low wage growth/low employment (as we see now, when expressed in absolute labor participation rates, etc). Food for thought.

Hmm, consulting my Supply / Demand curve

If I have a supply side shock, prices increase and GDP declines
If I have a demand side shock, prices decrease and GDP declines
If I have both a supply side & demand side shock of equal magnitude prices stay the same & GDP drops.

Now consulting my history, we had a 3.3% drop in GDP and a 3.7% drop in CPI, peak to trough.

Sounds like a demand shock to me.

But either way, supply side solutions will just put further downward pressure on prices. And that's exactly what the Fed has been fighting to avoid. So either way it's hard to imagine why we'd want to prioritize solutions that exacerbate the problem

 

[Senator]

My milllennial children have informed me that there are already more millennials than baby boomers.

Given the ages of Millennials, many of them are just starting out in their first jobs. This means they do not have the incomes of folks who have worked for 10, 20, 30 years or more. It also means many of them start at the bottom: retail and food service. Or they are still in school.

So millennials have increased the rolls of the lower income tier, but so what?

There will be an exponential decrease in taxes collected as the older working folks retire. They will be replaced by a lower income group, and a group that is not stigmatized to get government services rather than work.

There may be more people, but likely not more taxes collected when the boomers all retire. Of course, raising taxes solves that issue.

 

[target2019]

Add in the govt contractors too. Raise your glass to dear Uncle Sam!

 

[Gone4Good]

In the category of things that actually hurt recovery and employment growth since the last recession, here's a chart of Government Employment for the past two recoveries.

I'm guessing this is not what most people think happened.

The divergence from trend from 2009 to 2016 represents about 2.4MM jobs, or 1.5% difference in the unemployment rate.

So when people ask "why has recovery been so slow?" This is one big reason.

It also falls under the category of "When you're in a hole, Stop Digging!" as the unemployment rate reached as high as ~10% in 2009/10 when that attrition began.

P.S. Those blips in 2000 and 2010 are temporary census workers.

 

[NW-Bound]

We have 22 million government workers out of about 120 million US workers. So, that's 18%.

I guess there's room to grow. France's number is 44%, and I just read that Saudi Arabia's is 70%. Nice! Roughly one Frenchman to oversee and regulate the other French worker, and in Saudi Arabia's case, 2 regulators per worker. Supernice! The more the merrier?

Everybody is employed.