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

[Senator]

Wage growth is just a natural course of low unemployment. ie if there are more job openings more people will quit and take higher paying jobs.. the lower paying companies will lose too many people and HR will have to resolve it by upping pay for new hires to get anyone to apply... simple evolution and with the rate now lower than 5%, that's pretty much guaranteed to happen.

That is conventional wisdom. Unfortunately, there is a surplus of labor on the low-skill side. The shortage is in the tech and higher skilled trades.

There is virtually an unlimited amount of low-skill labor in the USA and the world.

 

[RonBoyd]

Fed, ECB, PBOC need to be cheerleaders for their economies

How about telling the world that, with a growth rate of 2.4 percent for the second consecutive year, the U.S. economy is currently operating almost an entire percentage point above its long-term potential, delineated by the available labor and (physical) capital resources?

And how about a reminder that, thanks to this nicely growing economy, Uncle Sam cut a check to the rest of the world last year for $758.9 billion, after a $741.5 billion contribution he sent out in 2014? You can think of these checks as being literally written by the Fed's support to the economy, and endorsed by the international trade policy conducted by the White House and the Congress, which is now becoming a big bone of contention in presidential primaries.

How does that strike you, compared with $1 trillion sucked out of the global economy by countries ballyhooed as the "future of the world," and those developed economies seeking growth by living off their trade partners? Out of that number, what is called the "dynamic Asia" got a cool $585 billion hongbao for its Spring Festival. But the Uncle did not even get a "thank you" note.

 

[ESRwannabe]

IMHO they should change the taxes so that it benefits companies to invest in the US instead of holding cash offshore.

I'd suggest getting rid of corporate loop holes and simplify everything at a much lower corporate tax rate. I'd imagine you could come out even on tax revenue but you'd make the US more enticing for companies to come to the US.

I also think we need to crack down on the drug companies as they are price gouging us compared to everywhere else in the world.

I'd also suggest we scale back our foreign military bases and stop interfering in everybody else's business.

 

[Big_Hitter]

Internal Revenue Code?

yes

 

[gerntz]

Governments don't take money --out-- of the economy with regulations. Regulations require that money be spent improving safety, properly disposing of hazmat, keeping better track of things, and hiring people to do these things etc etc. That's money spent and therefore dumped, trickled down, as it were, back into the economy. What happens when all, 100% of any and all regulations are pulled? There will still be unemployment. Underemployment. Businessmen will still manage to find ways to go out of business. All the things that we suffer from now will still exist only with no way to address them.

Regulation, like taxes, should be as low as possible, while simultaneously being as high as necessary.

There's no cost/benefit analysis of those regulations, the governments just decide it will be done. Requiring prevailing wages doesn't help cost effectiveness. And the bureaucrats "managing" these programs are overpaid relative to the private workers & have zero incentive to do a cost effective job; i.e., the more they make something cost the more they can cry they don't have enough. If these things were cost effective, there'd be no need for a private economy.

 

[GrayHare]

Automation is deflationary because it reduces the demand for human labor, and thus reduces the toal money earned via labor. Deflation will work itself out eventually, but if one is in a hurry either get rid of the machines or find another way for people to get money.

 

[gerntz]

But pretty incorrect. The government is critical in creating some of the most wildly economic beneficial initiatives, such as the nation highway system. The government is usually responsible for creating situations to encourage capital risk in fledgling industries, like wind and solar. They kept the auto industry afloat, proving me wrong on my call to let them die.

But is there tons of waste, yes, but many regulations are quite useful, such as ensuring there is no lead in your drinking water, ie Flint.


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Infrastructure isn't regulation nor taking. Totally wrong on government being able to pick winning industries to spend, not invest, on. If solar & wind are cost effective, they don't need governments' hands messing them up. Government screwed over the auto industry bondholders who had nothing to do with running the auto industry to protect union pensions, thus picking winners & losers. We'd had autos being made today if government had kept their nose out of the business.

 

[Independent]

I'm not sure what "healthy economic growth" means.

Real per capita GDP has grown by about 59% over the last 30 years.
If that had been spread around to most people, I think we'd be satisfied with our economic growth.

But, real median wages have gone up by about 10% over the same 30 years. That doesn't feel very good.

So, I'd look for ideas that are going to help the median worker much more than the executives and business owners.

For example, we don't build infrastructure with picks and shovels any more, we use mega-machines. I'd expect the owners of those machines would be the big winners in more infrastructure spending. I'm not sure that they would also pay most of the taxes for the construction.

 

[dallas27]

This does create a question of, "does anyone in america even have to work?"



When robots take a position that an employer has, productivity increases dramatically. The robot can work 24x7, 365 days a year. No overtime, no OSHA, no workers comp, no pension, etc. Savings produced by robots could be distributed to the people, much like Alaska oil revenues.



Assuming we could tax a robots productivity, you could pay the three people the prevailing wage that a robot is saving, and the company would still save money. If the robot was paid a wage, and the wage was paid in as a tax, there would still be no employer taxes, workers comp, etc. It would still be a huge savings to the company.



People could work on their own endeavors, without needing college or long days. It may save healthcare costs and free up medical resources, as many people use some sort of medical excuse not to work. FIRE would be come a thing of the past, it would be automatic at age 18 if you want.



People could spend the money they receive and generate economic activity.



I think if robots become more prevalent, it may even help the economy. Assuming the extra productivity was distributed properly.

Nice idea, but those companies are competing with overseas companies that can hire 200 workers in three shifts for the price of our robot.


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[dallas27]

Infrastructure isn't regulation nor taking. Totally wrong on government being able to pick winning industries to spend, not invest, on. If solar & wind are cost effective, they don't need governments' hands messing them up. Government screwed over the auto industry bondholders who had nothing to do with running the auto industry to protect union pensions, thus picking winners & losers. We'd had autos being made today if government had kept their nose out of the business.

You seem very open minded. I retreat.


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[Senator]

Nice idea, but those companies are competing with overseas companies that can hire 200 workers in three shifts for the price of our robot.

No problem. Have a tariff to make up for our regulations. If they do not have clean air standards, add a percentage that it costs US companies. The same with OSHA and labor laws. If their workers are not being paid as well on a living wage scale, include a tariff for that. Even the playing field.

Our companies could produce goods just as cheap as China if we let them ignore our laws. Use the river to dump in, hire prisoners, eliminate labor laws, etc.

 

[GrayHare]

Protectionist tariffs were tried during the 1930s but generally did not improve the situation.

 

[dallas27]

No problem. Have a tariff to make up for our regulations. If they do not have clean air standards, add a percentage that it costs US companies. The same with OSHA and labor laws. If their workers are not being paid as well on a living wage scale, include a tariff for that. Even the playing field.

Our companies could produce goods just as cheap as China if we let them ignore our laws. Use the river to dump in, hire prisoners, eliminate labor laws, etc.

We can only tariff our own market, it doesn't help our companies compete in the world market.


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[Senator]

We can only tariff our own market, it doesn't help our companies compete in the world market.

That is all we care about. Competition with our manufacturers here in the USA. Our exports will either compete head to head, or they will not get exported. Just the way they are now.

When you can export iron ore from the USA to China, make it into steel and ship it back cheaper than to make it right here in the USA, there is a problem.

We import many things, the countries get a bunch of USDs. The countries refuse to spend it here in the US, so there is a trade imbalance.

We could make all trade be done in the currency of the country of origin. If the country did not accept their own currency, we do not buy from them. The companies importing would have to buy the goods in the currency of the country that they were buying from. It would force companies to buy the currencies of our trading partners.

Our country has been taken advantage of by many other countries. It has cost us our manufacturing base and our economy.

 

[dallas27]

That is all we care about. Competition with our manufacturers here in the USA. Our exports will either compete head to head, or they will not get exported. Just the way they are now.



When you can export iron ore from the USA to China, make it into steel and ship it back cheaper than to make it right here in the USA, there is a problem.



We import many things, the countries get a bunch of USDs. The countries refuse to spend it here in the US, so there is a trade imbalance.



We could make all trade be done in the currency of the country of origin. If the country did not accept their own currency, we do not buy from them. The companies importing would have to buy the goods in the currency of the country that they were buying from. It would force companies to buy the currencies of our trading partners.



Our country has been taken advantage of by many other countries. It has cost us our manufacturing base and our economy.

We are the only world power. We have it pretty good, but you make it seem like we are shoved and locked in a high school locker.

I think you underestimate that all US companies compete globally, and often primarily.

By the way, see sugar and corn for unfair trade practices in the US.


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[samclem]

People could spend the money they receive and generate economic activity.

I think if robots become more prevalent, it may even help the economy. Assuming the extra productivity was distributed properly.

I'm pretty sure your post was facetious (where's that irony font we've asked for?). But for anyone interested in what it looks like when individual income is decoupled from individual effort and people get a check from the government based on the general health of the government coffers, spend some time in Saudi Arabia.

Governments don't take money --out-- of the economy with regulations. Regulations require that money be spent improving safety, properly disposing of hazmat, keeping better track of things, and hiring people to do these things etc etc. That's money spent and therefore dumped, trickled down, as it were, back into the economy.

Sounds like you are going down the classic "parable of the broken window" road here. Not all spending is equal in its impact, and every dime spent complying with a regulation is a dime not put to use somewhere else.
Economics in One Lesson--Henry Hazzlit.

That doesn't mean all regulations are bad, but it is definitely possible to write a law that decreases total prosperity and welfare. We have thousands of them as proof.

Regulation, like taxes, should be as low as possible, while simultaneously being as high as necessary.

+1

 

[Lucantes]

spend some time in Saudi Arabia.

 

[Senator]

We are the only world power. We have it pretty good, but you make it seem like we are shoved and locked in a high school locker.

I think you underestimate that all US companies compete globally, and often primarily.

By the way, see sugar and corn for unfair trade practices in the US.

You are 100% correct, we can compete globally, as we can manufacture stuff overseas. We can use the same disposable workforce that other countries use. And we do. We then use the other countries labor laws. We make batteries in India, we make Sheetrock, foods and kids toys in China, etc.

We can compete here too, but we have to manufacture stuff in third world countries. Corn and sugar prices are a statistical blip in the USA global trade imbalance.

One thing we cannot do, is create good jobs here for the masses. If the USA wants good jobs, we need manufacturing here. Of course, higher wages are only needed to stem deflation and to continue to have a better lifestyle. Countries can have massive political upheavals when there is a large income imbalance. Castro or Chavez would not ever have been heard of, if those countries did not have the income disparity that they did.

It could be that manufacturing in the USA has reached structural obsolescence. Our service industries have become the new manufacturing segment. They are no longer a stepping stone to higher wages, but a career in and of themselves. Being a fast food worker may very well become a new lifetime career here in the USA. Or janitorial services. Our upcoming demographics suggest that could indeed be the case.

The low paid (today) workers may well need to make as much as an engineer. Both work 40 hours, the worker in the fast food restaurant may even view their job as more difficult than an engineer. With outbreaks of eColi and salmonella, fast food workers hold the nations health in their hands. Engineering is becoming more of a commodity with the ability to import engineers and export engineering work.

In order to get the economy going, we need workers to have higher wages, and the only way is to have more higher paying jobs here. If you think the budget deficit is bad now, wait until the average wage drops even more.

Baby boomers are retiring, they are the nations highest paid workers. Three people making $33.3K a year (with 4 kids), pay a LOT less in taxes than one person making $100K.

 

[Gone4Good]

Ah, yes, the all powerful prescription to "cut regulations." As obviously agreeable to all who hear it as it is vague. Quite like "cut waste, fraud and abuse" in this way.

But when pressed, few can name any specific examples of regulation reforms that clearly generate more in savings than they cost. That's why every new administration promises to reform regulations and "make government smarter." And after every administration the regulatory apparatus is largely unchanged.

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.

 

[Whisper66]

Ah, yes, the all powerful prescription to "cut regulations." As obviously agreeable to all who hear it as it is vague. Quite like "cut waste, fraud and abuse" in this way.

But when pressed, few can name any specific examples of regulation reforms that clearly generate more in savings than they cost. That's why every new administration promises to reform regulations and "make government smarter." And after every administration the regulatory apparatus is largely unchanged.

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.

If one really needs help finding examples, do a simple google search and choose from among the hundreds that may be of specific interest to you.

 

[eytonxav]

Some wishful thinking:

> terrorists bomb part of Saudi oil fields

> lower corporate tax rate/reduce regulations

> build infrastructure

> pay down debt

> lets have a little inflation so wages and interest rates rise

> create a few next big things

> incite companies to bring higher tech non-textile manufacturing jobs back to US

> stabilize some of the global hotspots

 

[LOL!]

My spouse got a very nice raise this year. Lots of job growth around us as well. Unemployment is quite low. Two income families have figured out how to spend less and thus can go back to one-income families. My college graduate went immediately into a very nice engineering job.

I am out of a job myself, but I don't need to work because the stock and bond markets are doing what they are expected to do. And taxes are incredibly low, too. That goes along with low interest rates.

Anyways, I think the economy is great. It doesn't matter what gloom and doomsters propagate. One just has to get out and see that things are not nearly as pessimistic as some folks want you to believe.

America is Great!

 

[Whisper66]

Anyways, I think the economy is great. It doesn't matter what gloom and doomsters propagate. One just has to get out and see that things are not nearly as pessimistic as some folks want you to believe.

It's always very interesting to me the different perspectives we all have on our economy. During the 2008 downturn, things felt fine around where I lived in Texas - people had jobs, restaurants were full, people still going on nice vacations etc... Just didn't see a lot of signs of the downturn other than our portfolio value. But where my relatives live in the Northeast, they observed the opposite. Many jobs lost, restaurants and stores struggling, people really having to work hard to make ends meet.

I suppose the widely varying views are not only a sign of differing viewpoints on what makes a strong economy but also just where we live in the country and how the economy is impacting us personally.

 

[kgtest]

Accelerate projects to repair and replace our aging and deteriorating roads and bridges. This work will need to be done eventually one way or another and it will create lots of jobs and those will have a multiplier effect.

Also deteriorating infrastructure, like the issues in Flint. Lots of jobs could do something good. Of course there is the argument about whether its worth the investment.

 

[Gone4Good]

If one really needs help finding examples, do a simple google search and choose from among the hundreds that may be of specific interest to you.

Thanks for proving my point about the nature of these kinds of claims.