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The Real U.S. Economy

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PostPosted: Sun Jan 25, 2009 1:29 pm    Post subject: The Real U.S. Economy Reply with quote

The real U.S. economy has generally been ignored, including an "overabundance" of real assets and goods, that raised household living standards at a steeper rate, substantially greater efficiencies of firms, in producing more output with fewer inputs, and the government borrowing almost for free.

Moreover, the assumption is Bush hasn't been a fiscal conservative. However, his major problems arise from being too fiscally conservative, including fighting cheap wars and not spending enough or cutting taxes further during the financial crisis.

It's amazing there were enormous real improvements in the U.S. economy, that were greater than the 1990s, during a structural bear market that began in 2000, after the spectacular structural bull market from 1982-00, and these improvements have largely been ignored.

Some say it's "reckless consumption." However, it's rational consumption. Just like the volume of output in itself will cause declining prices and induce demand, the volume of capital will in itself cause interest rates to fall and induce demand.

Also, I may add, high debt levels and low savings will cause Americans to work longer, and postpone retirements, which will add to future economic growth.

Obviously, the mainstream, i.e. liberal, media loves Obama. It has already compared him to Lincoln. However, what I've seen of his plan so far is he's promoting inefficiency (micromanaging the economy) and immorality (expanding bailouts beyond the systemic problem in the financial industry, and loans in the auto industry). Obama seems naive how the free market works to a large extent.

Chart of key economic indicators in link below. The media has attempted to compare this recession with the Great Depression. However, the recession of 1981-82 was much worse than the current recession (also, the real price of gasoline is $1.82 today compared to $3.45 in 1981).

From an Article: The 60% growth in world per-capita real GDP between 2002 and 2008 is probably one of the greatest periods of economic growth in such a short period of time in history, and is definitely part of the broader, more upbeat context of this period in history. Chart below:

Moreover, I may add, U.S. producers have become substantially more energy efficient in the 2000s. U.S. multinationals offshored obsolete or high cost goods (e.g. heavy goods) for big profits, rather than discontinue operations of those goods, and then imported those goods at lower prices (U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth in the 2000s). Freed-up limited resources were shifted into emerging industries and into "core" goods of older industries with market power. U.S. production has become lighter. Many goods the U.S. produces weigh almost nothing. The U.S. leads the rest of the world combined in Information Age and Biotech Revolution firms in both revenues and profits. However, on the consumption side, the U.S. is less energy efficient, because Americans live in bigger, better, and newer houses, drive bigger, better, and newer autos, etc.
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