Growth is Good: Why Slow Growth Can’t Be the New Normal | Intellections

For more information, visit hvr.co/growthis....
Economic growth has slowed way down. Here’s why that matters.
America’s economy is growing at half the rate it used to. Slow growth rates have enormous effects on the quality of life over long periods of time. Getting back to rapid economic growth will alleviate budgetary problems, increase paychecks, and lead to widely shared prosperity.

[@beartrappr2841]

The problem with this is that the data is skewed. They are comparing a 50 year gap with a net growth of 3.5 to a gap of only 15 years with a growth of 1.5. In 2008 there was a recession that effects the data more in a 15 year gap than in a 50 year gap. Besides this ad is acting like there wasn't any problems during that 50 year interval. How many recession periods were there between 1950 and 2000?

[@michaelmcnamara3827]

Didn't watch the video, huh? It's not comparing total growth during those two periods, but ANNUAL growth which is why if we had today's level of growth from 1950-1999 our median income today would be about half what we currently enjoy. The video does not claim there were no slow periods during that 50 year period. It's stating (correctly) that annual growth during that period AVERAGED 3.5%. Which it did. Since we all understand the basic mathematical concept of averages, there's no need to explain that it includes highs and lows, right? The problem addressed in the video is that some people today argue that annual growth rates of 1.5% are the "new normal" and are actually a good thing because we'll use fewer resources and therefore our economy will be more "sustainable." But in 50 years, our median incomes will have grown by less than half what they would be if we'd had 3.5% growth. Just as too much growth is bad and creates upheaval, too little growth is also bad and leads to scarcity, poverty and stagnation.

[@AKhiimme]

It's not about growth and shrinkage of the economy, its about corporate tax, and taxing billionaires. This helped to fund the system, but lobbyists and the like have caused the corporations to not pay their fair share. The tax dodging business is worth trillions of dollars. The answer is not to grow the economy, but to fix the tax loopholes that allow businesses to prosper, without Americans getting their fair share of the prospering.

[@dynamynx]

^This. The whole time I was watching the video I was thinking "wait, you just conveniently forgot about that guy who ran off with 90% of the pie. Why aren't we focusing on that guy and what a dick he's being to the rest of us?"

[@mitchkazin8259]

Adam I don't think you know what the economy is

[@brandonbrown6922]

I also don't think he understands the term "Fair." But, then, most of these "99%" morons don't seem to either.

[@erzerechol9693]

people like you just frustrate me. You say the rich need to pay their fair share and your solution is raising taxes. The rich pay far more than their fair share while middle class pay 10 percent of their money the rich pay 60 percent, the real solution is to stop wasting tax dollars on welfare and other useless things. Because if you are starving and not receiving money from the government every month you will be out looking for a job where you can stop stealing from people and start working. And that's how to fix this country, making it where you either get a job and work or get left behind

[@michaelmcnamara3827]

You do understand that no corporation has ever paid or will ever pay a tax, right? It's really very simple. You own a company. You make a product, you market and sell your product, you pay your workers, you pay your production costs and you keep whatever is left. Sounds great, right? But you want your business to grow and be more successful. So you take some of your income and reinvest it into your business. You buy newer machinery, a larger plant, retrain your workers, improve efficiency. The result is, your costs come out lower and you can sell more items at lower prices. Then along comes government who decides it's entitled to more of what you created. So it raises your taxes. Now you have less money than you expected, so you are faced with a problem. You can cut your expansion plans for next year (and hope your competitors cut theirs too). You can keep less money for yourself. You can raise prices. Or you can find some other way to reduce costs to make up for the tax increase. Here's the thing: No matter what route you take, you'll either be raising prices or not cutting them, which means either way consumers pay more than they would have without the tax. So ultimately, consumers pay EVERY corporate tax. All of it. Every penny. Whenever guys like you advocate for higher corporate or "rich cat" taxes, what you're really demanding is higher taxes on yourself. Thanks a lot. Because we already pay 80 cents out of every dollar in taxes (in some form, at some level, hidden or overt), we really don't need to take more of our hard earned money and give it to corrupt douchebags in government.

[@officialdratsie]

Due note, your comparing economic growth over a 50 year period to 15 year period.

[@BRANDON-uo3wl]

So true, lol.

[@ArticWolfv]

hes comparing growth on a year by year basis adjusted for inflation

[@michaelmcnamara3827]

Actually, they're comparing ANNUAL growth over a 50-year period with ANNUAL growth during a more recent scale, not total growth over a 50-year timeframe with total growth over a decade and a half. If the latter were the case, your objection would be valid. The comparison, however, is perfectly apt and illustrates why slower growth is bad for everyone in the long run. This question comes about in response to the assertions of some who hold that 1% growth is the "new normal" and makes an economy somehow more "sustainable." In fact, the opposite is true.

[@alanq.reeves5920]

There seem to be a lot of people who are upset that a two minute video didn't completely solve all economic problems of the world. The point is that we can't allow the last fifteen years to be indicative of the direction of this current fifty year period. This is supposed to be a starting point for learning more about what pro economic growth policies are and why they matter, not a complete voting guide for every election.

[@Ryan-kh9xn]

Awesome video!

[@carultch]

Anyone who thinks exponential growth can continue infinitely on a finite planet is either a madman or an economist.

[@daveBit15]

I don't see how a 3% annual growth is "exponential."

[@carultch]

If a growth rate is measured as a percentage, and that percentage is expected to continue regardless of the present value, the growth is exponential. It doesn't matter how little the growth rate is. If the growth is multiplicative from the previous year, as opposed to additive from the previous year, that is exponential growth by definition. Example with 1% exponential growth: Year 0: 1000 Year 1: 1010 Year 2: 1020.1 Year 3: 1030.301 Year 4: 1040.60401 Year 10: 1104.622 Year 20: 1220.19 Year 30: 1347. 85 Year 100: 2704.8 Year 200: 7316.02 Now here is an example with incremental growth, with an increment of 10: Year 0: 1000 Year 1: 1010 Year 2: 1020 Year 3: 1030 Year 4: 1040 Year 10: 1100 Year 20: 1200 Year 30: 1300 Year 100: 2000 Year 200: 3000 Plot the value (V) as a function of the year number (n). The incremental growth will have a line for its graph, which can be plotted with the equation V=1000+10*n. The exponential growth will have a concave-up curve, which can be described V=1000*1.01^(n). Because the year number is the exponent, it is called an exponential curve.

[@carultch]

The term exponential describes the shape of the growth. Not the rate of the growth. It may sound like it describes growth being fast, but that is due to the fact that the exponential function grows a lot faster than its counterparts with the same initial value and initial difference from year 0 to year 1.

[@michaelmcnamara3827]

Why do people who don't really understand the meanings of the words they use nevertheless go around acting like they know stuff they don't really know? It's pretty funny to me. The root word of exponential is exponent, which means "multiple thereof." If I raise 3 to the third exponent, the answer is 27. When laymen talk about "exponential growth" what they're really doing is engaging in hyperbole. No economy ever expanded EXPONENTIALLY. Economies expand (or contract) at some percentage versus the prior year, or compared to the previous decade or whatever timeframe is being discussed. So when people throw the word EXPONENTIAL around in economic discussions, it's because they're trying to exaggerate the level of growth to make it sound more impressive -- or more frightening. It may be a finite planet, but it's incredible big. 50 years ago, leading scientists said we'd run out of oil by 1990. Instead, we discovered vast, unsuspected oil deposits -- hundreds of years worth. 40 years ago, a famous scientist wagered with an economist that within 20 years, we'd run out of copper, aluminum, uranium, coal -- all the big materials we use to make modern life possible. Not only did we not run out, but we discovered huge new deposits of each mineral. The economist won the bet. And of course, who could forget the famed scientist who predicted that by the latter half of the 20th century we'd all be facing starvation due to severe overpopulation -- at levels of less than 6 billion people. Today we're feeding over 8 billion and although there is and always will be localized hardship there is nothing remotely hinting at the global extinction level famine predicted by top scientists. Stop the hyperventilating, sonny.

[@keithcooper2012]

carultch Came here to say this.

[@Gr8erThan8]

Great content. Democracy is not stable without a fast growing economy that lets everyone win. Most people don't realize that paying off interest groups is how America has historically kept violent movements from breaking out into war. As the growth slows, these movements (Blm for example) will not be so easily pacified. In the past, we could just pay some of their demands, in a slow growth economy, that will be impossible.

[@matthewgobin2257]

The problem is that the definition of "middle class" has changed and it is now a far more difficult class to get into; and unfortunately education is so expensive and difficult that many people are unable to get the qualification and skills they need to get in

[@eamonlauster1181]

Of course. To grow the economy, we should just enact policies that grow the economy.

[@carultch]

Or we need policies that allow the economy to work without growing.

[@alanq.reeves5920]

What does a working but not growing economy look like? How would you support an expanding population if the economy doesn't grow?

[@carultch]

We have an economy that requires population to grow, in order to function properly. Growth cannot continue indefinitely. We need an economy that will adapt to population, and work with any rate of change in population, be it stable, increasing, or decreasing, rather than an economy that requires population to grow.

[@ugospadafora2014]

OR we need policies that prevents governments from intervening in organic growth. When growth is measured in GDP and is screwed with by the government, we get this environmental disaster of an economy. When you let it happen naturally and measure it in terms of living standards you'd get an environmentally responsible economy and (VERY) comfortable living standards

[@Lithilic]

Doesn't help that our growth has been financed by debt and still isn't enough to meet the 3.5% target. So we have debt to pay plus interest for growth that we didn't get which means we can't pay it back, even after pilfering the funds that were supposed to back social security and medicare despite knowing the baby boomer retirement was coming.

[@TonecrafteLuthiery]

The premise of the argument is kind of misleading, because the average growth rate of the last 16 years is skewed by the 18 month period of job losses during the great recession. If we exclude that from out data set, job growth under Obama has averaged 3.66% (of GDP). Likewise, if you exclude the recession from president Bush's data set, he averaged about 5% growth. The recession is not irrelevent of course, so excluding it does remove some crutial information about our economy that is absolutely necessary to have an informed opinion. The figure I gave for Bush does not reflect the fact that his economic policies started the great recession, and that deregulation and tax cuts under Bush and a number of other previous presidents (including Clinton and Reagan), allowed that devastating crash to happen. My point is simply that our economy is not as bad as the mean job growth over the last 16 years shows, because we've been growing at an average rate for all but about 2 years of that period. So overall, 14 of the last 16 years have seen average growth. Some above average years, some below average years, but overally the average growth rate minus 2007-2009 is actually 4.38%, which is above average if the average from 1950-2000 mentioned in this video is correct. I had some troubling deciphering exactly what this video was asserting as the main reason why growth is stunted, and what the solution is, so the best I could figure was that they were proposing that we deregulate the economy. Usually when Republicans mention deregulating, they aren't talking about the health inspector, they're talking about getting rid of Dodd Frank, Glass Steagall, and carbon emission regulations. I'm not sure if that is what this video is proposing, but if it is, they are very, very wrong. They would essentially be saying, "Hey, do you resent the fact that the top 1% own 60% of America's wealth? Well why don't you let them make more money and they will give it to you!", which would of course be a ridiculous idea. The speed of money (which describes the rate at which money earned by rich people is reinvested into the economy), is only at around 5% even in the best of economic times. That is why tax rates for the rich were 90% under FDR. They understood that a majority of wealth being funneled into the hands of the few was dangerous, they had just witnessed it first hand. An economy where very few own almost all of the weath does not work. Relying on rich people to be generous despite their profit motive is just naive.

[@Paulthored]

George Mason Trickle down economics/tax policy has confused me. mainly because of how I think about it... Namely, if you want to give out a Million Dollars to stimulate the economy and your choices are... 1) give a million to one person out of a group of a million people or 2) give the group of a million people one dollar each And all the information you got on the million people is that one of them will actually just bury it in a hole in their backyard and leave it, while the other 999,999 will spend whatever money they get within the month... it makes much more sense to spread it out rather than risk it being buried somewhere.✌😇

[@bakuya99]

You can't compare a 60 year period to a 15 year period that statistics wouldn't even match up at all....

[@pauljerome01]

Hope we can fix that

[@Paulthored]

Why do you think that the economy could even continue to grow? sooner or later, it Will slow to a paused/stabilized equilibrium or start failing/falling?? also, why is higher taxes automatically a bad thing?

[@ugospadafora2014]

If you're talking about the boom and bust cycle, google "the Austrian theory of the boom and bust cycle of business." It talks about how when you artificially print money (like what the federal reserves are doing) and pump it into the economy it creates a string of spending on bad capital (this part is called the boom) and then that bad capital eventually needs to be liquidated (this is the bust), after which the market stabilizes and real and sustainable growth happens (in terms of living standards). Individuals and businesses on average know best how to spend their money. If there are things that are not made it's because it's currently not the most desired thing. When the government taxes they're taking money from individuals who know what they want to invest in things that are currently not being made because it's simply not efficient in people's eyes. Such as when a bridge is made. If private enterprise hasn't made that bridge it is because currently not enough people really need it. Basically, when the government spends it spends inefficiently, when they raise taxes it is to spend inefficiently and cripple efficient spending, and the result of that is lower living standards.

[@bakuya99]

also the fact that minimum wage is still the same from the 90's into the 2000's and inflation no one is getting paid a living wage so um.. yeah... growth is good im not saying it isn't. But people do not feel said economic growth because they aren't being paid the wages they deserve said people still get a larger chunk of the pie because why not.

[@Davisurena]

failure to understand the exponential function.

[@carultch]

People keep challenging me that it I'm misusing the term exponential, for describing a growth function with a single digit percentage growth, just because it is not doubling, or ten-fold increases in each time unit. Exponential means the shape of the curve, not the growth rate.

[@RatusMax]

Yet, nobody thinks about how to throw out the current system and rebuild it from the ground up. A system that is unbiased and is very explicit to stop people who try to get around it. The current system can't be fixed it can only be placed on life support. It's time to pull the plug and build something new. If another great depression has to occur in order to sway anybody, let it happen. Innovation is dead because college kills it. They teach one how to work under somebody else's foot instead of thinking of new ways to do things. In my eyes college has lost its use for the innovators. I could give two craps about retirement. I am not stupid. Will retirement be there in 2050+? Hell no. Get rid of it now because it was a trash tax hoping that people would not live long to take back money from it.

[@ArticWolfv]

I hear Copyright reform, maybe... just maybe... reduce it from forever + 20 years to something reasonable. say 35 years

[@wesleyogilvie8105]

The economy has done better under democrats than republicans. ~Donald Trump

[@ugospadafora2014]

did he really say that?

[@curioustgeorge]

What metric is being used to explain growth? GDP or something else? It'd be nice to see what is being measured, so we can track it ourselves

[@jimmyshousevideos]

cancer vaccine?

[@smzxvv771]

4th

[@mediabear]

I will not submit to their communist vision for my future and neither should you.

[@JaneDoe-gg3ey]

glad djt was elected