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Page added on October 1, 2012
What if the U.S. economy stopped growing — forever?
“There was virtually no economic growth before 1750, suggesting that the rapid progress made over the past 250 years could well be a unique episode in human history,” writes Robert J. Gordon, an economist at Northwestern University. “Economic growth may not be a continuous long-term process that lasts forever.”
In his bleak paper, “Is U.S. Economic Growth Over?,” published by the National Bureau of Economic Research, Gordon identifies six “headwinds” that buffet the economy: a labor force shrinking as baby boomers retire, a “plateau in educational attainment,” increasing inequality, outsourcing, ever-higher energy prices, and rising government and household debt. Past industrial revolutions — first the steam engine, then widely available electricity — jump-started the economy, but modern innovations such as the Internet may not have this power.
12 Comments on "What if the U.S. economy stopped growing — forever?"
Rick on Mon, 1st Oct 2012 9:00 pm
It’s over for all, who live on this planet, growth that is. No mention (above) of the real reason, which is peak oil / finite resources.
SOS on Tue, 2nd Oct 2012 12:13 am
Growth isnt over and the planet won’t end.
Population growth fuels economic growth. Energy does not fuel economic growth.
Energy is part of the 4 factors of production: land, labor, capital management. Energy comes from the land. Successful managers will always use the most efficient resource available. We need to manage these 4 factors in order to survive.
The more efficiently these 4 factors are managed the less want we have. The more prolific we become. We are a very successful species because of our successful management of the 4 factors.
Population is just another management challenge. Too much labor. It either must be substituted for something else (shovel for backhoe) or the supply must be reduced.
BillT on Tue, 2nd Oct 2012 2:10 am
Economic growth in the Us ended years ago. All that has happened since is numbers manipulation. Trading paper and using it to cover up the reality of the situation. I know real growth as I lived during the post WW2 years when it was obvious and such numbers as unemployment and inflation were reported accurately. Then, about 1971, it all ended.
SOS is still deluded. Must be something good in that Dakota weed. He is in for a shock when all of that ‘boom’ becomes a bust.
DMyers on Tue, 2nd Oct 2012 2:45 am
BillT is right. The fifties and sixties were the real thing. Economic growth has reached its end. Infinite growth is not an option on this planet. The end of economic growth is held out as a bridge we will cross when we get to it. Well, folks, we got to it. We just don’t quite want to face it.
Our system runs wide open only. The expanding margin of opportunity and profitability is economic growth. Without that, there is limited opportunity or profitability.
One may rely on human ingenuity and intelligence to forever find portals to better worlds, and it seems we have met the challenge in the past. Human ingenuity will decline in proportion to the rise of the police state. More importantly, all told, the achievements of the past have rolled along a narrow road, and that road was paved with oil and girded with coal.
MrEnergyCzar on Tue, 2nd Oct 2012 2:59 am
We’d be forced into a steady state economy and lack of cheap oil will starve a few billion people the next 50 years…
MrEnergyCzar
jaki on Tue, 2nd Oct 2012 4:08 am
SOS is Sarah Palin.
DMyers on Tue, 2nd Oct 2012 4:09 am
EneryCzar
The problem is that there is no middle ground steady state. Ours is a growth only system. This is a debt system. Debt can only be sustained by growth.
If we reach the Olduvai Gorge by 2030, as Richard C. Duncan predicted, then your fifty year time frame is drastically reduced.
Sharpie on Tue, 2nd Oct 2012 4:29 am
Growth “may” not last forever? Washington Post doesn’t seem to realize that we live on a finite planet, either.
Arthur on Tue, 2nd Oct 2012 8:10 am
This forum would have to invent a SOS if he did not volunteer himself, just to keep it lively. Holland is economically still one of the better places to be on this planet, yet car sales in 2011 plummeted a whopping 27%.
http://www.telegraaf.nl/autovisie/13021000/__Autoverkopen_fors_omlaag__.html
These figures mean that the economy is in severe decline. Yesterday new fuel price record of more than 1.90 euro/liter, thanks to VAT increase of 2% and despite decreased demand. Where are these Bakken barrels, SOS? lol
Arthur on Tue, 2nd Oct 2012 8:58 am
Bill correctly identifies the early seventies as the real summit of economic growth in the US. That wealth was generated by the man of the household and the woman stayed at home to look after her four kids. Not coincidentely that summit coincided with US peakoil. I know, the yuppies came later and the Gekko-Wallstreet character and the dotcom craze, yet by that time the working woman had become the norm (and the demise of the American family in it’s wake). Everybody had to be mobilized to keep the income at a constant level and feed the third world hordes as well. The sixties were indeed the golden era and the prestige of the US in the rest of the world knew no bounds. Cars, television, holywood, cinema and it’s shining film stars, holidays abroad entered life, but the moon landing in 1969 was the true culmination of US prestige. Then it stopped. The depressing seventees were Archie Bunker and Meathead and Carter, although the guy did have a point. Drugs apeared on the scene. Then in the eighties there was Reagan, who brought with him a sense of revival (Dukes of Hazard) and defeated the former ally USSR. But in reality he had defeated a corps. Iran managed to escape the Anglo stranglehold. The ninetees were Clinton, the meteoric rise of IT and the financial ‘industry’, creating a fake impression of wealth, where in reality the reserve currency status of the dollar was milked to the max. Clinton was jubilant about the prospect of Euro-America becoming minority soon. Unsurprisingly 50% of his cabinet was jewish. Under Bush, or more aptly under Cheney and his merry band of neocons, came the fake war on terror, a merger of zionist (Clean Break) and imperialist (PNAC) agenda’s, initiated by that mossad operation. Parallel to that we saw the rise of China and Putin-Russia, who both will make sure that the NWO will be dead in the water. Now in the 2012 the countdown to a resource depleted world has begun in earnest.
SOS on Tue, 2nd Oct 2012 4:11 pm
Growth lasts forever, or at least as long as the population continues to grow? Why? The 4 factors of production will adjust and adapt to changing conditions. Do we want growth – read population increases – to continue forever? I dont know thats a political question. Nature on the other hand will see to it as well and it wont necessarily be catastrophic as some of you seem to long for. In fact if you look at population studies that arent politically motivated you will see a leveling off occuring now, with pull back in number over the coming century. Why? mostly education and material satisfaction.
Tom on Wed, 3rd Oct 2012 11:40 pm
Energy is definitely a factor in economic growth, but also in economy as it curently exists. If we have less energy available, then we may have fewer trucks delivering goods, factories producing etc. The internet’s ability to facilitate economic growth is questionable, as it is known to kill some markets, while creating others. The music industry, postal system and other industries have seen significant pullbacks. Oil remains the predominant factor as it becomes less and less available globally.