October 7, 2012

  • Growth at all Costs...

    One of the things I think is very interesting about economic perspectives on current growth rates.  There seems to be an assumption that growth should occur indefinitely and at high rates.  A recent article in the economist talks about why Canada should increase consumption to boost economic growth. 

    I'm not sure GDP growth should be looked at as some sort of arbitrary target.  Borrowing to drive growth cannot be a long term solution; repayment of the debts used to drive growth eventually curtail growth... you borrow now, but will pay later...  this isn't rocket science.  The pursuit of stable growth rates isn't a science - and macroeconomic, regional and global forces affect it.  To believe that one nation can control its growth rate indefinitely is poppy-cock.

    The sooner our economies adjust to the reality of debt and overspending, the better.  Better pain now than later - because the uncertainty of colossal debt (yes, we could default - but that results in economic upheaval - vis a vis Argentina or even pre-Reich Germany.  Government/societal default does not normally presage good times.

    F