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Author: brucedoe Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 465273  
Subject: Re: Can Washington improve GDP growth? Date: 11/17/2012 1:40 PM
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Yoda

A very relevant commentary.

The U.S. populaton in 1900 was 76.212 million (http://geography.about.com/od/obtainpopulationdata/a/uspop.h...). When I was born (1931) the U.S. population was 123 million. The population in 2000 was 281.421 million, nearly a tripling in 100 years The estimate of our population today is 314.783 million.

To make the claim that declining population growth is bad shows a very weakness of the capitalist system. It depends on a population that wants ever more (http://stopcontinentaldrift.blogspot.com/2011/08/more.html) and/or increasing exports over imports (i.e. the rest of the world wanting more). You can sell more by having a population increase (if they can find jobs) either through birth rates or immigration or you can do it by just making people want more, or both. Here advertising plays a big role (http://stopcontinentaldrift.blogspot.com/2011/12/hurry.html).
China which has had declining population growth (single child policy) but with an increasing economy because of exports is a good example.

At some point population growth results in an intractable problem. China and India are good examples where you have a subpopulaton that economically is comparatively well off but a bulk population that isn't and lives in extreme poverty.

What is the breaking point of this? It used to be said to be a population of around 200 million (we passed that around 1969), but you don't hear this any more now that our population has topped 300 million.

The above is a problem that is not discussed in Yoda's reference to [2] Research Affiliates paper: 1% . . . The New Normal Growth Rate?
http://researchaffiliates.com/ideas/pdf/fundamentals/Fundame...... who prefers increasing immigration.

It could be that through immigration we could increase GDP but also have a growing subpopulation living in poverty. We may, in fact, have turned that point (though at some point far in the future, the baby boomers too will gradually disappear).

So how can you have a satisfying "no growth" economy that can be sustained? Unfortunately, I have no idea.* A comment by a psychiatrist who treats mainly very wealthy people comes to mind, however. He said that there is one thing about very wealthy people that simplifies treatment a bit. They know that money is not the solution to their problems.

* Communism has been tried many times over the last couple of millennia. Among other failings, communism seems to result in dictatorships and not benign ones at that.

brucedoe
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