Jim, You are absolutely right about the linkage between economic growth and government revenues! There is a built-in incentive for the government to pursue growth policies, regardless of whether they are appropriate for the national welfare. The limiting case may well be where the growth leads to a systemic environmental collapse that itself makes further growth impossible...
Now my obvious preference would be to take precautionary action before the collapse occurs. The other option is to simply assume it won't happen. For example, "there is no housing bubble," and then innocently ask, when and if it occurs, "WHO could have foreseen this?" Well, the answer to that question is: certainly not those who couldn't foresee the housing bubble. Anyway, I am becoming convinced that sustained growth is not an option. Expansionary fiscal policy might even take us to the brink of "robust and sustained economic expansion" but at that point the stimulus will have to be curtailed because of the inflationary effects of "pump-priming the boom." That point will come long before full employment is within sight. The "moving contradiction" here is the effect that Capital has on working time. It presses to reduce it to its minimum in its necessary form while it poses it as "the sole measure and source of wealth." The detour around that contradiction is debt and the limit to the expansion of that debt is the intangible "trust", "credibility", "good faith", "confidence" or "solvency". It will be difficult to rebuild confidence on the basis of assurances that the state confides, sotto voce, are disingenuous. On Fri, Mar 13, 2009 at 12:15 PM, Jim Devine <[email protected]> wrote: > You have to give Larry _some_ credit. If we were to cut back on > work-hours (hopefully without a cut in yearly pay), as Tom recommends, > it would have the problem of not generating more tax revenues to help > the government moderate the increase in its deficit and debt (one of > the Obama administration's official goals, which can help attain other > government goals). On the other hand and for all it's worth, > GDP-growth does have that positive effect. -- Sandwichman
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