Friday, May 14, 2010

The economy has to grow

Another thing I just can't understand is when all the economists of all colors and nations insist that the "economy has to grow" in order to pay back the debts and create more work, etc. But exactly what has to grow ? Do we need more houses built ? more cars built ? do we need more banks, more people working in banks ? How many more products and houses and cars and furniture can we possibly make and exchange ?

If anything, the west as in USA, EU and JAPAN can't really grow much anymore, these places are saturated with consumer items. Maybe we can tear down all homes and cars every three years and make - buy everything all over again. Then you can have a "growing" economy.

Of course the only economies that will really grow in this sense will be Latin America, India, China, Indonesia and a few others as they transit from low class to middle class, but once that 20 to 30 year growth window is achieved, they will go in low growth to no growth pattern as in "The Lost Decades of JAPAN".

But even so, manufacturig as such does not follow a linear law of more items produced, more labor needed: actually most optimized factories can produce even 3 times more of any item with very few new "hires". So what gives ? Aside from the fact that manufacturing is done by robotys or in China and Indonesia for 200 dollars a month salaries, what gives ? EXACTLY WHAT ON EARTH HAS TO GROW FOR THE ECONOMY TO GROW ?

Hint, Hint .... Maybe health care, as in make everyone sick and needing as many pills as possible to get them even more sick and needing more pills, operations, hospitals etc. Yeah, get everyone all sick and busted, 100 million people working in hospitals to cure and render even more sick 200 million people...

Not signed, but a very good point.
May be what they want to grow is debts...
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