Saturday, March 1, 2014

The Folly of Continued "Growth"

"Economic forecasters exist to make astrologers look good. Still, the latest forecast from the Congressional Budget Office is sobering. Its economists anticipate a “new normal” average annual growth of only 2.1% (down from the average of 3 to 4% over the last half century), with job growth averaging only 70,000 a month (down from an average of 150,000 to 200,000 over the last half century). Some of this is be due to an aging American population, but some is surely the result of widening inequality. Since the start of the recovery, 95% of all economic gains have gone to the richest 1%, who spend only a fraction of what they’re accumulating. As a result, the rest of the nation doesn’t have the purchasing power to get the economy out of first gear. If this continues much longer, the “new normal” may be far worse than the CBO anticipates."