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The End Of Growth In The West?

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The last 15 years has shown that economic growth in the west can only be achieved via reckless credit expansion and/or reckless deficit spending.

My view is that the effects of globalisation were masked by the credit boom and have only recently started to reveal its true consequences to the west.

So what next? The assumption is that growth will restart sooner or later... but will it?, and is growth that important anyway? (surely a stable economy that balances its books is better than a bankrupt one).

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I don't think it's shown that there can't be growth in the West, just that trying to take what seemed like the easy path to the short-sighted would end in disaster. You may be right if that's the path that'll always be attempted in future ("it's different this time").

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Countries that allow development like Australia seem to have seen good real growth. However in most western nations you simply are not allowed to expand production. Any project faces a mountain of regulations.. and there is no point trying to get through them all, when dozens of other nations in the world are eager to win the investment. And thereby expand their own real production.

The US saw that in the Gulf of Mexico recently. After the government went nuclear with regulations after one spill.. a lot of the money and skilled people left for greener pastures offshore drilling in other parts of the world.

A fatal problem is that all of the promises in our society, from pensions to long term guarunteed investments are built on the assumption that the economy would be growing at a modest, healthy rate. If we decide to go for no growth, then all those promises made have to be dramatically lowered. Or just defaulted on.

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The last 15 years has shown that economic growth in the west can only be achieved via reckless credit expansion and/or reckless deficit spending.

My view is that the effects of globalisation were masked by the credit boom and have only recently started to reveal its true consequences to the west.

So what next? The assumption is that growth will restart sooner or later... but will it?, and is growth that important anyway? (surely a stable economy that balances its books is better than a bankrupt one).

"can only"...disagree.

The opportunities for wealth creation are enormous. There's still a lot technology can help with. Building technology can actually create land/space (sky scrapers) whilst still keeping the parking/streets below (not that we need this as there is plenty of room at the moment) etc.

Technology can be used to more greatly deal with how different people impose their risk on others e.g. cameras/GPS technology to allow cautious drivers to prove they are just that and not take the costs of the bad drivers too.

The ability for people to cut down on substituting travelling for technology is something that has had a very slow growth and I know many people believe it'll never happen but I still firmly believe it will.

There are still MASSIVE inefficiencies out there that we can already envisage a solution for. That's reason to be optimistic.

However, that doesn't mean I'm optimistic in the short term. The government is trashing everything right now.

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"can only"...disagree.

The opportunities for wealth creation are enormous.

Yes, but not in the West. Who in their right mind would invest in a place where wages are ten times higher than next door.

There are still MASSIVE inefficiencies out there that we can already envisage a solution for. That's reason to be optimistic.

I fully agree, the potential for labour reductions and productivity increases are still mind boggling. Not everyone will be optimistic about it though.

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The last 15 years has shown that economic growth in the west can only be achieved via reckless credit expansion and/or reckless deficit spending.

My view is that the effects of globalisation were masked by the credit boom and have only recently started to reveal its true consequences to the west.

So what next? The assumption is that growth will restart sooner or later... but will it?, and is growth that important anyway? (surely a stable economy that balances its books is better than a bankrupt one).

Yes you are correct, the disastrous decisions made since the mid 1990’s have doomed the west to a depression worse than the 1930’s.

We thought we could outsource our manufacturing base to Asia and live off ever expanding levels of credit. Have our cake and eat it. The massive imbalances in wages between west and east prevents any kind of sustained manufacturing led recovery. The “economic rebalancing” we are attempting is impossible.

Compounded by the € crisis and huge debt levels build up over the last 10-20 years. The similarities with the 1920-1930’s period are striking, but we are in an even worse position. We had a more balanced economy in the 1920’s, less debt and breaking up the gold standard was relatively easy compared to the potential collapse of the euro.

Any kind of sustained recovery to growth will require radical policies, protectionism against countries with massive wage disparity, hard mortgage limits fixed to income, reindustrialisation and probable massive levels of government involvement in the economy not seen since WW2.

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Yes you are correct, the disastrous decisions made since the mid 1990’s have doomed the west to a depression worse than the 1930’s.

We thought we could outsource our manufacturing base to Asia and live off ever expanding levels of credit. Have our cake and eat it. The massive imbalances in wages between west and east prevents any kind of sustained manufacturing led recovery. The “economic rebalancing” we are attempting is impossible.

Compounded by the € crisis and huge debt levels build up over the last 10-20 years. The similarities with the 1920-1930’s period are striking, but we are in an even worse position. We had a more balanced economy in the 1920’s, less debt and breaking up the gold standard was relatively easy compared to the potential collapse of the euro.

Any kind of sustained recovery to growth will require radical policies, protectionism against countries with massive wage disparity, hard mortgage limits fixed to income, reindustrialisation and probable massive levels of government involvement in the economy not seen since WW2.

Id say 55% of GDP is massive levels of govt involvement in the economy, in fact across the Western Govts involvement has been consistently growing for a century which is most of the problem, you wont fix the problem by making it worse.

As for the end of growth clearly there is no reason for growth not to continue as it mostly always has throughout history at various rates, its not the end of the world, the economy will grow again once the imbalances have been removed and most of the debt repudiated, same as every other credit cycle. With the debt rebalancing govt will shrink so its constant economic distortion of enforcing and enriching its aparatchiks at the expense of the economy also reduces, then the next debt expansion cycle can be begin and X decades later another peak debt can be reached, cycle repeats

Edited by Tamara De Lempicka

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we have excellent growth prospects in the west once this weird 10 year phase has passed and the housing issue dead and buried.

we have excellent engineering skills and innovation. the products we produce /d we first class. the problem was the same as it is now. MINDSET. how many people used to slag off british cars, when in fact they were good. look how they destroyed rover in favor of exchanging higher and higher house prices. now that bubbles popped they have nothing left in the can. pumping printed money after money wont work. peugeot, dyson and most other manufacturers had to leave the country due to the cost of living pressing on wages.

they have to destroy high housing costs so wage demands are lower. once that happens we can begin to produce and export.

its the blocker. but the banks are so knee deep in it, dropping house prices will drop them too, but its that or we all go down.

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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