Picking a country where the public and private sectors are so corruptly intertwined, where the military is literally employed as labour and runs factories, where minorities and dissidents are engaged in forced labour as a state policy, and where both the environment and human working conditions are blatantly disregarded is not going to lend itself to a fair comparison against us. No shit they hit 6% GDP growth. When their exploitation of human capital is so very i constrained as it is, of course they’ll achieve what, numerically, can be called ‘efficiency’.
All of that just avoids the point. There are lots of countries with poor labour standards, human rights violations, authoritarian governments, etc. who haven't been experiencing explosive economic growth for the last 40 years. China used to have all those things before they became the fastest growing economy in the world, and they still do, so what do you think changed which caused such drastic growth since the 80s? (hint: it involves China "opening" for business, the private sector, and a whole lot of increased production as a result)
Economic growth is really just an increase in what you are producing / selling. You can increase production by increasing the amount of people working (like the west did during/after WW2 when women started entering into the workplace) or you can become more efficient with the workforce you have (which ultimately is a result of technology and innovation... driven by a company's desire to be better than their competitor so they can sell more).
Even Keynes' ideas about "spending" to "stimulate" the economy were based around actually investing in something at the very least, not "circulating money." I.e. Investing in infrastructure while prices are low, which will lead to greater efficiencies for the private sector. Somehow people have morphed that into thinking building a bridge to nowhere creates economic growth just because it "injects cash into the market" when it creates some temporary jobs.
whether you call it Keynesian economics, macroeconomics, whatever...there are most certainly elements of worth of the multiplicative effect of re-investment, no matter what you want to call it. Money spent on people, whether public servants or not, would only be of no value to the economy if they immediately took that money and physically destroyed it...ie. burning cash. Even burning earnings in the form of cigarettes provide value to the retailer that sold the cigarettes.
Ummm nope, if you provide someone money and they do nothing except consume it in exchange, you essentially have burned your money. You're obviously married to the idea that "spending" just automatically leads to economic growth, please demonstrate it. The broken windows fallacy demonstrates otherwise quite aptly.
So wealth is only created by distributing things that someone collected (fish, plants, etc.) and then charged money from others to acquire? Again, my landscaper who has grown his business (capital/equity) would beg to differ with you. You also haven’t addressed the value of services to an economy. Do you think that only goods, and the most cheaply produced, are of any value to a nation’s economy?
That's one hell of a leap away from what I said.
Entrepreneurs take risks; they invest in ideas, not just ‘making something cheaper.’ Again, what about services as well as (the cheapest) goods
You're just being argumentative because you're insulted by this idea that public sector doesn't grow the economy. This point is just you trying to nitpick something. Entreprenuers are trying to provide
more value than their competitors. Even if their selling point is "quality," (selling at a premium price), they're trying to sell quality at a cheaper premium relative to the value they are providing, so that you choose their product and not their competitors.
What about services? It's the exact same thing. They need to provide the most value to be competitive. They want to find cheaper and more efficient ways to doing things. Does your landscaper expect to make any money if his price is twice as high as his competitors? Has he not invested in some tools so that he can do his job more efficiently, and therefore offer a lower price than he otherwise could?
Dick Cheney would disagree that your broken windows fallacy is a slam dunk. Your ‘proof’ of refuting spending as a means to contribute to an economy is no more valid than your wholesale dismissal of Keynesian macroeconomics.
Lol, okay, Dick Cheney disagrees with me. That's a real compelling counterargument.
So a race to the bottom of profitability and gross margin is a characteristic of true wealth? I see you conveniently took only the absolute value of China’s GDP, and not the per capita value...so disproportionate contribution of sweat equity to GDP is also an important element of the wealth of any society?
Like I said, you're just being argumentative. You should at least check to see whether your counterargument makes any sense. China's GDP per capita has grown exponentially since the 80s as well. In 2008 it grew by 28%.
It's unfortunately too convenient for you guys to dismiss their insane economic growth by chalking up to their cheap labour, as if they didn't have all that in the 1950s when they were practically a third world country and had a GDP comparable to Canada's.
What’s your view of governments’ role in advancing technology; say for instance all those public servants in the US who participated in the space program (NASA employees are
Public Servants free all) and the government funding to develop technology to support it? Or government money spent on technology to creat a multi-nodal electronic data communications network and the spin-off benefit that civilians around the world derived from such government initiated investment? There are more than a few
employees of industry who continue to generate their own wealth primarily through multiple governments’ expenditures.
Like I said, there's two ways to create economic growth. Add more people to the labour force (which just creates absolute growth as you mentioned) or producre more with the same amoutn of people (become more efficient through technology / innovation).
Government contributions to technological advances certainly do increase economic growth, and so would government stimulus if it was spent in a manner that makes sense
like Keynes had suggested (such as infrastructure that creates
efficiency) and his followers have ignored whilst pissing government money up a tree (like on a bridge to nowhere).
Just to confirm, is this the same Peter Schiff who recommended an U.S. VAT to replace all federal and state taxes as a means to support economic growth? I though you said that taxes are only a defensive measure, not an offensive growth measure? Personally, I’d lean towards Maynard Keynes before the likes of Schiff, when it comes to economic theory and practice. Like him or not, there is general acceptance of his macroeconomic theories.
Not aware of his arguments about VAT, although I would completely agree with that. It's well known that VATs are far more
efficient than almost all other forms taxes, the problem is not the tax method but that it's politically unpopular. Perhaps you might want to learn about them and why he's making that argument, since you seem to fall into the camp of having dismissed the idea without fully exploring it.
You can side with the Keynesians all you want. I'd say Schiff is clearly up on the scoreboard when it comes to predicting where the economy is going.
