GDP Growth in 2011 and 2012

[Mr.Phips]

I am wondering what people believe will be the real GDP growth rate for the years 2011 and 2012? 

My guesses are 2.3% and 3.3%. 

[tpfkaw]

1.9%, 2.6%.

[Southern Senator North Carolina Yankee]

2.5% and 3.2%

Unemployement is between 7.9% and 8.5% in December 2012.

[tsx1968]

2.2% and 3.1%

[Skill and Chance]

One of these two scenarios:

2011: 6.3%, 2012: 8.2%

Or

2011: -0.2%, 2012: -3.5%

 

[Mr.Phips]

One of these two scenarios:

2011: 6.3%, 2012: 8.2%

Or

2011: -0.2%, 2012: -3.5%

 

That certainly explains your unemployment predictions.

[Skill and Chance]

One of these two scenarios:

2011: 6.3%, 2012: 8.2%

Or

2011: -0.2%, 2012: -3.5%

 

My 2012 estimate might be bordering on unreasonable, but the general theme is that I am going for a subdued version of 1934-36 in my optimistic prediction.  The recovery would include a period that is basically the inverse of 9/2008-9/2009 in employment statistics. 

The pessimistic prediction assumes a double-dip recession, of 1937-38 proportions.  Conditions in 2012 would be worse than any in living memory if this happened. 

That certainly explains your unemployment predictions.

[opebo]

Isn't a long term 0-1% Japanese style growth situation virtually inevitable now due to the deflation and the lack of any attempt at any government action?

[Beet]

Japan has other problems than just the bursting of a bubble- the number of startups there is abnormally low, the business culture is too conservative, and its too hard for foreign companies to break into certain domestic markets. Besides, the US's higher population growth rate virtually guarantees a higher GDP growth rate than Japan, even if we're just as bad in every other way.

[opebo]

Japan has other problems than just the bursting of a bubble- the number of startups there is abnormally low, the business culture is too conservative, and its too hard for foreign companies to break into certain domestic markets. Besides, the US's higher population growth rate virtually guarantees a higher GDP growth rate than Japan, even if we're just as bad in every other way.

Yes, maybe we get 1-2% instead of 0-1%.

[Southern Senator North Carolina Yankee]

Well our bubble was no where near as big and neither was it growing for so long as Japans.

Japans economic policies are the epitome of stupidy and counterproductivity.

It should also be know that Japan did everything the US didn't to the extreme

Japan
1. Encouraged Savings
2. Discourage Residential Investment
3. Regulated their banking sector to the max (Glass Steagal to the tenth power)
4. Ridiculously high tax on Dividends (70 some %)
5. Constant intervention to prop up prices, even stock prices
6. Lack of productivity growth in the domestic "real" (non-financial) economy.


Yet this produced a bubble of larger proportions then ours across many different asset categories. Companies could sell subsidiaries in Japan for several times the value of the parent company in the US. A cautionary tale to those who thing that all we need to do is regulate the banks as much as possible. Especially the Glass Steagal mongers who think that if we only didn't repeal that we wouldn't have had our financial crisis. Regulate them where needed and no more. Encourage Savings to keep it from hitting 0% like it did in 2005 in the US but don't prop it up to extreme and unheathy levels, discourage Residential investment but only to the point that it drops the annual price increases to 2-3% to avoid bubble formation with higher home value growth.

Japan does have an effective Education system but a horrible population growth rate. The US has a horrible education system but a good population growth rate.

Beet is right, Japan is a culture that smoothers change and innovation. A similar thing existed in Britain in the late 1800's which made the US and Germany's job of eclipsing them so much easier. If the Businessmen aren't imaginative, bold and agreessive enough, it is never a good thing. China surpassing them is reflective of the US and Germany passing Britain in the 1880's in so many ways.

Japan has other problems than just the bursting of a bubble- the number of startups there is abnormally low, the business culture is too conservative, and its too hard for foreign companies to break into certain domestic markets. Besides, the US's higher population growth rate virtually guarantees a higher GDP growth rate than Japan, even if we're just as bad in every other way.

Yes, maybe we get 1-2% instead of 0-1%.

The US really doesn't have that many non-cyclical economical problems beyond a declining Education system and an increasingly substandard set of workers because of it, and long term debt problems (which every OECD country faces). The tax code could use an overhaul, some of our business regulations need changing ( in both directions, some less, some more). We could do more to encourage technology growth by tax policies encouraging R&D investments and reducing red tape in the patenting process. We need to focus on increasing energy production (of all kinds) and we need to reform the education system (new curricula, new techniques, and new tests, the old ones are really not that different then ones used decades ago and need significant change. The Standardize tests just measure those outdate curriculums and techniques and need to be changed to measure the new ones).

[opebo]

The US really doesn't have that many non-cyclical economical problems beyond a declining Education system and an increasingly substandard set of workers because of it, and long term debt problems (which every OECD country faces).

Actually the long term debt problems could be dealt with easily by increasing taxes on the upper income people, and as for the education system the only problem is we fail to require companies to train their own serfs, like Germany does through the apprentice system.

[Southern Senator North Carolina Yankee]

The US really doesn't have that many non-cyclical economical problems beyond a declining Education system and an increasingly substandard set of workers because of it, and long term debt problems (which every OECD country faces).

Actually the long term debt problems could be dealt with easily by increasing taxes on the upper income people, and as for the education system the only problem is we fail to require companies to train their own serfs, like Germany does through the apprentice system.

Nonesense!!!

I thing that is in an interesting idea that we should consider, but we would be ridiculous to assume that is the only problem as K-12 is collapsing.


Just taxing upper income will not solve the debt problem. Taxing something just takes money out of the system. Of course your ideas for spending it are unrealistic and never going to happen.