Comments on: The holy grail of high growth with low spending A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Rockfish Wed, 30 Jun 2010 13:30:28 +0000 Ah yes, the old “politically difficult.”
So all we need is an entire generation of politically-suicidal elected officials at every level of government in the dozen or so largest global economies? (Except China – semi-benevolent dictatorship has its advantages)
I don’t see any problem with that.

By: yr2009 Mon, 28 Jun 2010 17:06:52 +0000 How about low growth and high spending?
Judging by results so far, it’s a more popular policy, possibly because it’s easier to implement…

By: HBC Sat, 26 Jun 2010 17:45:48 +0000 Not sure whether it’s just bad timing or in worse than customarily poor taste but it ill behooves IMF stentorian evangelists to preach the virtue of budgetary austerity after all they’ve done to abet institutional prodigals in getting theirs first and at no matter what cost to the general populace.

Not until they’ve actually paid the piper with their own money.

By: DanHess Sat, 26 Jun 2010 15:28:25 +0000 Step number one: While in the throes of a fiscal crisis don’t commit to massive new entitlement spending.

Oh, oops.

By: Rikh Sat, 26 Jun 2010 06:46:37 +0000 Only to focus in this situation on GDP growth is imho slightly wrong. It is also real money available for real spending.
1.Main problem will be that probably 60-80% of the population (of the Western world) won’t see much income increases in the next 1 or 2 decades. Their wages are x-times higher than normal if you take the world as a reference. Continuation of outsourcing to developing countries will continue, more people for the same number of jobs, leads to lower wages. Only geographicly non transferable jobs will remain in this part of the labor market. Or in Europe jobs that require people to speak a language that is rather unique and not spoken in the rest of the world(like Danish, or Dutch).
2. Borrowing either as Government or privately is stretched to the max, so there are not many other ways to finance consumption.
3. Because of eg deleveraging structural economic growth of the US will be lower than in pre crisis time, where a lot of the growth was financed with borrowed money.
4. In Europe it will be substantially worse than in the US as they will have to cope with aging as well, which is much less of a problem than in the US. Plus their (unproductive) government sectors are bigger relatively.
5. Main sectors where savings can be made are imho:
-Government (in general a very unproductive sector).
-Healthcare (especially in the US, allthough there it is still mostly private sector and privately financed).
6. To start with healthcare probably a 2 class system is also unavoidable in Europe. Basic one for everybody.
In the US probably some way to get rid of the costs which doesnot provide better healthcare as such, but better service and nicer looking hospitals and insurances and all treatments at the same time starting with the most expensive one.
7. Healthcare won’t be much of a saving anyway it is more keeping cost rises as low as possible.
8. Remains Government spending. If Government would work more efficient likely huge costsavings can be made. As well as looking at efficiency of their laborforce also efficiency of programms.
9. In Europe in general this is probably the only way to give normal people more to spend (through lower taxes) for the next decade or maybe 2.
10. For the US the situation looks slightly better, allthough if successive government continue spending like they did the last decade that advantage might have to be used for debt repayment.