Your point about new technology replacing old is valid. But as long as the increased productivity from the new technology outweighs the lost productivity on the replaced technology, the economy will grow.
The point made in my earlier post was that over the last twenty years, in spite of the technology boom and the internet, there was not much growth in in the GDP when discounted for inflation. What we had was growth in some sectors but offsetting retraction in others, such as manufacturing. I wish I could be as optimistic as you, but it seems to me the US economy is maturing and that future growth in GDP will, after correcting for inflation, be less, or at least no more, than past growth. In other words I would expect the US to remain on roughly the same path it has been on. See http://www.shadowstats.com/alternate_data and also, http://www.shadowstats.com/article/gross_domestic_product
Where are the facts to back up these productivity claims? Some just want to believe stocks will always go up. Wall street has a certain amount of fools brainwashed. The real truth is you can believe what you want to but that does not change the facts. The facts are even if you manage to get more cash in your pockets you will lose purchasing power as you walk down the street to the retail store to purchase some goods because the value of your money is going down the toilet. In 1965 a brand new car loaded up with all the toys cost about 4 grand. Today that same car will cost about 40 grand. And least we not forget .........even if there were REAL productivity increase, in this day and age where the workers have been castrated there is no economic improvement to speak of. The profits are not shared with the folks on the factory floor. Productivity increases are another myth for the sheepie to believe. :eek: http://en.wikipedia.org/wiki/Purchasing_power_parity
Productivity is about how much time and energy must be invested in the accomplishment of a given task. A single individual human living today can get a hell of a lot more done with less of an investment of their time and energy than 20 years ago, or 30, or 50, or whatever. This is self-evident. That being said, the point about the US being a relatively mature economy is, I think, spot on. And most of the growth seems destined to come where things aren't done nearly as efficiently already. Namely, the emerging markets. This should be no surprise.
I don't think this is self-evident. Or even accurate in all respects, only some. For example, people are not as healthy and active physically and spend way more hours wasting time on the internet, watching TV, slogging through IT issues, answering annoying e-mails. How much of this effort translates into actual economic productivity is debatable, especially when compared to hard-working manufacturing or farming folks from 50 years ago. It is not actual tangible productivity, but rather derivative productivity - just like our economy. That is the illusion of growth I am referring to.
There is a point of diminishing returns when it comes to productivity. A mature economy such as ours reaps increased productivity in terms of more free time for people as they have done all there is to do absent new industries to spend time in. There is a significant part of our workforce that is employable only in Bubble conditions and thus a new one MUST be created. Technology (increased productivity) has achieved much of what it's core goal is: to eliminate the human from the equation through the promise of greater profits and convenience. Wall street loves difficult to measure factors such as productivity as it is nearly impossible to question, just as the Dot_coms were.
Random.Capital Registered: Jan 2005 Posts: 1536 09-18-09 11:00 PM -------------------------------------------------------------------------------- Quote from retire45: There is a point of diminishing returns when it comes to productivity. -------------------------------------------------------------------------------- When <10% of the population is needed to generate 150% of the food, you're pretty much there. BINGO!!!!! Like the other poster said..........We are a mature country now. Increased productivity could be better measured to show factual improvements in a country like Haiti or some other 3rd world spot. Discussing productivity in a mature developed country like the USA is symantics because Brettman refuses to talk about the decline of the USA which is not his bag. I am a realist and call them as i see them. Fact: the USA is a declining economic power, DEAL WITH IT. Productivity increase or decrease nunmbers for the USA is a bs data point.
Bighog, I am not challenge what you say, I want to ask a question. Is USA declining, or other countrys becoming more productive, so in the whole world picture the USA is not wealthy as before (only compared to the world) but is still a wealthy country?