Growth, this is what it’s all about. Grow your business, grow the economy, grow grow grow. I get it, it “would” solve all sorts of problems wouldn’t it. Growth would “trickle” all over the place and spread the wealth around. Jobs would be created, incomes would expand allowing greater consumption, earnings would flow to corporations thus boosting their stock prices and allowing the “wealth effect” to work its magic. Tax revenues to the Treasury would skyrocket and the national debt might even get paid down.
We supposedly have 2 percent growth in our economy now, but you must remember that the $1 trillion plus in federal deficit is also counted as “growth,” without the deficit which was roughly 8% of the economy last fiscal year, we in fact would have contracted some 6% and this is assuming that the “deflator” number is correct (which it isn’t). This sleight of hand has been true and even larger than last year in the previous 3 years.
Growth in anything whether it be an economy, a population, a company, sales or even a tree however is finite. Nothing can grow forever and thus the old saying that “trees don’t grow to the sky.” The stock market cannot “grow” forever at a 10% rate if the underlying economy has a max growth rate of 4%. No one nor government can “borrow” forever at an ever growing rate. Neither can any “lender” lend forever at an ever growing pace. Yet this is exactly what everyone wants AND “believes” (wants to believe) is possible.
We are now facing these realities. The stock market is exactly where it was 12 years ago. Housing prices on average are where they were 8 or 10 years ago. Our banking system has been hollowed out and its collateral decayed. Our state and federal treasuries have borrowed themselves into insolvency. Corporations have cut jobs and anything else not nailed down to “make” their quarterly earnings, they are working on the bone marrow now. Many individuals have lost their houses, gone bankrupt, collected all of the unemployment insurance available and eat off of food stamps. In fact, a recent report shows that 40% of Americans do not even have $500 saved up to fall back on:
So while we have “grown”, we have gotten weaker.
My point is this, we have lived the “portrayal” of growth, not REAL growth for quite some time. This “growth” has gone on for at least 30 years since the early 80’s, we levered up everything, everywhere. We cut jobs and automated everywhere possible. We replaced industry with “profits” gained from shuffling papers, trading other pieces of paper and printing more paper as the original paper either devalued or defaulted. These were all easy ways to portray “growth in the immediate” but in reality was only accelerating current growth by pulling growth forward and robbing from the future. We have arrived at the “future”.
You all know that I believe a “re set” must occur. A re set would also allow for “growth”, REAL GROWTH. We would be starting from a “lower” level where it would be easier to actually grow and without the necessity to massage, fudge and outright fake the important economic numbers. “Growing” in a fiat system is “statistically” as easy as pie, all you need to do is expand the money supply, depress your currency and presto, GROWTH. The problem is that when you do this for a long period of time the population will eventually begin to realize that they are not better off than they were 10 or 20 years ago…and that’s exactly where we are today.