It's not impossible that we will look back in 20 years and see Japan not as some sort of failure but simply as the first society that had to learn to live without growth.
Naturally it is growth per capita which matters as this is what improves the living conditions of people. There are many countries with high GDP growth but which also has higher population growth causing everybody actually to get poorer. That is not something anybody should want to emulate.
But of course low total GDP growth looks bad to business because the markets for their goods does not expand.
Japan was the "bad guy" in 1990, they had a lot incentive to downplay their position in subsequent years.
[ dang, is that you? chill, dude ]
Eventually that large budget deficit versus GDP (nearly triple the US) combined over the years with even more taxation just sucks the life out of an economy. Throw in a shrinking population and an adverse look at immigrants and its not fun.
So you have their central bank playing with the quantitative easing game for nearly ten years and not getting anywhere. This is mostly because government is borrowing all the money leaving corporate investment to occur mostly as a product of spending their own profits.
Japan is simply proof government cannot buy its way out of a problem, they have been trying for years. Classic money trap that certain economist love to ignore or worse claim the opposite by saying if they just went further, spent more... etc etc.
Oh well, China is similar but the US is too, the difference is the US has quite a bit of immigration to take jobs the locals won't
Overall GDP growth is needed because it's the fundamental assumption behind both government and private debt.
The US has both had population growth and anemic growth since 2008. So it's not all population bust.
The piece that many miss when discussing Japan's high quality of life despite lack of growth is that in order to maintain 0% growth over the last 20 years, the central government had to borrow and spend nearly 10% of GDP every single year.
I agree, we're not talking about an external default, but monetization is still likely to severely impact the wealth of the middle class.
What if capital loses its value and no longer earns interest? You can't say its not happening, when central banks are charging interest on capital.
I should've expounded! My apologies!
They still haven't learned, they're trying really really hard to force growth. Negative interest rates can be seen as a tax on inactivity, and while it's been talked about in the US, I think it comes too close to taxing assets for the rich to embrace it.
What's wrong with taxing assets (wealth)? I don't know the full economic implications, but I think it may be more fair than taxing income. Wealth is a much better measure of a person's financial strength. Consider:
* Because we tax income, a person with $1 billion in assets who makes $100,000 pays less tax than a person with $0 assets and makes $150,000.
* Because we tax income, a person who loses all their assets in the housing collapse but earns $100,000 pays more tax than the person whose assets appreciate $1 million but earns only $50,000 in income.
* If we tax wealth, future taxes are much more predictable, enabling more efficient long-term investment and planning. I could make a pretty good guess about what my tax bill will be next year, 5 years from now, etc. The billionaire can make much longer-term projections.
As a rough estimate of the wealth tax rate: One estimate of total wealth in the US is $80 trillion and the federal government takes in ~$3 trillion in revenue. By those numbers, the wealth tax rate would be 3.75% for the average American, if all that revenue were replaced by a wealth tax.
Also, one unintended consequence of this policy would be that the MINIMUM interest rate you would have to pay would be 3.75% because below that it makes more sense to just buy a gold bar and bury it in the backyard vs. lend it out.
Basically, the way you can imagine the impact of that is that your mortgage interest would (today) essentially double. Again, no thanks.
I don't quite follow. I have to pay a tax of 3.75% of the gold bar's value whether I keep it or lend it. Even if I only can lend it at 2%, that's still better than nothing.
Do you really want to require someone to sell 3.75% of their stake in a start-up every year so they can pay the taxes on it?
Yes. That's one of the many expected results.
i don't think that a person should be able to give things, after their death, tax free, to their children, with no limitations. i don't think the right to give gifts as you please trumps the right of newborns to a fairer playing field. i think both rights deserve consideration, but i don't think the former is anywhere near absolute. kids should have to earn a living, and shouldn't get huge financial advantages solely because of who they're born to.
besides, if you transfer gifts while you're alive, you're not subject to such high taxes, right? and only gifts over a certain threshold from person to person get taxed anyway, right? if you don't trust your kids to not take the money and run while you're alive, maybe they don't deserve it. i don't think society gets to let you have your cake and eat it too, in terms of both passing on wealth through your bloodline and staying secure yourself. i understand that sort of lineage building is a pretty basic human desire, but there are lots of basic human desires that society doesn't indulge, let alone bankroll.
also, it's not like steep inheritance taxes kick in unless the inheritance is of a decent size.
in the spirit of full disclosure, i don't expect to get any sort of appreciable inheritance, so i'm biased by not having anything to lose here. but this is a thing that seems quite obvious to me, and has seemed obvious for a long time now.
do you happen to know why that's the case? for example, that wiki entry says sweden abolished the inheritance tax in 2005 (retroactive to 2004). was the motivation that it was unnecessary? did constituents complain about its existence?
Why can't we just have...enough? Why don't we create things that last decades instead of years? We can scale down, consume less, pollute less. We could have fewer factories that produce higher quality products. We could pay people more. We could have a minimum income so we'd get more art and entertainment instead of useless plastic shit.
It's not possible because our current heavily capitalistic world view is ingrained so deeply in the minds of everyone in high income countries.
I've mentioned it before, but Debt: The First 5,000 Years is an incredible book that goes into the history of money, debt and slavery. It's a life-changing book.
I'm not sure if that example is exactly equivalent to breaking windows and paying people to fix them (for example, maybe it matters a great deal for his view that it's the government which is paying for the demand stimulus).
Yes, I would agree that implementing a basic income is not a problem of technical feasibility or lack of resources but a problem of user buy in. I've read at least half of Graeber's book Debt: The First 5000 Years, pretty interesting stuff which points out some of the false assumptions at the heart of the mainstream sociopolitical game. For anyone interested, here is the pdf version:
It will definitely change the way you view "debt" which is such an ambiguous term in this day and age of trillion dollar debts.
Even without growth, you have a lot of social mobility -- downwards as well as upwards.
Surely Europe between, say 1760 and 1900 looks different than China in the same period. Perhaps 100 years from now, it will be decided that the Chinese Mandarins were right after all , but that's not consistent with how we look at the world today.
And given some of the posts I've seen here, maybe it will be like that. You didn't have to explain why growth was of value 20 years ago - outside a few odd cases, it was assumed.
There's a disconnect between how economists use certain terms as well-defined technical jargon and how non-economists adopt them colloquially. This leads to a lot of confusion when people try to discuss economics without understanding the precise meanings of the terms at play.
For the rest of this comment, I'm going to use the economic meaning of these terms, because there is agreement among economists about what "growth" means (though not how to accomplish it).
> Or do we give up the expectancy of a better life for everyone if we give up economic growth as we know it?
Yes, by definition. It would be impossible to have "a better life for everyone" without economic growth. "A better life for everyone" is economic growth, by definition (the creation of more value - whether tangible or not - given access to the same limited input resources).
> Is is possible to have increased leisure/increased standard of living/increased health/decreasing cost of living over time
That is considered "growth" to an economist, yes.
> without having an incerase in GDP and an average positive return on capital?
In theory, yes, but it turns out that an increase in GDP is so highly correlated with economic growth empirically, as well as so intrinsically linked from first principles, that they are usually used interchangeably in most discussions.
There are a few degenerate cases in which an increase in GDP does not actually correspond to economic growth, but they're pretty esoteric and not broadly applicable.
 As an analogy, imagine a bunch of non-programmers debating a CS paper about 'complexity' of an algorithm, and using the term 'complexity' to mean by their ability to understand how it works. That may be a relevant metric, and it may even be related to the technical use of the term 'complexity' (complexity class), but it's not really comparing apples to apples even though it's using the same word.
But GDP only measures value that gets traded for money, not all value created. For example, if I care for my child at home for free, I'm creating value that isn't measured in the GDP. If instead I send my child to a child care facility, that is measured.
Can you go in to this more - for example I have a better life now on half the wage I had before, less means but more of the non-material blessings of life (time with family primarily). It seems if there was wide scale emulation of this that outputs in the [UK] financial system would decline but happiness/fulfilment would increase.
>That is considered "growth" to an economist, yes. //
Is there a name given to such metric generally? If GDP goes down but leisure time increases and leads a increase in health (and reduced health spending) then generally economists would refer to that as "economic growth"?
So in other words, zero growth is very likely something we do not want, unless it happens to come with positive benefits that are currently not measured in dollars -- e.g. sufficiently strongly reduced long-term demand for fossil fuels that climate change will have a much smaller negative impact on people's well-being.
My guess is a very emphatic yes. GDP goes up in a traffic jam; there's such a thing as "bad GDP" as well as "good GDP".