Well, so what, where’s the tragedy? The US GDP is over $13 trillion. There are 300 million people. That’s over $40,000 for every man, woman and child in the country, $160,000 for a family of four.
OK, but a lot of it is probably junk, waste – useless weapons, bureaucracy, etc. How much of it is good stuff consumed inside the country, or something that can be exchanged for good stuff? Let us be conservative and say – about a half. Well, that’s still a lot – $20K per capita, $80K for a family of four, certainly enough to live comfortably. And 2% up or down doesn’t make much difference.
So, the problem is not the size of the economy, but the way the stuff is distributed in this economy. Moreover, I don’t think there would’ve been any shrinkage if it was distributed in a more reasonable fashion. The whole economic theory is based on some sort of chain reaction model – more jobs -> more demand -> more jobs -> etc., or fewer jobs -> less demand -> fewer jobs -> etc. This is not a good model; just not a good design.
I know, these are, of course, obvious things, stated a million times already; hailed, refuted, hailed again, refuted again. Nevertheless.
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Arguably…we should be SHRINKING the economy somewhat significantly. Although I honestly don’t believe that if every american (or first world resident) suddenly drives a Prius and has solar panels that the planet will be “saved” Just too many of us, merrily consuming and procreating away. (Love your site, by the way)
Thanks, and I agree. More reasonable distribution of what the economy produces would definitely cause the economy to shrink (at least initially), as most of its growth seems to have been going for a few decades into turning millionaires into billionaires.