On 5/5/05, Erik Reuter <[EMAIL PROTECTED]> wrote: > > * Robert J. Chassell ([EMAIL PROTECTED]) wrote: > > > Erik Reuter's point does come into play. But I am puzzled by his > > restatement of it on 4 May 2005: > > > > Unfortunately, the overall market is only growing at 6% a year and > > now that the company has monopolized the market and implemented > > most of the cost savings and efficiency improvements possible, > > earnings only grow at 6% a year. The investors who extrapolated > > the 30% per year forward take a bath. Doh! > > > > We are not talking about filling up a market niche, we are talking > > about creating many new niches. > > Please pay attention to what I wrote. The point is that it is foolish > to take a portion of a historical record and extrapolate that portion > over an extended period unless you have evidence that the portion of the > historical record you are extrapolating can be sustained for an extended > period of time. As I wrote, there are a great number of examples where > this is not the case. I gave some examples. > > > Or do you think that the economy > > really is zero sum, and that it is impossible to increase it by much? > > Don't be absurd. Any fool can see the economy is positive sum. It has > been growing about 3% real per year averaged over the past 200 hundred > years. > > > Erik, are you suggesting that median per capta income cannot ever grow > > to be 3.5 times higher than it is now? > > No, of course not. I don't see why this is so difficult. > > You are suggesting that the economy can grow at 5.1% real per year > over an extended period of time if the Democrats were in power for an > extended period of time. This idea is hardly supported by the data you > are using -- you are extrapolating far in excess of the historical data. > > In fact, if you can find a single economist who thinks that a developed > economy can grow at a real 5.1% per year for 70 years, I would be very > surprised. > > > If so, what limits the economy? > > I don't know of a limit on the total GDP, but the growth of GDP is > considered to have a limit by virtually all economists. If productivity > grows at 2% per year and working population grows at 1% per year (and > hours worked per person is constant), then GDP grows at 3% per year. > > What causes productivity growth? Capital deepening (i.e., more machines > per worker, better equipment, etc.) and more skilled (or more efficient) > workers. > > Can the US sustain a 4.1% per year productivity growth rate and a 1% > per year working population growth rate for 70 years if Democrats are > continuously in power? The data cannot answer, since we don't have a > historical record of 70 years of continuous Democrat rule. But it seems > unlikely. No developed country in the world has ever even approached > that high a rate for an extended period of time. Certainly the US hasn't > at any time over the past 200 years, despite the huge advances such as > invention of the railroad, telegraph, electricity, telephone, production > line, automobile, airplane, robot, computer, etc. Over that time the US > averaged only a bit over 3% real GDP growth rate. > > So you are saying the poor performance under GOP leadership is a necessary breather in terms of economic growth?
I wonder how long the Asian tiger record of economic growth can be continued? -- Gary Denton Easter Lemming Blogs http://elemming.blogspot.com http://elemming2.blogspot.com _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
