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Archive for February, 2009

Economists like to measure the health of an economy by looking at growth.  But is there a point where we will simply have enough stuff, and the real human utility of additional industrial production will be zero?  Perhaps the current economic crisis a reflection, in part, of a world in which demand for more goods and services has faltered for the best of reasons – many people simply have enough.   The job losses and foreclosures of today may be an unintended by-product of an economic system that depends on continuous growth for stability, and has not yet adapted to finite demand.

Some economists are preparing Americans for a reset – a step back to lower asset values, perhaps a lower standard of living, and then a return to more moderate growth rates, fueled less vigorously by excessive leverage.  Perhaps instead they should be preparing for an economic system that will be healthy and stable as economic growth approaches a natural limit.

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