Economy Continues To Accelerate

THE NEWS CAME OUT TODAY THAT THE ECONOMY GREW IN THE SECOND QUARTER AT A HEALTHY RATE OF 2.4%.

But that is not what you will read in the media propaganda that passes for news.

July 30 (Bloomberg) -- The U.S. economy slowed in the second quarter as a scarcity of jobs eroded consumer spending, leaving the rebound dependent on a surge in business investment.

They call this a slowdown. They say the "economy slowed."
Not so. If I am going 50 MPH and then 60 MPH and then 61 MPH. I am not slowing. I am still accelerating. The rate of acceleration has slowed, but the economy is going faster and faster.

Words make reality. Let us speak the truth.

Slack Is Good

Take it easy
Lighten up
Simplify

We are living in the slack economy now and it is good.
More leisure, no shortages of food or housing.
People still seem to think they are entitled to jobs. Not so.
If you really want a job or need a job then you must do what it takes.
Truth is, most don't really want work, just money.

So here we are in the midst of abundance. We have more than we need. It is a good world.

Long Live The Slack Economy

History Teaches Whole Civilizations Can Collapse

Maybe that is a fallacious concept.
What really happened to Rome or Athens? They did not disappear completely. But there are some civilizations that really did disappear. What comes to mind are the civilizations in the New World, Mayan, Aztec etc. And tribes disappear or go extinct.

But my thought is that a big civilization, like modern America, might collapse or disappear but that it would take hundreds of years. So the idea that things are going to collapse at any moment is fallacious.

Big changes can happen rapidly to smaller systems. Consider the recent bankruptcies of blue chip companies like General Motors. But GM is not gone. It just got restructured.

Watch out for the future.
Many systems are looking fragile. Which will survive? Which will make the changes before catastrophe hits?

Take Care No Blame

Take care of your animal

Don't blame the economy

What do I mean?

Are you an animal? Or is only your body an animal?
Your body is your animal. Take good care of your animal. Love your animal.

Don't blame the environment. Just take the best care you can.

USA Per Capita GDP Hits All Time High in 2010

This is a prediction.
And it looks very likely.
2009 per capita GDP was only .5% lower than the peak of 2008. (LOWER BY ONE HALF OF ONE PERCENT)
It won't take much to surpass 2008 this year.

But you probably won't hear this in the news.
And even if you do. They will put a negative spin on it.

If Democrats would like to hold congress, they should start telling how good the economy is. But I doubt they will do it because it goes against their grain.

Expectations Lead To Gloom

Saw this headline
"WHY GLOOM ON ECONOMY PERSISTS"

It is all about expectations.
If you expect a dollar and you get 80 cents then you are disappointed and gloomy. Whenever reality falls short of expectations people tend to feel bad. If you expect a dollar and get two then you might fell pretty good.

People are expecting too much. They are unrealistic. They almost always expect too much and are habitually disappointed.

Lower expectations and happiness should increase.
Or get rid of expectations completely. Expect nothing and be happy with what comes.
Each moment is sufficient.

Problem With Government Revenue

It is generally thought that government spending is counter-cyclical. That is, when the economy slows down tax revenues go down and government spending goes up. This is thought to be a good thing because it takes up some of the slack in the economy. For example, the public is borrowing less lately and the government is borrowing more.

But there are big problems with this approach and the problems are filling the headlines. All over the world governments have already taken on enormous debt even while economies were healthy. Now that there is a recession the government sectors are looking like economy killers rather than healers.

I see two main problem areas with government debt.
Interest on this debt is becoming very large.
Government spending is less efficient than private spending.

Solution

Change gears

Assumptions about economic growth have been made that are very false. Economies cannot grow as rapidly as has been thought without creating inflation or bubbles. Maximum good growth is probably only 1% to 2%, not 4% to 5%.
The natural rate of unemployment is higher than we are told. It is closer to 8% than to %5.
When governments make budgets they need to plan for less growth and higher unemployment and have balanced budgets at those lower levels. Trying to get back the bubble economy of the last 50 years is very foolish and counterproductive and will continue to give bad results.