The U.S. May Have to Get Used to Slow Growth

Kevin Mellyn, MSN Money

•  U.S. consumers are now living...like the one the Japanese have been living in for the past 20 years...slow growth, large government deficits, and a rickety banking system
•  The point is, though, that people are adaptable and can learn to cope with a no-growth or slow-growth economy.
• The Japanese have gracefully adapted to a world of slow growth and diminished expectations
• The U.S. economy was driven for more than two decades by an oversize financial sector...The financial sector grew by increasing the availability of consumer credit and lowering its quality
• The real choice is whether to live within your means with a good heart, as the Japanese do, or hope the credit bubble can be reinflated.  

 Comment:

I would agree with the part that says live within your means.  A credit bubble should not be reinflated.   What's needed is a growth driver such as the one that we had in the nineties.  The nineties growth driver was the world wide web.  The new growth driver can be energy.

The current US energy bill is a drain upon the economy.  With hundreds of billions going out each year at ever increasing prices- a reduction in that bill can add much buying power to the wallets of consumers.  Savings rates could also go up, which will aid in paying off the debt.  Besides that, additional risk capital could become available to fund new growth drivers as well.

A second growth driver could be the settlement of space.  Entire new industries could arise from that.  Among these are mining the asteroids for their precious metals, amongst other things.

Finally, the whole idea of reduced expectations is nothing new.  It was also seen during the late seventies.  Supposedly, the US had reached its Limits to Growth.  But those limits were found to be those that were imposed.  Such a thing could be happening again with the emphasis on "sustainable" growth- which is just a code word for no growth at all.  If that mindset can be overcome, and a new pro-growth mindset be substituted in its place, then a new era of rapid growth and progress can be achievable.  If this is not done, US consumers may as well get used to slow growth, because that is what the current policy makers want.