I've been thinking along these lines, recently, though I never thought to describe the phase the United States is in right now as a "secular decline." I see both secular and international dimensions to the current malaise. So I found this blog entry (from Krugman's post on new thinking at the IMF) interesting (though I disagree with the allegation of harmful effects of allegedly existing "US welfare policies"). Below is post by Jake Wagner of Santa Barbara, CA):
In the past, the IMF imposed fiscal discipline on third world countries.
Now economists such as Krugman argue that fiscal discipline, austerity if you will, is not needed, for the US. He cites Keynesian ideas which are absolutely valid in the mathematical models as mechanisms for mitigating the business cycle. But the US is in secular decline and Keynesian policies are irrelevant for that.
What the US needs is first of all to cut its population growth to zero. It is better to do this through policy than to pretend we are offering our citizens freedom by encouraging them to have larger families than they can support. And the US welfare policies do just that.
Second, the US needs to raise taxes on the wealthy and use the proceeds to create jobs in education, in infrastructure construction, in government-sponsored research projects like NASA.
It's really simple: create government jobs to ease unemployment, raise taxes and control population growth.
In the past, the IMF imposed fiscal discipline on third world countries.
Now economists such as Krugman argue that fiscal discipline, austerity if you will, is not needed, for the US. He cites Keynesian ideas which are absolutely valid in the mathematical models as mechanisms for mitigating the business cycle. But the US is in secular decline and Keynesian policies are irrelevant for that.
What the US needs is first of all to cut its population growth to zero. It is better to do this through policy than to pretend we are offering our citizens freedom by encouraging them to have larger families than they can support. And the US welfare policies do just that.
Second, the US needs to raise taxes on the wealthy and use the proceeds to create jobs in education, in infrastructure construction, in government-sponsored research projects like NASA.
It's really simple: create government jobs to ease unemployment, raise taxes and control population growth.
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