Friday, September 28, 2018

What is preventing the USA from becoming a 40 trillion dollar economy?

What is preventing the USA from becoming a 40 trillion-dollar economy? This caption is deliberately provocative but not unrealistic.

The USA is gifted with mighty intellectuals, renowned educational institutions, noble laureates like Paul Krugman, numerous think tanks. Why should the economy grow at 2% or 4%? Why GDP cannot grow at 10% Or 15% ?

Paul Krugman's prescription of government spending to boost economy and jobs doesn’t work in reality.
All the recipes for economic growth and jobs  creation like: government spending, low interest rates, controlling money supply, and controlling inflation has been tried without much success.
The United States did reasonably well when the economy had robust manufacturing till 1970-71.
When the US economy ignored manufacturing in the name of globalisation, and started listening to investment bankers, bankers, financial institutions and select economists jobs became scarce, stock markets flourished,& investment bankers prospered.

Economic prescriptions need a revisit. The present state of economic prescriptions stifles the very economy it wants to stimulate. The USA has to generate out of the box economic prescriptions to grow its economy to become a 40 trillion-dollar economy.



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