'Why Must The Economy Always Expand To Survive?'
By Malcolm Hedges (07/31/08)
A rather simplistic answer might be 'To provide employment for the expanding workforce'.
So if the workforce population expands by 2% each year the economy must expand by some 2%+ each year (allowing for increased productivity) in order to have enough jobs to maintain a ~5% unemployment rate.
An unemployment rate lower than 5% is considered not good for the economy.
As immigration: illegal and legal has exploded, the population growth has accelerated. This puts more pressure on the need for economic expansion.
Some relief is provided by retirements, but that stresses the Social Security and health provider systems.
When the economy expands, the result must be a need for more workers or it is of no practical value. An economy expanding on paper due to inflation is not really expanding.
An economy that keeps unemployment figures low by being loaded with expanding government employment is artificial and actually declining. Government produces nothing and is never much more than maybe 70% efficient (probably generally less).
I suggest that an unwritten rule is that economic expansion is also needed to fund never ending expansion of government waste!
If the economy fails to expand properly, the government is put under great pressure to shrink and that is unthinkable. Since the government will not adjust to economic conditions, the general populace becomes the scapegoat and is subjected to severe denials of basic needs such as energy and food.
Should by some miracle the government be convinced to adapt to economic conditions, I would suggest the need for constant economic expansion would significantly decrease. At this time the government inhales some 20% of the GNP and not a lot of that money wanders back into the economy.
The never ending explosion of immigration that is encouraged on all levels by the government and contributes to the issue.
The US needs a reasonable level of legal immigration to satisfy specific employment needs. Additionally controlled and appropriate immigration is a political and social tradition that has always served us well in the past.
With everything considered in the current mix, if the economy fails to expand the general populace is in for hard times.
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