Just one question where did you find these datas ? BEA ? Bureau of labor statistics ? May I have an internet link ?

Thanks

Samuelson said it was the stock market (not economists) that had predicted 9 out of the last 5 recessions.

I couldn’t agree more, the early 60’s and the mid to late 90’s were both great times for the U.S. Economy. From the 60’s through the early 80’s thing became progressively worse, then made a dramatic change of direction. The three recessions up to 82 were progressively deeper and the recoveries shorter - the opposite was true after ‘82.

40’s - early 60s Strong growth / rising prosperity ended at post dep. peak.
60’s - early 80’s week growth / falling prosperity ended in worst modern recession.
80’s - early 00’s strong growth….

Policy 40′-60’s helpful policy’s, building infrastructure….
60’s - 80’s harmful policies - fed & tax & reg policies to manage the economy.
80’s - 00’s - Little effect from policy, (though I agree the Fed caused problems with high rates in the early 90’s and low rates in the late 90’s - should have stayed neutral.)

What I meant by unwelcome profit (and his sentiments were ridiculed at the time) was his prediction “I have an uncomfortable feeling this prosperity isn’t something on which we can hang our hopes for the future.”

Over the next 15 years policy continued down the path he opposed and the consequences were as predicted.

I agree 25 years ago We made a sea change in policy and the direction of the economy. But I think have been reversing course over the past 5 - 10 years and fear the tide has turned toward more regulation and activist fed policy.

FWIW, I went and looked through the BLS site… Some puzzling things — at least to me.

It looks like the total job growth since the pre-recession peak (NSA) has been only 86,000. Seasonally adjusted, it is 2.2 million (what’s up with *that* discrepancy?).

Now, government — all government — has added 1 million (NSA). Seasonally adjusted, BLS says it’s 979,000.

It appears, however, that private sector growth has been much more than half since the turnaround in 2003. From the bottom of paryolls, the entire economy has added (NSA) 5 million jobs. Of that, just 1.8 million are government jobs. The government share is worse if you use seasonally adjusted figures (313,000 out of 4.99 million).

What I really can’t figure out is that federal government payrolls seem to have shrunk — whether SA or NSA. That is not what I was expecting, given the war and other military spending, etc., etc.

Explanations…? Comments…?

Military Side: Vietnam in the seventies, Iraq today.
Industrial side: - buildup for WW2, Mid 1980’s

If taxes remain the same and we spend the same amount of money:

Military operations: When we spend money on operations it is a drag on the economy. The money and manpower is mostly spent overseas and does not create economic value.

Industrial side - When the money is going to purchase hardware from manufacturers it adds to growth and employment. We also get a good chunk back in income taxes, and end up with more Assets”

For what it’s worth the traditional premise has emphasized the importance of tax revenue as a % of GDP, the higher % of gdp taken by taxes, the lower the growth of the economy.

The % of gdp going to taxes grew from 1960 - the early 80’s as growth slowed and unemployment steadily rose. It began to fall at the same time growth and employment rise (Chicken or the egg?)

The unwelcome profit:
“I have spent most of my life as a Democrat. I recently have seen fit to follow another course. I believe that the issues confronting us cross party lines. Now, one side in this campaign has been telling us that the issues of this election are the maintenance of peace and prosperity. The line has been used, “We’ve never had it so good.”
But I have an uncomfortable feeling that this prosperity isn’t something on which we can base our hopes for the future. No nation in history has ever survived a tax burden that reached a third of its national income. Today, 37 cents out of every dollar earned in this country is the tax collector’s share, ”
Ronald Reagan - 1964.

I wonder what the trend is? Has the private sector picked up? You do say it’s half of the jobs since the recession ended. I wonder about the past six months? The past three…?

Also, you make a great point about the military-industrial complex — e.g. Lockheed, Halliburton — where jobs count as private, but are utterly dependent on government spending. Would be great to have more data on that. I know we might try to grab them piecemeal (i.e. check the workforce numbers for big, publicly-trade companies), and that might shine a light, but as they say, the plural of anecdote is not data…

And so on — I am very curious about government contribution to our supposedly robust job growth…

I haven’t done it yet, but I will go to the BLS site and see if I can parse any of this (but I am notoriously slow, not to mention lazy, so if anyone has this stuff, I wouldn’t mind having it spoon-fed!!).

Oh — on a different point. I know we think the government can’t use deficit spending when it’s running a deficit at 3 percent of GDP. But if there *is* a deep recession, what would hold it back? There should would be political incentive to spend, spend, spend. Yes, you’d have to cope with the effect on the dollar and interest rates… Any chance that a global slowdown would level the playing field…?