tag:blogger.com,1999:blog-3778681678950894154.post7402377573594962073..comments2016-10-28T13:17:37.425-08:00Comments on A Tuppence Worth of Steam: The Dismal ScienceAunt Foggyhttp://www.blogger.com/profile/09822854807566491775noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3778681678950894154.post-63370517249569059872012-10-26T15:28:32.580-08:002012-10-26T15:28:32.580-08:00As a practitioner of the Dismal Science (though I ...As a practitioner of the Dismal Science (though I disagree with Carlyle that the subject deserves the sobriquet - "Realistic Science" might be a better term, as many of the important insights are really little more than efforts toward having politicians and citizens alike to face the unavoidable tradeoffs in life), I don't find the subject boring - though God knows almost everyone else does.<br /><br />The conventional wisdom is that the middle class has had a hard time of it over the past n years. I'm not sure that's true. Forget the recent past - say, 2006 to the present - and look at the growth of the middle class over the past, say, thirty or forty years. There's more of us, enjoying higher (real) incomes, and enjoying a higher standard of living than previous generations.<br /><br />Of course, the past half-decade or more has been tough. The recession was deep, and this recovery has been terrible by historical standards. Reasonable people can disagree about why. It's clear that the President inherited a difficult situation, but it's not clear that he made it better. <br /><br />Here's a Dismal prediction for you, though: no matter who is in the White House for the next four years, things won't really get much better. Some policies will be better than others, but we need to get used to having less than we used to. There are a lot of reasons for this, but consider two: first, the government made unsustainable promises to citizens - Social Security, Medicare. For years, a growing population and increasing productivity masked this, but now the working-age population isn't increasing rapidly and productivity gains have leveled off. Our parents were able to consume more than they otherwise would have been because they could rely on a comfortable retirement, paid for partly by their own contributions but paid for in large part by the next generation. Similarly, in the past decade, government deficits have been out of control. (Again, you can argue that some deficit spending was better than others, but it's clear that these deficits can't be sustained forever. Just wait until interest rates go up - the payments on the debt will skyrocket.) That's allowed generous transfers and significant spending on government programs to continue even while tax rates went down, with the same result: people got to consume more than they can in the future. <br /><br />I see a tough future for the country. And that's a prediction I would be delighted to be wrong about.Rhianon Jamesonhttps://www.blogger.com/profile/13627163137265856251noreply@blogger.com