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Growth opportunities

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  • Mon, Feb 09, 2009 - 08:31pm

    #1

    keelba

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    Growth opportunities

I was having a discussion with my wife the other day and we were discussing the government stimulus. There is no debate that the current administration wants to create jobs, however, does creating jobs alone just for the sake of creating jobs really help anything. My answer is no.

As I heard Fred Thompson say in his sarcastic video about government spending, "we can have one half of the population dig holes and the other half fill them back in". Doing so only makes people busy but does create wealth, it only redistributes it. I believe we must find jobs that help create wealth and that that wealth ultimately comes from the Earth or the Sun. For example, a factory in the U.S. may make chairs. The wood used to make these chairs, however, came from Brazil. Therefore, the wealth came from Brazil. It was then transferred to a factory in the U.S. where the factory used it to pay its employees who used it to buy haircuts, fast food, satellite television, etc. Ultimately the wealth gets diluted into the mainstream, worldwide economy and is transferred back and forth. It was the growth of those trees provided from the Earth and Sun in Brazil that provided the source of the wealth. That country may have chosen to export its supply of wealth at whichever price it chose but that is where it began. Along those same lines, you could argue that the labor to make those chairs, haul them, market them, etc. needed the energy of its workers but those workers ultimately got that energy from the Earth and Sun. So wealth is mined, grown or extracted from the Sun or wind.

Oil is an excellent source of wealth as it represents millions of years of stored energy. That energy can dilute quite a bit and make quite a few people wealthy along the way. It is easy to see this when looking at the middle east. As far as I know, there is not much more wealth producing that comes from the middle east other than oil and they seem to have plenty of wealth. As is pointed out in the Crash Course, it is the <u>surplus</u> of this wealth that allows for growth, prosperity or both.

The Interstate highway system that Eisenhower implemented created many jobs and it allowed for continued growth of the population. But if we were to create a similar job program today that went back and fixed all of those aging roads, that would do nothing for our growth and would be about as beneficial as digging holes and filling them back in. We may have nicer roads and a higher standard of living or prosperity but not growth.

I’d be happy to hear your comments about my ideas but my question really is what types of jobs could the government create to allow for future growth? I believe that our most important opportunities lie in finding, creating and distributing alternative sources of energy and in finding ways of creating and distributing potable water. I think every home and every building in the country should have a small wind generator, solar panels or some other source of energy and solar water heating. I think that desalination plants along our coasts need to be created but I know that they are expensive and require an incredible amount of energy. There are also people working on machines that can extract moisture from the air even in arid climates. I can also see how an improved Internet backbone could benefit our country but the amount wouldn’t be tremendous.

So what other jobs would you like to see created to help spur the growth in our country that we’ve all grown so accustomed to?

  • Mon, Feb 09, 2009 - 09:46pm

    #2

    caroline_culbert

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    Re: Growth opportunities

[quote=keelba]

So what other jobs would you like to see created to help spur the growth in our country that we’ve all grown so accustomed to?

[/quote]

1.  We should not create any jobs while we, the country, has no $$. 

2.  If we, the gov. has a surplus, I still don’t think they should be creating jobs just for the sake of creating jobs.  If they want to "create jobs" secondary to "let’s find more efficiency" then I’m all for it. 

I still think that #1 has to happen before #2 can even be considered.  We, the gov., should not be talking about "creating jobs" right now.  I don’t think it’s the government’s job to create jobs anyway (other than within parliment).

Sorry… just my two cents.

  • Mon, Feb 09, 2009 - 09:46pm

    #3

    keelba

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    Re: Growth opportunities

Caroline, I respect your opinion about the government creating jobs, however, like it or not, they’re going to. So my question is, what kinds of jobs would be the most beneficial to stimulate the growth they’re trying to achieve vs. just creating jobs to put people back to work?

  • Tue, Feb 10, 2009 - 03:51am

    #4

    sofistek

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    Re: Growth opportunities

[quote=keelba]So what other jobs would you like to see created to help spur the growth in our country that we’ve all grown so accustomed to?
[/quote]

Growth is unsustainable. Why would you want to try to spur something that is unsustainable?

  • Tue, Feb 10, 2009 - 03:54am

    #5
    affert

    affert

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    Re: Growth opportunities

I think Keelba makes a very good point.  I would modify the point a little.  The sun and earth provide the building blocks for creating something valuable.  If I import wood from Brazil, hire people to do labor on it, and build chairs that are ugly and uncomfortable, I have not created wealth/value.  In order to create value, I need to take the input resources and make something that is more desirable than the inputs.  It is this difference in value that represents the wealth that is created. The wealth created is the difference between the value you get from doing something minus the value that is lost by doing it (lost resources and time).  

So the government should seek out job opportunities that create more value than they cost.  One thing that I think fits very well into this category is increasing energy efficiency.  The value of increasing the energy efficiency of building  can be fairly easily determined: is the amount of money saved per year greater than the cost of the interest paid on the loan the gov’t had to take out to pay for it?  If the savings are greater than the interest from the project cost, it is a valuable use of money.  We can’t predict energy costs or future interest rates, but I think most people here would agree that both are likely to rise considerably.  

Really, almost any job that allows people in the future to use less resources for the same result will be worthwhile.   Building public transportation.  Helping people build sustainable farms.  

Education is one area where, in principle, it should be a great place to put the money.  However, it is MUCH harder to achieve anything from big ‘throw money at it’ type programs.  Arguably, many of these programs have done more hard than good.  

 

Regarding what Caroline said, I still can’t deciede what I think of the stimulous package.  I am fairly convinced it cannot work.  I am also fairly convinced that it will become law (at least here in the USA).  If there is any chance that we can be saved from a complete colapse (either into a huge depression or a completely authoritarian gov’t) we should not be doing the stimulas package.  Is there any chance of China continueing to fund our debt until we recover enough to start paying it down?  Is there any chance that we actually would start paying it down, should we get the chance?  I’m not convinced we haven’t already passed the point of no return.  And if we have passed that point, we might as well have a stimulas package that builds useful things we can use later.  Far better a gov’t that is wasting money it doesn’t have building roads than a gov’t that is wasting money it doesn’t have giving handouts to rich, well connected bankers so they can keep giving themselves big bonuses.  

  • Tue, Feb 10, 2009 - 04:01am

    #6
    affert

    affert

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    Re: Growth opportunities

[quote=sofistek][quote=keelba]So what other jobs would you like to see created to help spur the growth in our country that we’ve all grown so accustomed to?
[/quote]Growth is unsustainable. Why would you want to try to spur something that is unsustainable?
[/quote]

 

 Yep.  So here’s hoping that at least part of the money goes to projects that allow us to use less (increasing efficiency projects).  That reality will stop growth sooner or later.  But there is a big difference between spending $100 billion building things that will be useful in a expensive-oil world vs spending $100 billion on things that will be useless.  Just because we reject the goal they are aiming for doesn’t mean we can’t hope/encourage/pray/call your congressman that they might accidently do something useful.  

  • Tue, Feb 10, 2009 - 04:23am

    #7

    sofistek

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    Re: Growth opportunities

Sorry about my previous post. For some reason I couldn’t edit it to get it right. This is what it should have been.

[quote=keelba]So what other jobs would you like to see created to help spur the growth in our country that we’ve all grown so accustomed to?[/quote]Growth is unsustainable. Why would you want to try to spur something that is unsustainable?

  • Tue, Feb 10, 2009 - 04:38am

    #8

    Dogs_In_A_Pile

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    Re: Growth opportunities

[quote=keelba]

I’d be happy to hear your comments about my ideas but my question really is what types of jobs could the government create to allow for future growth?

[/quote]

I’m going with Peter Schiff’s assessment that what the government should do is get out of the way.

Part 1 – http://www.youtube.com/watch?v=pFRu9xZ3QBs

Part 2 – http://www.youtube.com/watch?v=_MajfgieXKg&feature=related

  • Wed, Feb 11, 2009 - 04:31am

    #9

    sofistek

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    Re: Growth opportunities

As Chris says in his Rowe thread (https://www.peakprosperity.com/blog/official-rowe-thread/13068),

[quote]If we again
fail to heed the lessons from this crisis and opt to head down the
default path of growth, there will be no more exits in the future, only
choices between “bad outcomes” and “worse outcomes”.[/quote]

  • Wed, Feb 11, 2009 - 01:31pm

    #10

    keelba

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    Re: Growth opportunities

sofistek, I certainly agree with that statement but the problem is, they’re going to create jobs whether we think it is the right thing to do or not. That being said, would you rather they create busy work or do something more meaningful? What would that more meaningful thing be?

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