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Los Angeles, California, United States
The blog 'Breaking Bread' is for a civil general discussion, like you might have at the dinner table with guests. The posts 'Economics Without the B.S.' are intended for a general audience that wouldn't have to know the difference between a Phillips Curve, a Laffer Curve, or a Cole Hamels Curve. Vic Volpe was formally educated at Penn State and the University of Scranton, with major studies in History, Economics and Finance, and Business; and, is self-educated since by way of books and on-line university courses. His practical education came from sixty years of work experience in the blue-collar trades as well as a white-collar professional career -- a white-collar professional career in production and R&D. In his professional career and as a long-haul trucker, he has traveled throughout the lower forty-eight. From his professional career alone he has visited many manufacturing plants in the United States, Europe and China. He has lived in major metropolitan areas and very small towns in various parts of the United States. He served three years with the U.S. Army as an enlisted man, much of that time in Germany.

Wednesday, April 15, 2020

We need another Task Force -- for developing higher rates of economic growth


We need another Task Force -- for developing

  higher rates of economic growth, to reduce

  our new debt load.
Economics Without The B.S.**: 

[**  Double entendre intended.]
In addition to President Trump having a Task Force to open up the economy in dealing with the effects of the coronavirus crisis, he should have another Task Force to deal with the debt load we are going to have which resulted from circomventions taken to prevent a deflation from going out of control into a deflationary spiral like we had during the Great Depression.
We are probably going to have a debt load worse than WWII. We were able to overcome that by having several decades of very good economic growth; and reduced that debt load by 1970 to a very good operating level. We need to do the same thing -- it would also benefit folks since I don't think we are getting the best out of our well educated labor force -- better jobs, tighter labor markets, higher wages/salaries.
One of the big differences between now and the 1950s/1960s is that internationally we operate on floating exchange rates with the dollar as the supreme currency that is in high demand. Back then, we operated on a modified Gold Standard with the price of gold tied to the dollar, that restricted the U.S. role as the European economy recovered by 1960 to compete with the U.S., and then later the same thing for Japan. 
If the U.S. gets back to having higher rates of economic growth, this will create a greater demand for U.S. treasuries/U.S. debt instruments/U.S. assets/ and investment in the U.S. -- meaning it might not take twenty years to reduce a debt load well over 100% of GDP to more manageable level below 50% of GDP.

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