Why is economic growth so important?
"One of the best answers to this question that I've ever read is in a paper published by Robert Lucas in the Journal of Economic Perspectives. That journal is meant to a be a place for experts to write about their area of expertise (in economics) for a general but still technically-minded audience. They recently opened up the journal as free to the public, which is a fantastic resource -- you no longer need a subscription to JSTOR (or whatever) to read it.  You can read the abstract to the paper, and find a link to it, here. One of the things that I like a lot about this paper is that it strips out absolutely everything even slightly unnecessary to thinking about a macroeconomy, and just discusses what one can arrive at with a very very simple model. Of course, with great simplicity come sacrifice about details. However, it does a great job of answering your question, ""why do people care about growth?"" A quick note: the key to understanding the answer to your question is to think about things in terms of ""the long term""  -- not even looking forward to the future, because we'll be dead by then, but looking back to the past. The key to the importance of growth is that, for the last ~200 years, the US has, on average, had maybe 2-3% ""real growth"" per year (I'm pulling these numbers out of my head; I think much better numbers are in that paper somewhere). On average, over that period of time, this growth has meant that the quality of life that one has, if one lives in a country experiencing this growth, is enormous compared to countries that do not experience this average growth over that period.  Statistically speaking, growth is also somewhat auto-correlated. Roughly speaking, if it was low the last few periods, you can expect it to be low the next period. Same thing if it's high.   Then, the reason we care about growth right now: if you have too many periods of low growth, pretty soon the average ""over the long term"" growth will be pulled down -- and then quality of life can't be higher in the future (which quickly becomes someone's ""present""). The paper above makes this point with a very simple model. Of course, none of this touches on distributional issues, which are another issue entirely. With respect to, ""The economy needs to grow to just keep up with its debt repayments,"" I think the answer is along the lines of, ""sometimes countries get into debt expecting that growth will increase their resources in the future, and thus they can pay back their debt."" That strategy is, of course, the strategy that anyone borrowing (""taking out a loan"") should be employing -- you should expect that your future income will be enough to pay back your interest+principle on a loan you took. Otherwise you're irresponsible. At the aggregate level, production is the nation's ""income"" -- it is what you have, all that you have (as a nation) to pay back any debt you've incurred at the national level." If you have an increasing population but a steady supply of wealth then there will be a perceived effect of decline.  As the average person can afford less and less.  If inflation is factored in this effect is accelerated as the value of money is reduced but the availability of that money is as well.  In this model those who have tend to accumulate as they produce. And those who do not have tend to lose wealth as they consume to fill basic needs, at ever increasing prices, with a declining source of income, exacerbating the effect.   If you control your population, prevent inflation and deflation, and maintain a constant production/consumption cycle that is perfectly in balance then you could have that utopian society.  But in practice there is waste.  That waste makes maintaining that balance impractical at best.  People have different desires and motivations.  So while that utopian society that you propose seems possible at the theoretical level when solely looking at the mechanics and economics, in practice it becomes more about managing the people.  Which makes the task virtually impossible. As for the debt issue that is the strategy of many of the western nations.  Most of them experienced growth over the last 50 years that was unprecedented in history.  Many of them simply assumed it would continue indefinitely and failed to plan for a downturn.  In addition they planned for the growth and borrowed based on the assumptions.  When the growth slowed several continued to use the same projections for their budgeting, with the effect of spending money they would not take in.  So in a way, yes the growth is needed to service the continued growth of debt, unless the government issuing that debt is willing to reduce its expenses. "Wealth is not distributed equally in any economy.  And, even if it were, differentiation between people would lead to different interests being expressed in different ways. As people either attempt to earn more (to improve their situation) or different people express those interests in different ways (saving money to go on a skiing holiday, or to put a downpayment on a house) people invite new products and services to be created to satisfy those demands. In addition, there is the problem of uncertainty.  People save money today to cope with uncertainty tomorrow (healthcare, pensions, education, etc.). Those savings don't remain idle, but are lent to others who believe that they can make a return through investing in new businesses or ideas. The point being that any dynamic economy will experience change in the amount of goods available to the people within that economy. From an economic perspective ""growth"" is just another permutation.  From a political perspective, ""growth"" implies that people are getting wealthier.  If that growth is asymmetrically distributed (e.g. the poor don't experience it and the middle classes don't feel they get enough of it) then that is a problem for politicians. The emerging markets of the world are trying to raise millions of people out of poverty.  Growth is a way of measuring how quickly they are achieving that end. Growth, in and of itself, is meaningless.  There are some people who believe that ""we"" (as some proxy of society) have enough stuff and growth is unnecessary but that implies that everyone is satisfied.  For as long as some people wish to have more wealth/stuff, and have the means to achieve this, there will be growth. And for as long as there is uncertainty growth will vary." "There is an economic principle called ""non-satiation,"" which translated into plain English means ""people always want more."" (This was best illustrated in the movie, Oliver Twist, ""Please sir, can I have MORE?"") Over time, most people won't be satisfied with ""things as they are."" Which is why growth is so important. Many behavioral economists would argue that it is not the LEVEL of utility, but rather the utility CHANGES (in calculus, ""deltas"" or ""derivatives"") that make people happy. Or not."
"The statement can be true, but isn't a general rule. Crashes and recessions are two different things. A crash is when the market rapidly revalues something when prices are out of equilibrium, whether it be stocks, a commodity or even a service.  When the internet was new, nobody knew how to design webpages, so web page designers were in huge demand and commanded insane price premiums. I literally had college classmates billing real companies $200+/hr for marginal web skills. Eventually, the market ""clued up"" and that industry collapsed overnight. Another example of a crash from the supply point of view was the discovery of silver in the western US during the 19th century -- these discoveries increased the supply of the commodity to the point that silver coin eroded in value and devastated small family farms, who mostly dealt in silver currency. Recessions are often linked to crashes, but you don't need a crash to have a recession. Basically, during a recession, trade and industrial activity drop. The economy operates in cycles, and the euphoria and over-optimistic projections of a growing or booming economy lead to periods of reduced growth where the economy essentially reorganizes itself. Capital is a (if not the) key element of the economic cycle -- it's a catalyst that makes things happen. Debt is one form of capital -- it's not good, not bad. Generally cheap capital (ie. low interest rates) bring economic growth. Why? If I can borrow at 4%, I can then perform some sort of economic activity (bake bread, make computers, assemble cars, etc) that will earn myself 6, 8 or 10% on the dollar. When interest rates go up, economic activity slows, because the higher cost of credit increases the risk of losing money on an investment. The downside of cheap capital is that risk taking gets too easy and you can run into situations like the $2M ranch houses in California. The downside of expensive/tight capital is that it gets harder for businesses to operate and economic activity slows down. The effects of either extreme cascade and snowball." Yeah, I get the logic of what you are saying, because his comments are really ambiguous, but his argument is pointing the other way. So what he ACTUALLY means by driving capital overseas is that other countries are seeing greater economic growth overall, and therefore better investment returns (that's why capital is fleeing), but it's because US growth is badly constrained.  It's constrained because the Republican stranglehold on Congress is preventing government investment that will support greater corporate growth.  I wish he would say it more clearly, but from the context of his comments here (and elsewhere), this is what he means.  He is not reversing his former views, but amplifying them. "&gt; So the fact that i was born here against my own free will automatically gives the government the right to seize the fruits of my labor?  Yes, in the same way that being born to parents living in a clean house means you are going to make your bed, pick up your clothes, and mow the lawn...   &gt; ""well just leave then!""   Well, yes. It is either that, or change the laws.   &gt; Which is fucking stupid and in pretty sure I already gave you 1 way but I'll say it again cuz it's clear you're incapable of following along  For someone who is so sure that they have ""*THE* answer"" you sure are defensive. It is quite possible that I have had a discussion over the SAME topic over the last 5 days with a *bunch* of people because so many people got butt hurt that I enjoy paying my taxes, and feel it is a patriotic duty because of all the good it does.   &gt; federal sales tax  So federal sales tax is your big secret? I would actually be fine with it, as long as it took into account those that are currently not paying income tax due to poverty or disability.  &gt; That's why you see countries like Sweden with insane tax rates seeing limited growth and in a lot of cases on the verge of an economic collapse.   I have lived in Europe for a number of years. I was in Germany last year, I will be in Spain next week. If you think that strong tax policy makes a country economically weak, then you have not actually lived in any of these countries, have you?   Sweden is currently ranked 11th in the world for [GDP per capita](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita). Matter of fact, the only country in the top ten of that list that don't have a strong tax policy is Qatar - and that is only because of ridiculous oil money. Would like to see where they sit in two years.   Sweden last year had an [economic growth rate of 4.1%](http://www.imf.org/en/News/Articles/2016/11/14/111716Sweden-Great-Economic-Performance-but-Mind-the-Debt). More than 3 times what the growth rate in the US was, at [1.6% for 2016](http://www.cbsnews.com/news/u-s-economic-growth-slowed-in-2016-to-1-9/). It was ranked [#34 in the world for economic growth](https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_growth_rate), just under your Bahamas with their no income tax, no estate or wealth tax, but well above the US at 47. The IMF matter of fact said their economy was ""in good health and growing robustly""... So, not sure where you are getting your facts from, but may want to think again. I would recommend that you actually go visit a couple of these ""tax hellholes"" and see for yourself how ""crushed"" by their taxes these poor victims of government ""theft"" are..." "This is the best tl;dr I could make, [original](https://www.commondreams.org/news/2017/08/11/universal-basic-income-needed-break-addiction-economic-growth-killing-us) reduced by 70%. (I'm a bot) ***** &gt; As some tech giants throw their weight behind the idea of a universal basic income, one anthropologist says it&amp;#039;s a key component of a strategy to break the &amp;quot;Addiction to economic growth [that] is killing us&amp;quot; and the planet.  &gt; The idea of a universal basic income is gaining attention in the U.S. thanks to a recent resolution put forth in Hawaii, and Philip Alston, U.N. Special Rapporteur on extreme poverty and human rights, said earlier this summer that a basic income is &amp;quot;a bold and imaginative solution&amp;quot; amidst growing economic insecurity.  &gt; Laura Williams of the U.K.-based advocacy group Global Justice Now recently asked, &amp;quot;Has the time for universal basic income come?&amp;quot;.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6tlybg/jason_hickel_ubi_needed_to_break_addiction_to/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~190425 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **basic**^#1 **income**^#2 **Hickel**^#3 **economic**^#4 **planet**^#5" I mostly agree with everything you said except the part regarding debt.  The whole point was that continued growth would pay off debt, not that individuals would go into more debt than they can pay off.  The second idea would be illogical as debt holders want to get payed back. Last I checked, Argentina had a growing economy.   [Argentina 1991-2011 GDP Per Capita](http://en.wikipedia.org/wiki/File:Latin_America_GDP_per_capita_1991-2011.png)  * Foreign direct investment in Argentina is divided nearly evenly between manufacturing (36%), natural resources (34%), and services (30%). The chemical and plastics sector (10%) and the automotive sector (6%) lead foreign investment in local manufacturing; oil and gas (22%) and mining (5%), in natural resources; telecommunications (6%), finance (5%), and retail trade (4%), in services. Spain was the leading source of foreign direct investment in Argentina, accounting for US$22 billion in 2009; the U.S. was the second leading source, with $13 billion (17%). Investments from the Netherlands, Brazil, Chile, and Canada have also been significant. In all, foreign nationals hold around US$86 billion in direct investment.  * Argentina's economy grew by 9% in 2010, and officially, income poverty declined to 8% by 2011; an alternative measurement conducted by CONICET found that income poverty declined to 22.6%.[Argentina's unemployment rate in the fourth quarter of 2011 was reportedly down to 6.7% from 8.4% in the fourth quarter of 2009, according to INDEC data. The jobless rate has declined from 25% in 2002 largely because of both growing global demand for Argentine commodities and strong growth in domestic activity.  Argentina proves my theory. The closest thing that you are looking for would be FOREX exchanges. Currency value is affected by the relative growth of economies among other things, and the arbritrage of currencies would enable you to speculate on the relative growth of an individual economy. Over the long run, yeah I agree that that the technology consumers have and their real incomes have gone up. However, people don’t live their lives in the long run, their experiences are firmly centered in the short run. People marry, have children, move, start work, lose work, suffer health problems, divorce, homelessness all in the short run.   When you zoom in from the long run view, life and individual fortunes seem a bit more dependent on luck and relative positioning than long run technological or economic trends. This is exacerbated by our political system where money seems to positively correlate with the ability to wield political power. Folks with political power can engineer changes that can improve their bottom line through zero sum political games (think taxes, regulation, etc) and maybe even turn a short run advantage (starting a successful business, generating wealth) into a longer run advantage (eliminating taxes on inheritance, potentially cementing family wealth for generations).