“Secular Stagnation” Is Nonsense… Here’s the Real Reason Behind the US Downturn, by John Mauldin

STRAIGHT LINE LOGIC

Secular stagnation seems to have a strong correlation to an increasing share of the economy by the government. Must be a coincidence. From John Mauldin at mauldineconomics.com:

My good friend Charles Gave recently wrote an instructive article titled “Tale of Two Countries.”

In the UK and France, structural growth rates have diverged since 1981. The rate has fallen by two-thirds in France, while in the UK it has risen.

Why?

Well, to begin with, in the UK, Margaret Thatcher was elected prime minister in 1979. She reduced the role of the bureaucracy in managing economic activity and dialed back government spending as a percentage of GDP.

Meanwhile, in France, François Mitterrand was elected president in 1981 on a platform that expressly aimed to expand the scope of government.

“The effects on growth were predictable,” says Charles.

Meanwhile in the US, when government spending as a percentage of GDP shot up…

View original post 178 more words

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Author: Lisa the Infidel

I am an #Infidel - born and bred North Carolina.

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