Depressing thoughts here:
Here is the lecture’s provocative final thought: “Is it possible that by imitating European policies on labor markets, welfare and taxes, the U.S. has chosen a new, lower GDP trend? If so, it may be that the weak recovery we have had so far is all the recovery we will get.”
Our two-to-three percent GDP productivity growth, from 1870 to 2008 a result of free-market capitalism. Until 2008, that is.
You know when Bush wrecked the economy. Obama’s driving us out of the ditch, right? We’ll be back on track, soon, right?
“If we’re going to move to a European welfare state,” says Prof. Lucas, “we’re going to have to pay a European price.” And that price could be a permanently lower level of GDP per person. The U.S.’s amazing 100-year ride would slow.
We can’t have both – robust GDP growth AND Eurpoean-style socialism. It’s one or the other.