... grasping at straws by defending $1+ trillion deficits.
Inevitability is its own defense. When the corrupt boom of the Double-Zero Decade imploded, much of what Americans thought were desirable assets were no longer worthy of being considered assets. The corrupt boom committed capital to investments that eventually failed.
Only rarely has capital been so cheap as it is now. People are still scared that there might be another economic meltdown that leads to a realization of a Great Depression as nasty as that of the 1930s. People are certainly not building single-family houses when so many are available for less than the cost of new construction due to foreclosures.
As John Maynard Keynes put it in the last Depression, we are in a liquidity trap.
You describe a situation out of the 1950s in which business was investing heavily in plant and equipment and in marketing efforts. People were spending heavily on big-ticket items (cars, appliances, furniture, televisions) that were costly by the standard of the time. Workers could prosper because what they worked to make in the factory was scarce... and because their toil was necessary. Today labor and manufactured goods are cheap.
By the technological standards of the 1950s we have solved the question of scarcity by reducing the material cost of almost everything tangible. The $20 calculator can calculate far faster than a mainframe computer of 1952 can, and without the need of a high-paid programmer and a bunch of maintenance people, and that is before I even discuss what your computer can do. You can get a 32" screen TV for about $250 that offers a bigger and better picture than the 25" monitor that cost $600 in 1980... and the new one has a remote control and is cable-ready. To be sure, the newer TV has less material in it; you can hang it on your wall almost like a painting. Add to that, you don't need a projector and screen to watch a roll of celluloid film off a reel.
We have resolved the problem of scarcity but we have neglected the value of humanity. People who get treated badly will always be unhappy. Right-wing ideologies that force a race to the bottom will create suffering that no economic growth can mitigate.
Which is not to say that government can always avoid boondoggles in direct investments and in political sponsorship. If you thought Solyndra was bad (this was a technological failure), then recall Enron Corporation which had the sponsorship of right-wing American politicians (including George Worthless Bush). There have been some spectacular Roads to Nowhere (Interstate 180 in Illinois... built to facilitate the distribution of steel from a mill that since closed) and unnecessary airports. But there have also been some very good investments.
Government and business can both make bad investments -- and, as with the real-estate fraud of the last decade, can waltz together off an economic cliff.
Numbers on ledgers is, of course, accounting and not economics. But add the ledgers and you get much of the economic data. When scarcity disappears, then we need ask how we allocate the rewards. If the abolition of scarcity leads to the debasement of humanity, then something is very wrong with the technologies that abolish the scarcity or at least the bureaucratic choices of tycoons and executives.
So how do we adjust to a world in which scarcity is greatly abated? Maybe we can invest in people. Maybe we can get people to go back to school to learn the humanities that offer an alternative to the reptilian lives that so many Americans live (sex&drugs&rock-n-roll... and material indulgence, comfort, and bureaucratic power).
Numbers on ledgers is, of course, accounting and not economics. But add the ledgers and you get much of the economic data.
At least give credit to the 112th Tea Party Congress for stopping that.
Not if we have a Socialist revolution that overthrows a capitalist order that creates indulgence only for a few and suffering for the vast majority. The first step to a Marxist regime is a corrupt, brutal, hierarchical, inequitable order that fails to create mass happiness despite its ability to meet human needs.
Much of the deficit results from wars for profit in Iraq and Afghanistan... and tax cuts targeted at the super-rich. Neither has created prosperity for any but a few well-connected people. I can think of better investments. Mass transit. Retraining of displaced workers. Replacement of "Blood Alley" stretches of highway. Basic science -- of course.
