Comments on: YAIA

By: Michael

Michael — Sat, 29 Oct 2011 16:42:36 +0000

@Jared: you didn’t engage the question. They weren’t talking about labor limits, they were talking about resource limits.

By: pjr

pjr — Sat, 29 Oct 2011 13:43:25 +0000

Regarding the first question, the reduced taxes as a percentage of GDP, although GDP is back to the 2007 level, cannot be attributed to the Bush tax cuts that existed in 2007. Individual and corporate income taxes are about 15 percent of GDP rather than 2007′s 18.5 percent because of Obama’s tax cuts or some other changes that are unclear to me. For example, the payroll tax “holiday” would account for some of this, though clearly not all. Perhaps income is even more concentrated post-recession in forms other than wages to the middle class (where payroll+income tax rates are relatively high). Also, effective corporate income tax rates may be lower today for some reason beyond Obama’s business tax cuts.

By: John M

John M — Sat, 29 Oct 2011 03:58:10 +0000

I believe that your second questioner was referring to limits on resources such as clean water and fossil fuel, as well as food production. I’ve encountered too many economists overly complacent about such issues — the cornucopian, Julian Simon types. The structural issue is huge at best. We have literally tens of millions of cars in the USA alone, practically all of which run on gasoline.

I believe that the future of energy is electrical, regardless of the actual source (wind, solar, nuclear fission, fusion, others). Liquid hydrogen may have a niche as an alternative carrier for perhaps aircraft and maybe even automobiles — bearing in mind that its a carrier, not a source. In fact, solar and wind power is favorable for market solutions — ranging from a single rooftop to huge solar and wind farms — as long as there is an electrical grid to connect to.

The Obama Administration had (and still has) a wonderful opportunity to work to upgrade our grid and spread it throughout even the most inaccessible areas, and create jobs in the process. There’s plenty of wind, and plenty of sunlight.

Apart from energy, population growth is a critical issue. Any kind of conservation or increase in efficiency is guaranteed to be wiped out by population growth. Find a way to reduce usage of resources by 20%? Increase population by 25%, and we’re back to before. Our population may be several times the carrying capacity of the world even now.