Robert Samuelson, columnist for the Washington Post and Newsweek, gave a lecture yesterday about the future of the American economy. He lectured to an audience of approximately 40 people, almost all of whom were above the age of 60. Other than me, there was just one other student, and he was dressed up like he might as well have been over 60.
Samuelson predicts that “Downward Mobility” will characterize the future of the American economy, meaning essentially that the incomes of Americans may increase slightly or stay stagnant, but the purchasing power of the average American family will be noticeably reduced. He noted that since the end of the Second World War, Americans have seen a relatively high rate of income increases, but that going into the future, economic growth seems limited.
Find out more about this talk after the jump.
Samuelson noted that, since the 1940s and 50s, economic growth has relied on two factors: an increase in productivity, and an increase in the labor force. The latter has historically been centered around an increase in married women entering the workforce and population growth following the baby boom. However, in recent years both of these have stagnated with baby boomers retiring and a peak in the number of working married women.
Now that baby boomers are claiming social security benefits, Samuelson believes that a combination of higher taxes and lower spending on benefits is the only way to sustain social security in order to avoid the “Downward spiral” which is being faced by nations such as Greece who constantly have to raise taxes to sustain their entitlement programs, which penalizes economic growth, resulting in lower revenue, and the need to continue to raise taxes while destroying their economy.
Samuelson suggests that the future of America may mean that “families will live in slightly smaller homes, drive slightly smaller cars, be more efficient with energy usage, and possibly go out to dinner less” which in his eyes “isn’t a tragedy.” However Samuelson concluded saying that he might be wrong, and none of what he describes will happen.
By Randy Khalil, staff writer for News