2% Economic Growth: Real or Apparent?

That's the question I tackle in my latest article at Forbes.com. The piece is largely based on a previous blog post. The short answer is: more apparent than real. As I conclude:

The bottom line is that increases in GDP statistics caused by monetary and fiscal stimulus signals an economic expansion that is more apparent than real. Any economic expansion that does not result from increased voluntary saving and investment cannot be sustained. The minute the government slows the rate of government spending or the Federal Reserve slows the rate of growth in the money supply, the economic lie is exposed and economic law once again asserts its authority. Capital malinvestment and the misallocation of factors of production no longer can be covered over as the official statistics catch up with reality.

Who Spends Wisest?

My latest op-ed has been published on Forbes.com. "Since Monetary Spending is Unequal, Who Spends Wisest?" explains one reason why government spending and monetary inflation are not roads to prosperity.  My main point is that, because of the existential fact of scarcity,

Not all monetary spending is equal. Economic prosperity requires wise entrepreneurship. If spending is funded by voluntary saving and invested according to profit and loss considerations, it tends to be productive and hence, add to our prosperity. If spending, however, is funded by coercion and apart from economic calculation, scarce goods are wasted, and the result is relative impoverishment, prolonged recession, and unemployment.

America's Alleged Economic Recovery

My latest op-ed has been published on Forbes.com. In "America's Alleged Economy Recovery Is Slower than Japan's Lost Decade (the title was the publisher's idea), I attempt to explain why the vast majority of the most recent economic data does not look so good. My main argument is that much of our statistical recovery has been only apparent and made possible by government spending and monetary inflation. Such "recoveries" are always temporary at best because they are not built upon the economic bedrock of the market division of labor, savings and capital accumulation, and wise entrepreneurship.

What's In a Recovery?

My latest op-ed has been featured at Forbes. In "What's In A Recovery?" I offer some preliminary thoughts in explaining our recent macroeconomic performance. When private investment languishes while government spending continually rises, any boom will be temporary at best.