Economic Growth

Politicians want you to believe that their favorite policies will promote economic growth. Perhaps they will, but it is almost always temporary. Look at it this way, the technology of 500 BC allowed for a certain per capita productivity. The technology of 1990 allowed for a greater per capita productivity. On average the growth rate in the intervening years is a direct consequence of advances in technology and population growth. The only sustainable ways to promote economic growth are to invest in technology and to encourage population growth. Seeing as population growth stinks (and is the root cause of global warming), that leaves technology.

Admittedly some politicians do promise to invest in technology. But most just call for measures that will boost consumer confidence, etc. As if getting people to send more money to China will help. Case in point, lowering interest rates. The Federal Reserve should not be in the business of trying to impose a 'natural' growth rate. Their job should be to insure a stable money supply. Bernanke has exactly the right idea with 'inflation targeting'. Short term actions to soften recessions are fine, if you know when to stop. Good luck with that. What politician would ask the Fed to stop boosting the economy when unemployment is in double digits?

The moral is: for economic growth, invest in universities, basic reasearch, and large scale projects with technology spinoffs.