Economist Foresees High Deficits
CHAUTAUQUA – The American economy grew 3.4 percent annually from 1981 to 2000, 1.9 percent annually from 2001 to 2017, and then 2.5 percent annually from 2017 to 2019 pre-pandemic, when wages rose rapidly at the bottom, said Dr. Peter Morici.
“The best antidote for most social problems is simply a better job market,” Morici said.
However, Morici said the chance of having 3 percent growth again is low. The economy can’t grow more rapidly than the labor force and the population.
Morici foresees $2 trillion to $2.5 trillion annual deficits for the rest of this decade. Thus, during the next crisis, annual deficits will be $5 trillion to $6 trillion.
Morici also foresees slower population growth, a downsized labor force, slower economic growth (and therefore more income inequality, not less), and more inflation.
“In the end, you cannot make people better off by merely printing money and giving it to them, because money that is not earned just turns into inflation,” he said. In addition, “we’re going to be weaker militarily, because we won’t have money to spend on the Navy.”
Morici, a professor emeritus of economics at the University of Maryland, was at Chautauqua Institution on Monday, Aug. 16, as a guest of Advocates for Balance at Chautauqua, or ABC.
Morici was ABC’s final speaker of the 2021 Chautauqua season.
ABC was formed in 2018. Its mission is “to achieve a balance of speakers in a mutually civil and respectful environment consistent with the historic mission of Chautauqua” Institution. ABC is its own Section 501(c)(3) organization, legally separate from the institution.
During the pandemic, the economy contracted, and 22 million people lost their jobs, Morici said. Although the economy has fully recovered, America is down 7.5 million jobs. What happened? Morici said Americans crowded into jobs that served the country well during the pandemic, and some Americans have left the labor force, because of their age or because they’re getting government benefits that discourage work.
Some of those lost jobs are gone forever, he said. For example, fewer people going to offices means fewer people selling sandwiches at lunchtime.
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The 2021 Chautauqua season was the first when ABC events were in the Athenaeum Hotel parlor, the largest venue ABC has used.
And most 2021 events packed this new location.
ABC has announced four of its speakers for 2022, all on Mondays:
¯ Radio talk-show host Hugh Hewitt will kick off the season on June 27 by addressing 2022 congressional elections and related topics.
¯ On July 11, Professor Paul Kengor of Grove City College, in Grove City, Pa., will discuss his most recent book, The Devil and Karl Marx.
The book is “a chilling account of an evil ideology and the man whose nefarious thoughts made it possible,” ABC said. They “hold some parallels to what we’re beginning to experience in this country.”
¯ Jason Riley will take the lectern on Aug. 8. ABC said Riley is a senior fellow at the Manhattan Institute, a Wall Street Journal editorial-board member, a Fox News contributor, and a frequent speaker on ABC, NBC, CNN, PBS, and NPR. Riley has written several books, including Please Stop Helping Us: How Liberals Make it Harder for Blacks to Succeed. His recently released book is Maverick: A Biography of Thomas Sowell.
¯ On a date to be determined, John Rosemond will address ABC. The organization identifies him as an American columnist, public speaker, and author on parenting whose weekly parenting column is in about 225 newspapers. He has written 15 books.
“His ideas revolve around authority for parents and discipline for children. The ‘Three Rs’ of respect, responsibility, and resourcefulness are ‘where it’s at,’ not IQ,” ABC said. “Properly developed, they are the essence of true self-esteem and the elixir of success.”
Dr. Randy Elf’s Aug. 20, 2020, ABC presentation is at https://works.bepress.com/elf/21
COPYRIGHT ç 2021 BY RANDY ELF.