The Modern Micawber

Here’s the briefest possible summary of Warren Buffett’s Time op-ed:

Population increase .8% per year, GDP growth 2% per year, result happiness.

Population increase 3% per year, GDP growth 2% per year, result misery.

Over the last 30 years U. S. population growth has been about 3% per year, driven mostly by immigration. Recently, it’s been lower. The only practical way we can keep population growth below 1% per year is to constrain immigration.

16 comments… add one
  • Guarneri

    “The only practical way we can keep population growth below 1% per year is to constrain immigration.”

    Yes, but the only perceived way to bolster the roles of fresh Dem voters is to open up immigration. For those who find that too cynical I say……WTFU.

  • Jimbino

    Another way to reduce population growth is to drive the best and the brightest out of the country, which seems to be working. More Amerikans than ever before are not only emigrating, but are renouncing their citizenship, showing that oppressive tax policy is a practical way to reduce population.

    The way to make Amerika great again is to incentivize immigration of the best and brightest from foreign lands while limiting domestic breeding incentives like EITC.

  • steve

    Where do you get the 3%? Everything i read says we have been much lower.

    https://www.nytimes.com/2016/12/22/us/usa-population-growth.html

    Steve

  • It’s Buffett’s number. Maybe I misread him. Maybe he was giving a hypothetical.

    Population increase (or decrease) = births – deaths + legal immigrants + illegal immigrants. Births-deaths alone were about .4%. Legal immigration was about .4%.

    Illegal immigration is hard to nail down but in 2016 it was probably something north of 1 million new illegal immigrants or another .3% .4% + .4% + .3% = 1.1% so, unless Mr. Buffett knows something we don’t 1.1% increase is probably a slight underestimate.

    GDP increase in 2016 was under 3%.

    The point remains that we need to constrain immigration, have significantly faster growth (which nobody really knows how to accomplish) or both.

  • mike shupp

    We’ve actually got some notions on how to achieve greater economic growth. (1) boost R&D spending (2) break up some monopolies (3) reduce the concentration of wealth in the top 1% (or the top 20%) and (4) reduce prison populations and (5) perhaps increase employment among the low and medium skilled with government programs that provide valuable payoffs, e.g. upgrading sewer and water drainage facilities in major cities.

    There are political difficulties in doing any of this, not a lack of knowledge.

  • (1) We’ve already picked the low-hanging fruit. We don’t really know if more R&D will produce more growth.
    (2) I agree with you on monopolies but for other reasons. I doubt breaking up monopolies would produce additional growth. If there actually are economies of scale it might decrease growth.
    (3) We don’t know how to reduce the concentration of wealth among the top 1%. We know how to increase marginal tax rates but that won’t necessarily do it.
    (4) I’m not following you on that one. There are several ways of reducing prison populations: put fewer people in, let more out, and execute a lot more people. Which are you advocating and why will it increase growth?
    (5) We don’t do infrastructure programs that way any more.

  • mike shupp

    1. I won’t do a song-and-dance about R&D; I’ll just note the percentage of GNP the US devotes to it has been slipping downward since the 1970’s. Fortunately, or other wise, the Chinese seem to think they should be spending more on it, so perhaps they can enjoy the gains.
    2. politics
    3. politics
    4. my thought is that people with prison records usually don’t go on to highly paid non-criminal jobs, so reducing their numbers would be beneficial. As to how we reduce the number … most European nations have smaller proportions of their populations in jail than we do; perhaps we should ask them for guidance.
    5. politics

    I sort of think Tyler Cowen has a point. US society has become “complacent” and at some point we’re going to get punished for it.

  • Let’s consider the most likely candidate for additional R&D: health care. IMO putting another $500 billion or $1 trillion into medical research would be the equivalent of flushing the money down the drain. The money would just be absorbed into the system, health care researchers and providers would get paid more, and there wouldn’t be a great deal of benefit to the public or the economy at large.

    It also wouldn’t produce more exports because India and China would just knock-off anything we produced, ignoring U. S. patents.

    IMO more R&D isn’t what’s needed. What’s needed is a mass engineering program, e.g. the space program that led to landing on the moon. That produced more R&D results than all of the medical research since 1971. Heck, it produced more medical results than the medical research since 1971. I think the best candidate for such a program now would be a new, better, more durable and survivable energy grid.

  • Guarneri

    Speaking of immigration and Democrat motives:

    The Center For American Progress (CAP) Action Fund circulated a memo on Monday calling illegal immigrants brought here at a young age — so-called “Dreamers” — a “critical component of the Democratic Party’s future electoral success.”

    The memo, co-authored by former Clinton communications director Jennifer Palmieri, was sent around to allies calling on Democrats to “refuse to offer any votes for Republican spending bills that do not offer a fix for Dreamers and instead appropriate funds to deport them.” …

    “The fight to protect Dreamers is not only a moral imperative, it is also a critical component of the Democratic Party’s future electoral success,” reads Palmieri’s memo, obtained by The Daily Caller News Foundation.

    “If Democrats don’t try to do everything in their power to defend Dreamers, that will jeopardize Democrats’ electoral chances in 2018 and beyond,” reads the memo. “In short, the next few weeks will tell us a lot about the Democratic Party and its long-term electoral prospects.”
    Sadly, Palmieri’s choice of words doesn’t make it as blatantly obvious as it might, but the message is still quite clear. I suppose that any of her supporters might say that their “future electoral success” and avoiding jeopardizing their “electoral chances” are simply ways of saying that failing to support the dreamers would dishearten their base. But if we’re going to be honest here, that’s pretty much nonsense. Their base knows exactly where they stand on this and also realize that the Democrats are in the minority in Washington. So long as they put up a stiff fight and at least try to get some sort of relief, their voters won’t be abandoning them in droves for the GOP. The reality is they would dearly love to register all of those newly official dreamers with a D behind their names and get them out to the polls every year as an expression of “gratitude for all the Democrats had done for them.”

  • Guarneri

    “…..have significantly faster growth (which nobody really knows how to accomplish)….”

    As I’ve long advocated, the first step is probably to stop searching for answers from solons, and then getting public policy out of the way. The closet thing I can think of that violates this approach and has a chance of derivative success is Dave’s suggestion for the grid.

  • mike shupp

    Hmmm. 500 billion bucks is about 40 times as what the US currently spends per year on the National Institute of Health, it’s probably 20 times what we spend annually on federal and commercial medical research. I suspect that kind of money, spent in the right places, with a bit of oversight, would go very far indeed.

    As for being ripped off by the Chinese and Indians, so what? Suppose we find a way to reduce the impact of Alzheimer’s Disease, what matters most? Getting a few billion bucks of royalty payments from abroad? Or cutting back the expense and agony Alzheimer’s imposes on elderly people and their families within our own borders? Not to mention the load it would take off doctors, nurses, and attendants who deal daily with Alzheimer’s patents.

    Also, on the ripping off business, used to be, a couple centuries back, that the US was notorious for violating foreign copyrights and patents. Things changed when our population grew enough and we had authors of our own to concern about copyrights and we had corporations big enough to develop inventions worth patenting. The Chinese and Indians seem headed in that direction.

    As for the “mass engineering programs” I sort of agree. The problem is, such programs have to be large to accomplish much in less than decades, and Republicans and Democrats both have other programs they’d prefer to spend on. Which is why the space program stagnates, ocean and underseas engineering never got started, nanotechnology is still a pipe dream, and your improved national power grid won’t get built till some sort of catastrophe as bad as a nuclear war strikes us.

  • I suspect that kind of money, spent in the right places, with a bit of oversight, would go very far indeed.

    Nah. We can’t produce researchers fast enough to use a big increase. You can’t just take an unemployed factory worker and make him or her a medical researcher. You can’t even make an unemployed civil engineer a medical researcher. With the amount of specialization, certifications, etc. today it takes years and years. What would happen is that the grant recipients would give themselves raises.

    For an example look at how little progress has been made since the beginning of the War on Cancer in 1971.

  • The closet thing I can think of that violates this approach and has a chance of derivative success is Dave’s suggestion for the grid.

    Plus it’s not something that private industry will tackle. It’s too big and redundancy, one of the main strategies, is darned hard to sell.

  • mike shupp

    Well, yes. Simply throwing money into health research isn’t a cure for anything. There aren’t an infinite number of researchers with good ideas to investigate. But I could imagine, say, a doubling of the NIH budget over say a five year period. There are good researchers who get passed over because of budget shortages, there are people twiddling their thumbs figuratively as post-docs because they can’t get funding for their own projects. It’s not so bizarre to suppose an extra 12-14 billion bucks could be well spent.

    What I’d REALLY like to see, or daydream about, is a situation where government R&D is aimed at producing cures for medical ailments rather than commercial R&D aimed at producing expensive drugs which have to be taken daily for the rest of the patient’s life. Failing that, I’d like to see medicines which much cheaper than some of those being produced. Perhaps when a medical patent expires, if it goes out of production the patent should revert to federal government, which would have the option to license the product to a commercial firm or to produce and market the product itself. I hate to think what insulin might cost if it had been discovered in the 21st Century.

  • if it goes out of production the patent should revert to federal government

    What happens is that it goes into the public domain. Anybody is free to make it, sell the products, elaborate on the patented item, etc. Over the last sixty years there has been an increasing aversion to the federal government engaging in profit-making activities.

    I think the graver problem with patents is that new patents are being granted on obvious elaborations of old patents. IMO that’s an abuse.

  • mike shupp

    Okay, I used bad figures. The NIH budget is currently 34 billion, about three times what I had thought. It’s been increased from 30 billion 3 years ago, and Congress would like to add 2 billion dollars more this year (the Trump administration would like a cut),

    Mea culpa.

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