2/15/2005

Economists raise 2005 GDP forecast

Analysts have raised their forecasts for economic growth to 3.6 percent this year. It is good news that America’s GDP is growing. I get the impression that many Americans are worried that too many jobs are being moved over seas. The reality is that America is producing more than it ever has. Do you agree that many Americans believe that America is producing less? Why?

5 comments:

sam said...

I believe that outsourcing some of the jobs we have is compensated by the insourcing of other countries. It is all about the comparative advantage. If we can outsource a job to another country who can get the job done at a lower cost why don't we? This will cause individuals to continue to improve innovations, or their work ethic. either way society as a whole will become better off.

Dr. Tufte said...

It's unclear, even to macroeconomists, why people have such a pessimistic view of the macroeconomy.

My opinion on this comes out of a new strain of literature called "folk economics" (this is a new enough field that there isn't data to support it, but it sure seems plausible to me). Economic growth existed nowhere before 350 years ago, and much more recently in many places. The great thing about growth it that everyone can be a winner; to win you don't have to make someone else the loser. But, through most of our history we didn't have economic growth, and therefore a rational person would view all transactions as creating winners and losers. If we evolved with or were conditioned to this sort of response, and still have it somewhere vestigial in our minds, then it is very easy to be suspicious of growth. Growth means someone is getting rich, and with tha mindset someone else must be made poor.

Rex said...

The hole outsourcing topic has put a bad light on the nation’s growth. With this past election, a lot of time was devoted to playing up outsourcing and how it had a negative effect on the economy. The way I see it is the jobs that are going out of the country most people, educated that is, wouldn’t take even if they were offered to them. They tend to be low paying and have awful hours. With everyone’s eye on this trend they have missed the million plus new jobs that have been created here at home.

Luise said...

Outsourcing is no fault of the President. Outsourcing is the result of a company finding a cheaper way of producing their product. As Rex mentioned the jobs outsourced are not the kid of jobs most Americans want. Outsourcing has been going on for centuries. The process allocates money and resources to areas in which they will be most productive. Higher paying jobs will be crated in America due to outsourcing. Naturally there will be certain groups that will be adversely affected by it, but overall it is beneficial.

scott said...

The economy is doing great, for now. But what frightens people about the world economy includes terrorism and a more conservative attitude. I think a lot of Americans believe the economy is still suffering from 9/11 and the .com bubble.