Looking back on the past 50 years, we are now faced with a period of what some have called secular stagnation, a period of prolonged low growth and low inflation. It’s a phenomenon that has been widely understood to be a possible consequence of the rapid rise of technology and globalization.

I’m well aware that the arrival of large automated systems that can perform complex tasks with superhuman reflexes is a staple of science fiction, from Isaac Asimov’s “The End of the Road” to the Matrix movies. What is less well known is that we’ve already seen the first cases of this future in the real world of finance. In the early 1980s, the computer scientist Stanislaw Ulam conceived of a system known as The Knowledge Engine, which would be able to analyze large amounts of data to make informed decisions. In the mid-1990s, the French trader Bob Lyddon proposed a similar system known as the Alpha Trader, which would use sophisticated algorithms to manage the investment portfolios of


President Joe Biden speaks at Tidewater Community College in Portsmouth, Virginia on May 3.

Photo: Evan Vucci/Associated Press A criticism of the president Biden of historical overspending is that they are stealing the economic growth of the future in exchange for a temporary stimulus over the next two years. Imagine our surprise when the White House included this criticism in its own budget proposal. That’s the fine print in the President’s FY 2022 budget proposal, which happened to be released on the Friday before Memorial Day weekend, when most of the press was not present. We’ve already looked at the paltry $6 trillion in spending, but the fiscal outlook for the U.S. economy over the next decade is almost as striking. In short, the president’s economists predict the return of secular stagnation. Readers may recall this unfortunate term from the Obama Presidency, when left-wing economists tried to explain why economic growth was stuck around 2% despite unprecedented monetary stimulus. According to them, the fault lies with our stars, not their politics. Biden’s budget indicates that after the Keynesian spending glut, we will likely see further stagnation in 2021 and 2022, with growth even lower than in Obama’s low growth years. The White House forecasts two-year growth of 5.2 percent in 2021 and 4.3 percent in 2022 as the country returns to normal after the pandemic and record government spending floods the economy and fuels consumer demand. But according to the White House, growth will drop to 2.2 percent in 2023 and then average less than 1.9 percent over the next eight years. This is notable for several reasons. First, the White House essentially admits that all of its unprecedented monetary and fiscal stimulus measures are actually measures for today, with little regard for the future. It is implicitly recognised that growth stimulated now will have to be paid for later in the form of higher taxes or tighter monetary policy, which may lead to lower growth. That’s the definition of a sugar rush. This is in contrast to a policy of real growth, which aims to create the conditions for long-term prosperity. They create the best permanent incentives to work and invest. They reduce policy distortions that lead to inefficient investments. That was the goal of the 2017 tax reform and income tax reform. Trump Deregulation, which was promising at first, until the pandemic put an abrupt end to it. Sir, I want to thank you for your support. Biden also promised better long-term growth with his economic slogan Build Better. But according to our co-author. Donald Luskin So the question is where Biden’s economic prediction is best.


The White House economic analysis boils down to the assertion that slow growth is inevitable. There is a perception that the U.S. economy cannot grow faster than 1.9% in the long run because the U.S. population is aging and demographics dictate its fate. Productivity growth is bound to slow and tax and regulatory policies are irrelevant. Some on the left even praise the Biden White House for its honest predictions of slow growth. Taxes should be raised in the name of income equality, and regulations should be expanded to solve the climate crisis, as if the latter were possible. If that leads to slower growth, so be it. Get over it, America. But if this is our fate, the consequences will be as depressing as the numbers. This means that Americans are destined to endure the economic malaise that has plagued Japan and much of Western Europe in recent decades. This means a less dynamic economy, which in turn offers fewer opportunities for progress. This means slower income growth, especially for young people and those without assets. For the government, the 1.9 percent cut represents a growing mismatch between the rising costs of Biden’s welfare state and its declining ability to fund it. An economy that grows so slowly cannot possibly afford both a robust defense budget and Biden’s welfare policies. To put it bluntly: It is a budget that foreshadows America’s economic and political decline. The question is whether the American people will go along with that. Wonderland: According to the left, negotiations with the opposition only hinder the achievement of its political objectives. Images : AP/Bloomberg News/Getty Images Compiled: Mark Kelly Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8 Appeared in print at 2. June 2021.

Frequently Asked Questions

What is new secular stagnation?

Secular stagnation is the idea that the real output of the world economy won’t grow forever. As we are running out of resources and economic growth is becoming more and more difficult, we might be entering a period of slower, more predictable and less dynamic economic growth. In this world, technology is no longer the driver of growth, or even a main driver. The economic recovery in the US has been going on for a while now, and the unemployment rate is down to levels not seen since the days of the Great Depression. However, this recovery hasn’t translated into a broad increase in wages. On the contrary, real wages have been stagnant, and some are even lower than they were in the mid 2000s. The reason for this is the same one that led to the Great Recession: an overvalued US dollar.

What causes secular stagnation?

Secular stagnation may be the most important issue facing the global economy today. The term was first coined in 1980 by the American economist Alvin Hansen, who described the phenomenon as a period of economic stagnation in advanced countries. The problem – that the economy experiences little growth – typically arises in periods of high debt, low productivity growth and minimal innovation. The world economy was remarkable for its spectacular growth from the end of World War Two, through the stagflation of the 1970s, the oil shock of the 1970s, the stock market crashes of the early 1980s, the debt crisis of the late 1980s, the Asian financial crisis of the late 1990s, the dotcom bust of the late 2000s, the sovereign debt crisis in the European periphery, the global financial crisis, the Great Recession, and not much has changed since then.

What is a secular crisis?

In the past few decades, the world has become increasingly unstable. This is not a coincidence: it is directly related to the secular crisis. Secular crises lead to unstable social, political and economic circumstances, usually followed by a sharp economic downturn. So, what exactly is a secular crisis? A secular crisis is, in a sense, a secular emergency. Secular crises are crises that are caused by the separation of state and religion, and their effects on society. Many secular crises can be solved. But, for secular crises, effective solutions are more difficult to find. For example, the crisis of secularism is one that can continue for generations with little hope of a relief. The present secular crisis is a secular emergency. It stems from the fact that secularism has failed to adequately address the problems the state poses to society.

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