Anti-border tax coalition

April 20, 2017

http://www.reuters.com/article/us-usa-tax-lobbying-idUSKBN17C2HQ

I’ve been predisposed for a week or so and it’s now time to get caught up on some things.  There’s been a lot in the news lately regarding Trump administration policies on immigration and trade.  I’m extremely pleased with what’s happening on immigration, less so with what I hear about Trump waffling on the idea of a “border tax” (another name for tariffs).

But I’ll start with the above-linked story that came out last week because this is a perfect example of the divergence of interests that takes place when a nation becomes “economically over-populated” or takes on the characteristics of such an economy through free trade with a badly overpopulated nation.  For the benefit of those unfamiliar with this concept, this divergence of interests is one of the consequences of the inverse relationship between population density and per capita consumption.  As a society becomes more densely populated, the need to crowd together and economize space begins to erode per capita consumption.  As per capita consumption declines, so too does per capita employment.  The result is rising unemployment and poverty.   It’s in individuals’ best interest – in the best interest of the common good – that this situation be avoided.  (To better understand this concept, I encourage you to read Five ShortBlasts.)

However, while per capita consumption may begin to decline as a population density reaches a certain level, total consumption continues to rise with a growing population.  Who benefits from that?  Anyone in the business of selling products.  Not only do they benefit from the increase in sales volume, but they benefit further as the labor force grows faster than demand, putting downward pressure on wages.  Thus, it’s in corporations’ best interest to see population growth continue forever, and to pursue more markets through free trade.

So it’s in the best interest of the common good that we avoid meshing our economy through free trade with nations whose markets are emaciated by overcrowding and who come to the trading table with nothing but bloated labor forces hungry for work.  But it’s in corporations’ best interests to grow the overall customer base through free trade with those same nations.  So it comes as no surprise that a big-business coalition is eager to steer lawmakers away from any tax plan that would include a “border tax” (a tariff) that might shut them out of their foreign markets.

They call themselves “Americans for Affordable Products,” making it sound as though it is individual Americans who make up this coalition and not global corporations.  They want us to believe that products will become less affordable.  While prices for imports may rise, they want you to forget that those increases would be more than offset by rising incomes and falling tax rates.  They don’t care if the border tax benefits you.  All they care about is that it may not necessarily benefit them.

So which of these competing interests will lawmakers heed – their wealthy corporate benefactors or the angry Americans who swept the Trump administration into power on his promise to enact a border tax and bring our manufacturing jobs back home?  Money talks and I fear that groups like this coalition are having an effect.  Trump and Republicans would be wise to ignore them.  Democrats paid the price for ignoring the plight of middle-class Americans when Obama betrayed his promise of “hope and change.”  Those same middle-class Americans will pull the trigger on Trump too if he doesn’t come through.

 


Deficit Spending Holding Recession at Bay

August 26, 2016

It’s been a long time since I posted on this subject – about a year and a half.  Some discussion about the national debt jogged my memory, and I was curious to see how my chart would look now.

The following chart tracks the growth in the national debt vs. the “cumulative trade deficit.”  It’s an important metric because the trade deficit siphons money from the economy – money that is subsequently pumped back into the economy by federal deficit spending.  Countries who run a trade surplus with the U.S. repatriate those dollars primarily through the purchase of U.S. government bonds – bonds that are used to finance deficit spending.

Over the years, these two metrics have tracked very closely together, but not perfectly.  Sometimes deficit spending outpaces the trade deficit.  Sometimes it lags.  But any time that deficit spending lags the trade deficit, a recession is always right around the corner, since the net effect is a drain of money from the economy.

Typically, toward the end of a president’s administration – especially if it’s been a 2-term administration, deficit spending begins to decline as stimulus programs implemented at the beginning of a new administration expire and as pressure builds to rein in the deficit.  It happened at the end of the Clinton administration and at the end of the George W. Bush administration.  For this reason, I’ve been predicting that the Obama administration would end the same way.

It doesn’t look like it will.  Take a look at the chart:  growth in nat’l debt vs cumulative trade deficit.   Clearly, the Obama administration has felt no compulsion to rein in deficit spending like his predecessors.  When it comes to deficit spending, President Obama has kept his foot on the throttle like no other before him, pouring money into the economy.  In light of this, it’s not surprising that the economy has managed to hang on by its fingernails to avoid another plunge into recession.

Where has all the concern about fiscal restraint gone?  In the early ’90s, during the George H.W. Bush administration, deficit spending raced ahead of the trade deficit.  By the time Clinton took office, there was a lot of concern about the exploding national debt, so Clinton worked with Republicans to rein in the spending and actually balance the budget (on paper, at least).  He could afford to do it.  Thanks to the explosion in personal computer and cell phone technology and manufacturing, the economy hummed along at a brisk pace.  But by the end of his administration, the tech bubble burst, the trade deficit began to explode (thanks to NAFTA and China’s admission to the WTO – both of which were Clinton’s progeny), and there was little deficit spending to pick up the slack.  His administration ended in a bad recession.

So what’s different now that makes Obama immune to the exploding deficit?

  • Interest rates have fallen to near zero.  So interest payments on the national debt have actually declined in spite of a growing debt.  Zero percent of any amount, no matter how large or small, is still zero.  In fact, there’s even some talk of the possibility of interest rates going negative, as they have in Japan.
  • Perhaps because of the above or, for whatever reason, all political pressure for fiscal restraint has vanished.  No one – not even Republicans – even mention it any more.  No one seems to care.
  • Central banks around the world – and that includes the U.S. – are getting very skittish about the potential for another recession at a time when their recession-fighting ammo is all spent.  They’re pressuring governments to actually step up deficit spending.

In light of this, it’s not surprising that the recession I’ve been predicting hasn’t yet taken hold.  What is surprising is that the economy isn’t doing better than it is.  Twenty years ago, if you had told economists that the federal government would be running a $1 trillion/year deficit, that interest rates were near zero, that the Federal Reserve would have a $4.5 trillion balance sheet, and that the result of all of this was GDP growth of only 1%, they’d have told you that you were crazy – that it was impossible.  Yet here we are.

It’s surprising to many, perhaps, but not to those of us who understand the inverse relationship between population density and per capita consumption, and that all of our efforts to prop up the economy with rampant immigration-fueled population growth are actually eating away at consumption as fast as we can add new “capitas.”  The end of growth is at hand.  It has often been said in the corporate world that “if you aren’t growing, you’re dying.”  The day may be coming when even a “no growth” economy might look good.

 


Trump

July 22, 2016

So disillusioned was I with Obama’s broken promises to address the problems with our trade policy, his broken promise to double exports in five years, his signing of the awful trade deal with South Korea and, more recently, his pursuit of bigger, more expansive trade deals with Pacific rim nations and with Europe, I vowed to myself that I would stay out of politics on this blog going forward.  However, as discoverer of the inverse relationship between population density and per capita consumption, as author of the book Five Short Blasts that explains the relationship and its ramifications and, consequently, as an advocate of policies that would restore a balance of trade and move us toward a stable population, and in the wake of Donald Trump’s acceptance speech at the Republican National Convention last night, I feel I can no longer ignore the elephant in the room.

Now more than halfway through my seventh decade on this planet, I have spent my whole life watching our country being sucked into the vortex of “globalism” in which the United States has evolved from a beacon of hope and prosperity into a host upon which overpopulated nations, unable to sustain themselves, could feed and thrive.  Our political parties evolved into one “Republicrat” party, supporting the trade and open-border policies that are central to making “The New World Order” tick.  The “hope and change” that Obama spoke of, especially his promise to fix our trade policy, I thought, might be our last chance to stop that madness.  In the wake of his betrayal, I figured that was it – that I’d never live to see an America again that was something other than the hollowed-out shell we’ve become.

On more than one occasion, I have called Donald Trump a “buffoon.”  We’ve seen him dip his toe into politics before, only to self-destruct through outlandish pronouncements and behavior.  He got my attention with his vow to “build the wall,” but I figured the same thing would happen again.  He’d soon self-destruct.  I thought that those who gave him a 1% chance of winning the nomination were being generous.  He was just grand-standing and having fun, enjoying another brief stint in the spotlight like he’s done before.

Then he vowed to rip up our trade deals and start over on trade, making new deals that actually worked for us.  He got my attention again.  I wanted to get my hopes up, but figured that, surely, his antics during the primary race would sink his chances.  To my amazement, they didn’t.  He was saying the right things about illegal immigration and about trade, but I was dismayed with the personal attacks.

Finally, last night, I saw the Trump I’d been wanting to see.  He was still Trump and, defying predictions that he’d back away from earlier promises in order to broaden his support, he actually doubled down on each one.  But gone were the personal attacks.

Trump was exactly right when he pointed out that our trade and immigration policies have done more harm to the poor, to the inner cities, to blacks and Latinos than to anyone else. I hope the folks from these demographics paid attention and kept open minds.

Unlike the Trump I’ve seen in the past, he seems truly sincere in his desire to turn the country in a very different direction.  At least that’s the way he came across last night.  It’s hard to imagine that a man 70 years old would subject himself to everything that goes with winning this nomination and waging the campaign to follow unless he really has a fire in his belly to do what he says.

But can he?  Can he get the political establishment to go along with with his plans – plans that seem radical and dangerous to many of them?  Can he back us out of trade deals in the face of threats from these other countries that will probably scare the hell out of people?  I have said that restoring a balance of trade would not be without pain, driving up the cost of goods until our own domestic manufacturing can get re-established.  Can he, a total Washington outsider, do this without mucking it up and perhaps forever sinking any hope that it will ever be tried again?   Will he be brain-washed into joining the ranks of the globalists as Obama was?  (That would seem unlikely with Trump.)  Does he really have the energy and drive to make all this happen?

Or am I just being suckered again?  I hope not.  As one who understands that the effects of our enormous trade deficit and our immigration policies on our economy dwarf all other factors – including currency valuations, Fed policy, stimulus programs, and so on – I have to at least give the benefit of the doubt to candidates who are at least claiming that they’ll tackle these issues.  Only time will tell.

In the meantime, I’ll keep doing my small part to convince you and others of the perils of our free trade and open border policies.

 


America’s Best Trade Partners, 2015

May 25, 2016

In my previous post, we examined the list of America’s worst trading partners in 2015 and found that it was heavily dominated by nations that are much more densely populated than the U.S.  Additionally, we saw that low wages, often blamed by the ill-informed for our trade deficit, played no role whatsoever.  In fact, the very top of the list was populated with wealthy nations – some even wealthier than the U.S.

If, in fact, population density is what really drives global trade imbalances, then we should see the same effect at the opposite end of the spectrum.  That is, we should find a list of nations with whom we have the largest surpluses dominated by low population densities.  Let’s take a look.  Here is the list of America’s twenty largest trade surpluses in manufactured goods in 2015:  Top 20 Surpluses, 2015.

At the very top of the list is Canada, by far and away America’s best trading partner.  At $50.2 billion, our surplus with Canada is more than 2-1/2 times larger than the next biggest surplus on the list.  In the past ten years, our surplus with Canada has exploded by 245%.  With a population density of only ten people per square mile, Canada is one of the least densely populated nations on earth.

But as you scan down the list, you see a mix of nations with both low and high population densities.  At first glance, this would seem to cast doubt on the whole population density theory, until you realize the role that oil plays in landing some of these nations on this list.  Oil is universally priced in American dollars, regardless of the nation that is exporting the oil.  American dollars are legal tender only in the United States so, ultimately, all of those dollars must be returned to the U.S.  This happens predominately through either the purchase of American goods or through the purchase of American debt – bonds issued by the government or by American corporations.  So it’s almost automatic that net oil exporters like Qatar, Kuwait and Nigeria, among others, appear on this list in spite of their high population densities.

Actually, Canada is America’s biggest source of imported oil, which helps to explain their position on the list.  That, coupled with their low population density, is what has driven them so far to the top.

If we discount the seven nations on the list who are net oil exporters, of the remaining thirteen only three have population densities that are above the world median:  the Netherlands, Belgium and Egypt.  Seven of the thirteen are less densely populated than the U.S. (at 87 people per square mile).  Regarding the Netherlands and Belgium, these tiny nations share the only deep-water port on the Atlantic coast of Europe and use that to build their economies around trade, importing American goods and redistributing throughout Europe.  Egypt appears on the list because they are a big recipient of foreign aid.  All foreign aid is booked as exports at face value even though it is given away.

The average population density of these twenty nations is 240 people per square mile, in contrast to the average population density of 737 people per square mile on the list of our worst trade partners.  But it’s a little misleading to average the figures in this way, since the population density of a few tiny nations can skew the data.  If we calculate the population density of the list by dividing their total population by their total land mass, the population density drops to 45 people per square mile – half that of the U.S.  For the list of our twenty worst trading partners, that figure is 503 people per square mile – more than ten times as densely populated.

Look at the purchasing power parity of this list of nations.  Take away tiny, inordinately rich Qatar, and the average wealth of the remaining nineteen nations is $32, 268 – almost identical to the average wealth of the nations on the list of our twenty worst trading partners.  So wealth – roughly analogous to wages – plays no role on these two lists whatsoever.

Now let’s look at this from another perspective.  If we factor out the sheer size of nations, which nations’ citizens, man-for-man (in per capita terms), are our best trading partners?  If population density is a factor in determining trade imbalances, we should once again see a list that is dominated by less densely populated nations and, probably, net oil exporters.  So here’s the list:  Top 20 Per Capita Surpluses, 2015.

Though the list is a little different now, we see the same thing.  There are seven net oil exporters on the list.  Of the remaining thirteen, all but three – the Netherlands and Belgium again, and Costa Rica – have population densities less than the global median.  Of the remaining ten, all but one – Panama – is less densely populated than the U.S.  The average density for these twenty nations is 206 people per square mile.  But the population density of the group as a whole – the total population divided by their land mass – is down to 20 people per square mile.  For our worst trade partners, that figure is 372 people per square mile.  It bears repeating.  The population density of our twenty worst trade partners is more than 18 times that of our best trade partners.

The data that I’ve presented here in my last few posts is absolute, undeniable proof that population density is what drives global trade imbalances.  Not wages.  Trade policy that fails to recognize this relationship and fails to employ some mechanism (like tariffs) to maintain a balance of trade is doomed to yield the huge trade imbalances that have been growing and eroding our economy for decades.

 


America’s Worst Trading Partners in 2015

May 19, 2016

It’s time for my annual ranking and analysis of America’s best and worst trading partners for 2015.  No surprise, it was another dismal year for American manufacturers, racking up the 40th consecutive year of trade deficits and setting a new record in the process – a deficit of $648 billion.  That surpasses last year’s record deficit by a whopping $109 billion.

Since the surpluses of trade with our best trade partners is overwhelmingly swamped by the deficits with our worst partners, let’s begin there.  This year I’m going to first present the list in the most basic terms – a list ranked in order of the sheer size of the deficits. Check out this list of America’s twenty worst trade partners in terms of our deficit in manufactured products:  Top 20 Deficits, 2015.

The nations at the top of this list should come as no surprise to anyone.  Trade with China dwarfs them all with a deficit of $367.5 billion – more than four times larger than our second largest deficit with Japan.  That’s not surprising when you realize that China has ten times as many people as Japan.  China actually accounts for about one fifth of the entire world’s population.  The following are some other key observations about this list:

  • Look at the population density of these nations.  The average population density is 737 people per square mile.  That’s eight times the density of the United States.  With only one exception – Sweden – every nation on this list is more densely populated than the U.S.  Most are much, much more densely populated.
  • Eight of these nations are wealthy European nations.
  • Over the past ten years, our trade deficit has worsened with 17 of these nations.  Most have worsened dramatically.  The nation with whom our balance of trade has improved the most (that is, with whom the deficit has declined the most in the past ten years) is Sweden – the only nation on the list less densely populated than the U.S.
  • Our trade deficit with Japan has actually declined by 18% over the past ten years.  Why?  Simple.  South Korea is “eating their lunch.”  Imports of South Korean cars – Hyundais and Kias, along with imports of South Korean appliances like those made by LG, Samsung and others – has cut into Japan’s market share.  Remember when President Obama signed a new trade deal with South Korea in 2012, proclaiming it a “big win for American workers?”  In three short years our trade deficit with South Korea jumped 50%.
  • Our fastest growing trade deficit is with Vietnam, growing by 440% in the last ten years.  Some may point to the fact that at $6100 per person, Vietnam has the lowest purchasing power parity of any nation on this list – only slightly better than India – and that this is the reason for the explosive growth in our trade deficit with them.  However, our second-fastest growing trade deficit is with Switzerland, a nation that is actually more wealthy (with higher wages) than the U.S.  What Vietnam and Switzerland do have in common is a high population density.  It’s the one thing that (nearly) all of these diverse nations have in common.

Many people will look at this list and quickly conclude that, when it comes to our trade deficit, the problem is China and so that’s where we should focus.  Somehow, some way, they’re obviously not playing fair with us.  They’re manipulating their currency, they’re ignoring workers’ rights.  They’re trashing the environment.  And so on.  So let’s get tough with China.

The problem is that China can legitimately complain that of course our deficit with them is big, simply because they are a big nation.  Person-for-person, our trade deficit with Japan is worse.  OK, so in an effort to be fair, let’s broaden our efforts to include Japan.  “Not so fast!” the Japanese will complain.  “What about Germany?  Their surplus with you is nearly as large and they have only half as many people as we do!”

The point is that in determining the root cause of these enormous deficits in order to formulate an effective trade policy, we need to factor out of the equation the sheer size of these nations.  Let’s determine who are really our worst trade partners on a person-for-person basis.  So here’s a list of our worst trade partners in terms of the per capita trade deficits:  Top 20 Per Capita Deficits, 2015.

Now we can see what a mistake it would be to simply conclude that China is the problem.  In per capita terms, they barely make the list of the top twenty worst deficits.  In fact, there are now ten European nations on this list and, in per capita terms, our trade deficit in manufactured products is worse with all ten of them than it is with China.  Here are some more key observations about this list:

  • Once again, all but two of the nations on this list – Sweden and Finland – are more densely populated than the U.S.  Most are far more densely populated.  Only three have population densities less than the median population density of the world, which is 184 people per square mile.  One – Ireland – is right on the median.  The other 80% of the nations on this list are much more densely populated.
  • Most of these are wealthy nations, with an average purchasing power parity of $44,370 per person.  In fact, the top of the list is dominated by the wealthiest.  Clearly, the argument that low wages cause trade deficits doesn’t hold water.  If anything, the cause and effect is exactly the opposite.  Running large trade surpluses makes nations wealthier.
  • There is one nation on this list that is a net oil exporter – Mexico.  I point this out because oil is priced in U.S. dollars, and every dollar spent on oil produced by foreign countries must be repatriated to the U.S., since that is ultimately the only place where they are legal tender.  Those dollars are repatriated in several ways, primarily through the purchase of American bonds or through the purchase of American goods.  The latter tends to make net oil exporters strong buyers of American products, which usually means that the U.S. enjoys a surplus of trade in manufactured products with such nations.  But not Mexico.  What this means is that the large trade deficit in manufactured goods that we have with Mexico is actually even worse than it appears.  For a nation whose population density is one of the lowest on the list – less than twice that of the U.S. – it means that something beyond population density – such as some unfair trade practice – is at work here.  Ditto for Ireland, which has fashioned itself into a tax haven for manufacturers, virtually bankrupting itself during the “Great Recession” of a few years ago.

If you are seeing such data for the first time, it may be a little early, based on this data alone, to conclude that population density is the driving force behind trade imbalances.  More proof is needed.  If such a relationship exists, then we should see exactly the opposite at the other end of the spectrum.  We should see a list of America’s best trade partners – those with whom we have trade surpluses – loaded with nations with low population densities.  We’ll take a look at that list in my next post.

If you’re already acquainted, however, with the relationship between population density and trade imbalances, which I explored thoroughly in Five Short Blasts, then this data is just further proof that population density is, in fact, the driving force behind these trade imbalances.  Such deficits are inescapable when applying free trade theory, which fails to account for large disparities in population density, to such nations.  It will only get worse with each passing year, exactly as we have seen.

 


Pace of Growth in U.S. Trade Deficit with China Unabated in 2015

May 2, 2016

America’s trade deficit in manufactured goods with China continued to worsen in 2015 at the same pace that it has since China was granted MFN (most favorable nation) status by President Bill Clinton back in 2000.  This is in spite of the fact that wages in China have nearly quadrupled and the yuan has risen in value by 36% during that same time frame.

Here’s a chart that shows how the deficit has worsened by 367% since 2001:  China.  On average, our deficit with China has worsened at a rate of nearly 10% per year.  In 2015, it grew by yet another 6%, now reaching a staggering total of almost $388 billion.  Assuming that 2/3 of the cost to manufacture products is labor, and assuming that those jobs would pay an average of $50,000 per year, that’s a loss of 5.2 million manufacturing jobs from the U.S. economy.  It also accounts for most of the federal budget deficit in 2015, since the federal government is forced to run a budget deficit to make up the money that is drained from the economy by the trade deficit.

In fact, going back to 2001, the cumulative trade deficit in manufactured goods with China now totals $3.77 trillion.  That’s about 20% of our total national debt.

Free trade advocates would have you believe that such trade deficits are the result of a couple of factors:  low wages and/or currency manipulation – the practice of keeping a nation’s currency valued artificially low in order to make its exports cheaper and to make the exports of other nations more expensive for their own citizens.  Why do they want you to believe these things?  Because it leads one to believe that, over time, as wages rise in that country, the trade deficit will correct itself and, if we just shame that country into ending their manipulation of their currency, free trade will work as it should.  Either way, they want you to believe that free trade will work if we just give it enough time.

But the data speaks otherwise.  First of all, regarding the “low wage” argument, here’s a chart that shows how the Purchasing Power Parity (or “PPP” – analogous to wages paid) for Chinese citizens has grown since 2001 vs. the trade deficit:  China PPP vs deficit.  As you can see, the wealth of the Chinese has grown from $2,616 per person in 2001 to $14,300 in 2015.  That latter figure is now greater than the income of Americans who earn minimum wage.  In other words, the Chinese are rapidly catching up to wages in America.  But that hasn’t reversed the course of our trade deficit with China.  It hasn’t even slowed down its growth.  If there was any validity at all to a relationship between low wages and trade deficits, we should at least have seen some effect by this point.  There is none.

What about the effect of currency valuation?  Check out this chart:  China Xch rate vs deficit.  In 2005, the Chinese agreed to begin to let their currency rise in value.  By 2015, it had risen from 8.27 yuan/dollar to 6.09.  But there’s been absolutely no impact on the worsening pace of our trade deficit.  Even these two factors -rising wages and a rising Chinese currency – working together have had absolutely no impact on the pace at which our deficit with China continues to worsen!

There is no impact because neither of these factors play any role in determining the balance of trade.  Currency values don’t determine the balance of trade.  Instead, the opposite is true:  the value of China’s currency is rising because of China’s huge trade surplus.  And wages are soaring in China for the same reason.

The trade imbalance exists because of the huge disparity in population density between the U.S. and China.  China’s severe over-crowding limits their potential for personal consumption, emaciating their potential as a market place for U.S. exports.  But they are every bit as productive as American workers.  The result of attempting to trade freely under such circumstances is inescapable – an enormous trade deficit.

The only possiblity for restoring a balance of trade with a nation like China is to abandon free trade theory – a theory that doesn’t take into account the role of population density in driving trade imbalances – and adopt the use of tariffs to compensate the U.S. for China’s inability to provide access to a market that is equivalent to our own.  Nothing short of that has any chance to restore a balance of trade and avoid the U.S. being driven further toward bankruptcy.


Per Capita GDP Contracts in 1st Quarter

April 29, 2016

Recessions are determined by two consecutive quarters of contraction in the nation’s Gross Domestic Product, or “GDP.”  But what if the GDP grows, but more slowly than the growth in the population?  In that case, your share of the economy has shrunk, as it has for every American, and it’ll feel like a real recession to you.  So that’s how recessions should really be defined – in terms of per capita GDP.

By that measure, the next recession may very well already be underway.  Though GDP grew in the first quarter, though by a paltry 0.5% (as announced yesterday by the Bureau of Economic Analysis), per capita GDP actually contracted by 0.2%, thanks to the population growing at an annual rate of 0.8% in the same time period.

This is the 2nd time in four quarters that per capita GDP declined.  It happened in the same 1st quarter time period last year, falling by 0.2%.  The difference is that last year the economy was already beginning to rebound by the end of the first quarter as we emerged from an extremely harsh winter.  This year, the economy stalled in spite of relatively mild weather and, with the first month of the 2nd quarter already behind us, the economic slowdown appears to be intensifying.

This stagnating of the economy isn’t just a one or two-year phenomenon.  It’s been developing for a long time now.  During the 8-year period beginning with the 1st quarter of 2008 (just before the onset of the “Great Recession”), per capita GDP grew at an annual rate of only 0.5%.  (Check this chart:  Real Per Capita GDP.)  During the 8-year period prior to that (2000-2008), it grew at an annual rate of 1.4%.  And during the 8-year period prior to that (1992-2000), it grew at an annual rate of 3%.  Though the economy continues to grow, albeit ever more slowly, in terms of GDP, per capita GDP has essentially ground to a halt.

This is exactly what the inverse relationship between population density and per capita consumption would predict – that eventually over-crowding would erode per capita consumption to a point where per capita GDP would actually begin to contract.  That’s exactly what we see happening now.  Though we continue to lean as heavily as ever on population growth to stoke the economy, that strategy has begun to backfire. We are all becoming worse off as a result.  It’s time for economists to wake up to the fact that this blatantly-flawed economic strategy is doomed to failure – that population growth has become a drag on the economy.