Can Governments make economies grow?

[Hamloc]

During our last election there was a great deal of debate on how governments can stimulate the economy and the Liberals were elected in part because of their promise to go into debt to do just that. In the first week of 2016 we have seen one of the most government controlled economies in the world fall flat on its face in China. In Canada the head of the BOC has come out and pronounced there is nothing we can do but ride it out. What is the government's roll in the economy?

[tweety]

Stay out of the way when times are good.

[farmaholic]

Will someone pound it through my thick skull how it can be expected for economies to grow at any rate indefinitely? Then everyone has a shit fit when it stalls or recedes. ....I realize the importance of it but can't understand why people lose their minds when it happens. Maybe its necessary to have a reset every once in a while.....or more often.

[ajl]

No governments can't create long term growth. They can fuel bubbles and make things worse but they can't raise the standard of living. If the government had not dropped the $Cdn last year, how profitable would your farm been? Subtract about 10% from the top line to answer that. Problem is that the low dollar raised the cost of production for 16.

[errolanderson]

maybe the bigger question is;

Can Governments make economies shrink?

[farming101]

If government can't provide an environment where people
are happy and content they have failed and sooner or later
the economy will fail.
A philosophical view? Sure. But really is it that for away
from what individuals really want?
I always liked this story. There are a million variations but
the message is always the same. Here is the Mexican version:


An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “only a little while. The American then asked why didn’t he stay out longer and catch more fish? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.” The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “15 – 20 years.”

“But what then?” Asked the Mexican.

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”

“Millions – then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

[Hopalong]

Have considerable respect for economists like Errol and ones who work with Economist magazine.
Also for ones who advise American government and seem to be at odds with first group over lower interest rates benefit.
Wonder about longer term effectiveness of governments in manipulating consumer confidence and on spending and saving patterns.
Those who have lived in countries that have had runaway inflation have more fears about it than those who have not.

[sumdumguy]

Creating enterpreneurs-that's where wealth is created an economies grow - There is an important role that governments can play in stimulating young minds and fostering a mindset in young people to be entrepreneurial. A lot of that mentality comes from the home but many great minds had the seed planted in other places like the school, mentors or projects. Government should pay schools whatever the cost to get clubs going, name young entrepreneur of the year, pay employers to hire these kids in the summer and after school and show them them how to run a business.Plant that seed early in kids minds. Mentor the powerhouses. When has government last asked for ideas from the public to answer these questions? Ralph can do it.

[cottonpicken]

If it worked we would all be speaking Russian.

[cottonpicken]

The proper term for what is happening now is command and control.

[bucket]

China's growth was bound to stop when they put a limit on the number of children a family can have.

By reversing that decision will make their economy restart. There will be a lag but it will grow again.

Canada is sort of screwed because we have an aging population. People don't want 5 kids to grow the population which creates growth.

We have resigned ourselves to be an export driven economy. Limits growth.

If canada had 100 million people would we be having this conversation?

[farmaholic]

Governments stimulating the economy is like your Missus getting breast implants... It will stimulate your "interest" for a while until the novelty wears off. Then they will have to find the next stimulus to pique your interest. All unnatural growth. If it ain't going to happen on it's own will the end result ever be what you hoped for? Or do you have to keep adding "stimuli".


Family size. my goodness, who would want to crimp their lifestyle with more than two kids, besides raising kids costs money. Sad state of affairs when a society can't even maintain itself because of birthrate...what does that tell you. If you and the Missus never had more than two kids... you've only replaced yourselves. No wonder we have to rely on immigration to sustain ourselves. Hard for the population to grow when too many unemployed young men are living in their parent's basements living in a fantasy world gaming and living off their parents. And all the "stimulus" they need is on the internet a mouse click away. Society is broken...

[TOM4CWB]

China Pigs Addicted to Foreign Feed as Crop Imports Surge: Chart
Alan Bjerga
January 6, 2016 — 12:26 PM MST

China, the world’s largest pork-consuming country, has largely abandoned a goal of self-sufficiency when it comes to feeding the pigs, cattle and poultry needed to satisfy growing domestic demand for meat.

Last year, China’s negative trade balance in feed-related commodities for livestock rose to a record 88.4 million metric tons, according to United Nations data. Imports and exports were mostly balanced until a decade ago, when economic growth and demand for protein surged. China alone will account for 64 percent of the world’s soybean imports in the year that began in September, U.S. Department of Agriculture data show.
“China can do anything it sets its mind to, but it can’t do everything,” said Gary Blumenthal, chief executive officer of World Perspectives Inc., a global agriculture consultant in Washington. “It doesn’t have the arable land to produce everything it needs, so feed is an area where they’ve accepted dependence on imports.”

China is also short of water... also a bigger problem.

[MBgrower]

Govts only get in the way. When they claim they will grow the economy what they are really saying is that they will try get in the way less. Greg selinger truly believes he is responsible for any signs of econokic growth in mb. What a fool.

[LEP]

If governments created growth that would be like the perpetual motion machine.

But they havent figured that out yet.