Gary, I don't know whether it's so obvious that governments never disengage.
According to some measures at least the US government hasn't much grown.
The ratio of All Government Employees to Total Nonfarm Employees rose to 19.5% in 1970, but then, instead of rising and rising, fell steadily to 15.5% in 2000. Right now it's at 16.5%.
Current expenditures by the Federal government has also been basically steady relative to GDP.
Of course, some of these data are specious. Government expenditures exclude transfers, implicit and off-balance sheet commitments, underfunded liabilities, etc.
But the point is that not all governments grow to take over the economy and the US government is one example of a relatively tame sovereign.
I think at least some psychologists and economists will disagree with you that relative wealth/income is irrelevant. It seems at least somewhat relevant, actually, though the literature, as always, is inconclusive.
Not to get hung up on details, but in this case it might matter. A few Chinese officials and several economists have expressed concerns that Chiense GDP numbers just aren't very reliable and other measures merit more attention.
Where does China stand on those?
And how much below 7.6% does "actual" GDP growth need to be to merit a change of course?
I think at least some do not accept it because of (1) skepticism towards the extent to which people actually consume out of current income vs. permanent income and (2) because government spending via borrowing would reduce future income via taxes (this is related to (1) in a fairly obvious way I guess).
Then of course we have all the more unique considerations of the present, including hysterisis, the decline in collateralizable assets (which the gov't can alleviate by selling more Treasuries, ceteris paribus, although I still don't at all understand how this would work in theory), the liquidity trap and all the other factors that change the arithmetic in ways I haven't yet fully understood.
Hmmm, I suspect actually that income inequality in North Korea is absolutely monstrous. Based purely on intuition, I'd imagine that almost all the wealth in that country belongs to maybe 10 or 20 people.
If anything, then, North Korea is a terrifying example of how unfair rent extraction and wealth redistribution by the few can decimate a society.
Hopeless Unemployment
Gary, I don't know whether it's so obvious that governments never disengage.
According to some measures at least the US government hasn't much grown.
The ratio of All Government Employees to Total Nonfarm Employees rose to 19.5% in 1970, but then, instead of rising and rising, fell steadily to 15.5% in 2000. Right now it's at 16.5%.
Current expenditures by the Federal government has also been basically steady relative to GDP.
Of course, some of these data are specious. Government expenditures exclude transfers, implicit and off-balance sheet commitments, underfunded liabilities, etc.
But the point is that not all governments grow to take over the economy and the US government is one example of a relatively tame sovereign.
The Bad Society
I think at least some psychologists and economists will disagree with you that relative wealth/income is irrelevant. It seems at least somewhat relevant, actually, though the literature, as always, is inconclusive.
http://ibe.eller.arizona.edu/docs/2010/Martinsson/happiness_jel_2008.pdf
http://www.economics.uci.edu/~mcbride/RelativeIncomeEffectsSWB_JEBO_2001.pdf
Who knows?
How Should China Respond to the Slowdown?
But is it 7.6%?
Not to get hung up on details, but in this case it might matter. A few Chinese officials and several economists have expressed concerns that Chiense GDP numbers just aren't very reliable and other measures merit more attention.
Where does China stand on those?
And how much below 7.6% does "actual" GDP growth need to be to merit a change of course?
Hopeless Unemployment
I think at least some do not accept it because of (1) skepticism towards the extent to which people actually consume out of current income vs. permanent income and (2) because government spending via borrowing would reduce future income via taxes (this is related to (1) in a fairly obvious way I guess).
Then of course we have all the more unique considerations of the present, including hysterisis, the decline in collateralizable assets (which the gov't can alleviate by selling more Treasuries, ceteris paribus, although I still don't at all understand how this would work in theory), the liquidity trap and all the other factors that change the arithmetic in ways I haven't yet fully understood.
The Bad Society
Hmmm, I suspect actually that income inequality in North Korea is absolutely monstrous. Based purely on intuition, I'd imagine that almost all the wealth in that country belongs to maybe 10 or 20 people.
If anything, then, North Korea is a terrifying example of how unfair rent extraction and wealth redistribution by the few can decimate a society.