Productivity slowing — bad news for budgets

Jan. 17, 2013

By John Seiler

Both the U.S. and California budgets depend on continuing economic growth. Gov. Jerry Brown has cautioned that his ambitious spending plan could fall apart if growth slows.

This just in:

“Global productivity growth has slowed for the second year running as weakening demand and innovation take their toll in developed and emerging economies.

“Annual productivity data from the Conference Board, a New York-based business and research organisation, will add to fears that economic growth in many countries may not recover to the rates seen before the financial crisis.

“Output per worker grew by only 1.8 per cent last year — the slowest pace for a decade, with the exception of the 2008-9 recession — as global economic expansion cooled more dramatically than employment growth.

“Improvements in labour productivity practically stalled in many developed economies and slowed significantly in leading emerging ones such as China, India and Brazil.

“In the US, output per hour increased just 0.2 per cent, making it one of the three slowest years for the country’s productivity growth since the second world war. The UK fared worse, with output per hour dropping 1.3 per cent — the same amount as in Greece.”

Looks like the “fiscal cliff” (really, fiscal fraud) “recovery” bill passed by Congress and signed by President Obama on Jan. 1 isn’t working.

Looks like Gov. Jerry Brown’s Proposition 30 plan to tax California into prosperity isn’t working.

Looks like avoiding a double-dip recession with more Federal Reserve inflation and zero-percent interest rates isn’t working.

Looks like socialism still isn’t working.