Paragraphs to Ponder

From Bloomberg BusinessWeek:

"A main cause of the current decline is slower growth in economic efficiency -- that is, in the amount of output yielded by given inputs of capital and labor. In recent decades, so-called total factor productivity in the U.S. has increased by less than 1 percent a year, well under half as quickly as in the 50 years to 1970. And during the past several years this measure of productivity has grown at a crawl, rising less than 0.5 percent a year.

Robert Gordon describes four current "headwinds" in "The Rise and Fall of American Growth." First is demographics: The labor force is growing more slowly, which means slower growth in output. Second, growth in the 20th century was powered by rising numbers of Americans completing high school, a one-time transition that's over. Third, globalization tends to worsen inequality -- within the U.S. at any rate -- by rewarding the highest-skilled workers and owners of capital more than the moderately skilled or unskilled who make up most of the population. Fourth, public debt has risen and will have to be serviced; in due course that's likely to mean higher taxes."