Despite the braggadocio about our economy, I haven't heard much to say that our productivity has increased by leaps and bounds lately. Actually, most of our economic strength is simply a reflection of the fact that there are more boomers in their productive years. In other words, each worker isn't producing more stuff, but there are more workers. The economy has no choice but to grow, but the standard of living for each person does not necessarily improve.
The only way to solve the economic problem is to improve productivity; and, the only way to improve productivity is through capital investment.
Most people assume that privatizers are looking to grab the loot that is being made in the stock market, blinded by greed to the risks posed by it. But that's not the point. I fully realize that there are risks. But the current system is stealing money away from investment and directing it towards the current consumption of those who are already well off.
So, how do we increase capital investment in order to foster productivity growth. The only way is to cut somebody's current consumption and to direct that cut to investment. Who is better able to bear a cut in current consumption so that capital investment can be increased? Do we cut current benefits and direct those savings to capital investment? Or, do we increase taxes and put that money into capital investment?
Who is better able to bear a cut in current consumption? That is the question no politician wants to face.
