News outlets have recently been discussing underfunded pension funds. This discussion has been well timed given a recent concern of mine regarding macroeconomic policies. I have been questioning why it is that deflation and slow or no growth economic periods are so harmful to our economy, but more so why must macroeconomic policy always be pushed as expansionary? I don't understand why we must push for greater and greater growth than can be achieved without government intervention. The way I see it, expansionary policies are a form of economic leverage. For example, as opposed to having economic growth of 1%, expansionary policies leverage this growth to 3.5%. Why must a nation constantly force greater growth, as opposed to allowing organic expansion?
I cannot see how any form of "macro-management" can go on forever, there must be a point at which economic policies cannot continue to support unsustainable growth rates. The US may be good modern example of when expansion works for a time, but will eventually be unsustainable. One would be hard pressed to find someone who believes that the US can continue to borrow to finance its economic expansion, as that is what all the borrowing is for. Yes, the US borrowed to stabilize its economy, but nonetheless this was to prevent economic contraction, but why not allow things to run a more natural course. Although I am a firm believer that the economy needed to be buoyed during this crisis, I do not see sustainability in constant expansionary policies.
