Monthly Archives: June 2008

In America, as in much of the developed and developing world, achieving a high economic growth rate has been considered the way to achieve prosperity and riches. Nations and companies compete with each other to see which can grow the fastest. Growth is so important to most of us that it is taken for granted as a goal that must be pursued.

Recently the US has been lagging behind countries like China, Russia, Brazil, and India, whose economies are growing almost ten times as fast as the revised 1% GDP first quarter growth rate released this week by the US Department of Commerce. There is great concern in the US that the US economy is already in or soon will be in a recession. The Fed is hard at work trying to prevent a recession and in fact is hoping for a faster rate of growth. Americans think that the economy should always be growing.

The US economy is still the largest in the world but China is closing in fast. By the year 2020 or so the Chinese will likely have the largest economy in the world. Russia, India, and Brazil are expected to maintain growth rates from 7% to 10% a year. Middle class citizens in China and these countries are growing by leaps and bounds.

And that is part of the world’s problem today isn’t it? With over six billion people on planet earth and with countries with huge populations, like China and India with their over one billion each populations, making intense efforts to rapidly expand their economies, the combination of rapidly growing populations and high economic growth is pushing up against the earth’s ability to support the growth rate.

The high demand for limited supplies of key commodities, like crude oil, has set off a worldwide inflation that is highly disruptive to poor and middle class populations and to governments everywhere. The push for high growth and the resulting enlargement of middle class populations is placing a burden on food and commodity supplies that is feeding into this inflation.

In addition, high growth rates often come at the expense of the environment. For example, in China, the need to provide electricity has lead to the use of coal as never before. The Chinese are opening new coal fired electricity generating plants at the rate of two a week. The resulting air pollution is a serious problem for China as well as the rest of the world as tremendous amounts of greenhouse gases are released into the atmosphere.

It hardly seems fair for highly developed nations, like the US and the UK, to try to prevent China and other nations from using coal and large amounts of other other commodities to help to fuel their growth. After all, the US and the UK went through high growth cycles as well with serious damage to the environment occurring. The US is still the number two air polluter in the world, having been recently knocked out of the number one position by China.