US learning lessons from S.Korean economic crisis

[powerfulguy]

Lessons Learned, South Korea Makes Quick Economic Recovery
http://www.nytimes.com/2011/01/07/wo...a/07seoul.html

The world is paying attention to president Lee Myong bak's remark that "US needs to learn from South Korea for economic recovery." US NYT covered South Korea's recovery from its economic crisis in detail on January 6th.

:)

[gunnut]

One such lesson, they say, is to avoid relying too much on stimulus spending and to make painful structural changes so that the economy can find its natural bottom and resume its growth. Another is to make the changes quickly and decisively to restore the public’s faith.

Well...duh...I could have told you that.

What did we end up doing? porkulus? porkulus 2? bail out GM to save the unions and screw the investors? Obamacare? the so called "consumer credit protection act" or some bullshit like that? cap and tax failed so EPA will destroy our industry by fiat?

Obama will go down in history as the worst president in the last 100 years.

[DOR]

South Korea reported 1.9% real growth year-on-year in the fourth quarter of 2012, up one-half point from Q-3’s 1.4% growth rate. For the full year, the economy expanded 2.06%, the second slowest pace since the 1997-98 Asian Financial Crisis. Korea scratched out a 0.21% rise in 2009.

Capital investment fell for the second straight year, and the fourth out of five since 2008, by 0.97%. Domestic demand remained sluggish, rising less than 0.3% after 2011’s 0.2% contraction. Private consumption, about 63% of domestic demand (and 51% of GDP) rose 2.1%, down from the previous year’s 3.7% pace.

The Korean economy was worth US$1.27 trillion in 2012.

[RollingWave]

Average GDP % growth 2000-2007
Korea : 5.175
Taiwan: 4.42
USA : 2.61

Average GDP % growth 2008-2011

USA: 0.2 (-2.4% )
Korea : 3.125 (-2.05%)
Taiwan : 3.43 (-0.99%)

Well I guess you can say that South Korea did do better than the US, that's not saying much though given that enough people here think Ma has totally screwed Taiwan's economy as well despite general evidence to the contrary. (of course part of that is because he campaigned on 6% growth pre collapse, he did manage 10% for 2010 though )

(data source, World bank for USA and Korea, Taiwan stats bureau for Taiwan's)

[RollingWave]

For fun, a couple more comparison

2000-2007

UK: 3.15 (no stimulus , a lot of austerity cuts )

Singapore : 6.36

China : 10.51 (did do stimulus)

2008-2012

UK : -0.6 ( -3.21)

Singapore : 5.1 (-1.26)

China : 9.58 (-0.97 )

It should also be noted of course, that even assuming no financial crisis, no one sustains 10%+ growth forever, so China was likely to have came down anyway....

The UK is also a decent example of what a non-stimulus US probably would look like, albeit they didn't really fix underling issue, but I doubted that POTUS McCain could have done that as well.

[Monash]

China : 9.58 (-0.97 )

It should also be noted of course, that even assuming no financial crisis, no one sustains 10%+ growth forever, so China was likely to have came down anyway....

China's low birth rate and the imminent decline in the number of persons of working age guarantee an end of it's double digit growth phase within the next 10-15 years if not sooner.

[RollingWave]

China's low birth rate and the imminent decline in the number of persons of working age guarantee and end of it's double digit growth phase within the next 10-15 years if not sooner.

that and the fact that by growing very fast your base gets larger very fast which makes sustaining that sort of pace impossible in the first place.

[Monash]

That plus I've always had my doubt about the "reliability" of some economic statistics produced by the Chinese government. What better way to prove to their own citizens adn the world the superiority of Party's economic policies than by "revising" the figures when expedient.

[RollingWave]

possibly, but unlikely by much, the evidence is clear as days (or smog, whichever you prefer )

[kyli]

When a typical rural household in China owns a TV, a refrigerator, a washing machine, and a computer, you know that China has reached certain income threshold. When we find out that car ownership takes off very rapidly in China, we know that this country per capita incomes has at least surpassed $5,000. Economic statistics is estimate and measure. Due to manipulation, constraint, and errors, statistics is never truly reliable.

[DOR]

China's low birth rate and the imminent decline in the number of persons of working age guarantee an end of it's double digit growth phase within the next 10-15 years if not sooner.

Now, where have I heard that before . . hmm.

Oh, I remember!

It was in 1992, when "everyone knew" that China's couldn't possibily, not in a million years, return to the multiple years of double-digit growth of the late 1980s.

[RollingWave]

Now, where have I heard that before . . hmm.

Oh, I remember!

It was in 1992, when "everyone knew" that China's couldn't possibily, not in a million years, return to the multiple years of double-digit growth of the late 1980s.

DOR:

it is true that the longer you do it, the harder it becomes to sustain it though.

That and the demographic still sooner or later be a big problem for them. and more and more it's sooner.

I'm more of the opinion that they'll probably continue at damn high growth for another decade or two, but after that they're potentially in big trouble, how big would of course depend on a lot of things.

[Skywatcher]

China's low birth rate and the imminent decline in the number of persons of working age guarantee an end of it's double digit growth phase within the next 10-15 years if not sooner.

It would probably decline in the next 10-15 years regardless of the birth rate.

[DOR]

DOR:

it is true that the longer you do it, the harder it becomes to sustain it though..

My wife says the same thing . . .

[Guest]

My wife says the same thing . . .

I hear certain Stimulus works wonders...just don't take too much.