A fascinating graphic was recently produced by Oxford Economics showing compounded economic growth rates over time.
What should immediately jump out at you is that the compounded rate of growth of the U.S. economy was fairly stable between 1950 and the mid-1980s. However, since then, there has been a rather marked decline in economic growth.
The question is, why?
This question has been a point of a contentious debate over the last several years as debt and deficit levels in the U.S. have soared higher.
Causation? Or Correlation?
As I will explain, the case can be made the surge in debt is the culprit of slowing rates of economic growth. However, we must start our discussion with the Keynesian theory, which has been the main driver both of fiscal and monetary policies over the last