Consumers Going Into Their Shells - WSJ.com

DELUSIONS VIS-A-VIS THE CENTRAL BANK: Consumers Going Into Their Shells - WSJ.com

Some of this points to the dilemma that the above-the-regression-line economies face - i.e. to stay above the line, you have to have something extra. It can be more investment (read: capital), more education, better coordination and management, etc. But, it has to be something. That's what 'above the regression line' means - a higher income and standard of living.

If the schools don't push to provide a better education and every wage earner has to support a retiree and welfare recipient, that just drags down the real/effective wage of the worker.

Meanwhile, in developing countries, the worker has no one but themselves to support.

Add in taxes on the capital creators income in one country, but not the other, one can see how additional capital is created in the country with less social spending.

Meanwhile, the delusion of developed country prosperity may well be being sustained by central bank printing.