Time Based Product Affects Aggregate Demand

To what extent does time based product, bear responsibility for lost aggregate demand? This matters, in that high skill services product now requires more revenue and investment, than actual output can readily account for. What we don't know in this regard, continues to translate into increased debt loads as well, for the hidden costs of human capital.

Yet it is no simple matter, to determine the degree to which high skill time based product could be reducing either marketplace output, or potential labour force participation. Even though knowledge capture means less production and consumption of time based product than would otherwise be possible, this "lost demand" factor - due to existing supply side limits - is only part of the story.

Today's organizational patterns for time based product are not only incomplete, but they also turn what could have been discretionary consumption, into non discretionary consumption requirements. Yet it is discretionary income which has the potential to expand the marketplace, thereby generating additional (sufficient?) revenue for non tradable sector activity.

If full marketplace representation was actually in effect for non tradable sector activity and its corresponding non discretionary income, such income diversions might not be so problematic. However, the fact that more revenue is gradually being required for what is still translating into less non tradable sector output, is effectively a reversal of long term progress.

High skill time based product, also serves as a specific geographic and time oriented marker, which in some instances affects how much economic activity occurs within specific time frames. Consequently, the non tradable spatial element, means product formation which is of a more fixed nature than what occurs through tradable sector organizational patterns, given the fact tradable sector activity is not time or geography dependent.

In order for tradable sector activity to provide a sufficient counter to the fixed points (and revenue relationships) of non tradable sector activity, tradable sector organizational patterns need enough dominance so that aggregate demand is not ultimately lost to the insufficient supply structures of non tradable sector product.

Fortunately, there are organizational means which could diminish these spatial limitations, in both time based services, and the housing assets which are now following high income levels too closely. A different approach is needed, to generate new growth beyond the non tradable sector activity which is responsible for excessive limits on aggregate demand.

Even though demand constraints on time based product are problematic for consumers, they are responsible for other pressing concerns as well. Not only have these non tradable sector limits encouraged central bankers to scale back on potential long term growth, they also contribute to serious budgetary issues at the national level. Bottlenecks in both time based product and housing, are translating into further difficulties for Republican policy makers, who are still attempting to subsidize both. In an article for Bloomberg, Michael Strain writes:

The way to keep critics from assuming the worst about your intentions is to say exactly what you want to do.

Alas, saying what government actually means to do is difficult, especially a national government which is compelled to offer something for everyone who is in a position to give back. Nevertheless, governments now face their own extensive non discretionary budget requirements, which include heavy doses of 20th century quality standards for input driven time based product.

These 20th century requirements have gradually become less affordable for the 21st century, especially given the fact of economic stagnation. Granted, no one wants to take away superior quality product, when and where it remains possible to provide. Just the same, why not begin the process of building new forms of quality product which are less budget dependent, so that time based services will not have to make such extensive future claims on aggregate demand.