[jhaglund]

If we can have an increasing GDP while most of America experiences stagnation (as with the recent recovery) who's to say we can't have decreasing GDP coupled with improving quality of life? (at least for a short period) As you point out, machines are doing far more of the work that workers once did.

Another policy of FDR's New Deal was the creation of the 8 hour day (many people still worked 12-14 hour days until then: http://en.wikipedia.org/wiki/Eight-hour_Day#United_States). Perhaps reduced hours allowed more laborers to move into the workforce, and could be a more competitive and cheap way of supporting a broad middle class.

[yummyfajitas]

Most of America has not experienced stagnation. They have experienced a consistent increase in employment compensation and a consistent increase in consumption.

http://research.stlouisfed.org/fred2/series/ECICOM

http://research.stlouisfed.org/fred2/graph/?g=qG0

The only "stagnation" that has occurred has been a shift in compensation from taxable wages to untaxed non-wage benefits.

The fundamental problem is that with a drop in labor we will have fewer goods and services. No matter how you slice it, that's a drop in (real, not necessarily nominal) consumption.

[jhaglund]

What about this labor drop? http://research.stlouisfed.org/fred2/series/CIVPART?rid=50&s...