So here’s a little insight that one can only get from living in Europe after having lived in the US/Canada, which is this: In the US/Canada, you have much more house per family; I’ve seen the statistics; it’s roughly double the square footage on average in the US.
This has a number of hidden effects that I don’t think that many economists plug into their primary equations. In Holland, the houses are really small indeed, almost everyone lives without appreciable yards. We stayed in the townhouse of this wealthy yuppie couple with a baby, and they had literally no garage, and one single storage closet. The dude’s only tool area was one single toolbox stored in the cupboard where the brooms and cleaning stuff were stuffed.
So the point is that this dude cannot de facto be in the market for lots of dudely stuff, such as wheelbarrows, lumber, metal poles, chainsaws, giant tool benches, riding mowers, and a whole host of other things which for decades every middle-class American male took for granted as being part of his lifestyle. Just think of all the things which the average American consumer buys to fill up their garage space, their toolsheds, etc. All of these things there is a huge market for in the U.S., and this in turn stimulates the economy.
In Europe, they literally do not have space for more than a few smallish carpets, a few lamps, one or two framed pictures, etc., and so there is little market for this, meaning that buying things, even for an uppery middle-class couple, is a relatively rare event. Because normal household goods are de facto luxury items, every single household thing is ridiculously expensive. This is why anywhere outside of Ikea, you pay through the nose for these things. There are no ‘discount’ furniture places in Europe; no deals, no bargains. Everything is full price, all the time, think department store prices at best, absolutely not on sale, ever. And outdoor lawn things are only for the super rich, and so they are accordingly luxury items, priced 3-4x what they are in the states. Even fencing over here is astronomically expensive. Our chicken wire was a Euro.33/foot for 50cm high stuff (it was 12 Euros for for 3 metres!!!!). That is crazy. And so the economy here is stagnant, in part because no one buys stuff, because they have no space for it, which ensures that no one makes anything, and therefore the prices are super high, so no one buys anything!!
So, the point being, another plank in our ideal economy should be: everyone should have big homes and yards. This keeps people in the market for more stuff, to fill their space, and besides, this gives them space to do, say, hobbies!!!! YOu can’t have a pottery kiln in holland, or a metal shop, a machine shop, a garage even for your sports car, space for your boat, etc. One of the great, hidden, obvious advantages of the US is that until the 1990s, so many people had space, the middle class had space that is, and plenty of it, to pursue whatever hobby they wanted. Manufacturers saw this demand, felt it, and so they created products which were priced so that the middle class could pursue sailboating, music studioing, art studioing, and all those sorts of things which make life interesting and also make for a vibrant and varied economy. Over here, there are no sewing stores even – my wife has to pay 18 Euros for a yard of fabric! No joke. There are no discount women’s hobby stores, etc. You always pay full price and then some, all the time. This makes European life much much more dull than American life – there is no real way for middle class people to pursue many hobbies, both through lack of space, and through exorbitant prices. So between this and the monopolistic rigid way of regulating business, this helps to keep the European economy sluggish. The answer then: lower population density, build big houses, and force developers to stake out big yards, like they had in the US in the 70s. No family should have less than 1/3 of an acre. This way, the lessening demand from lowering population will be more than made up for by individual citizens with more to spend, and more space to fill up!!!