Karl Denninger crunches the numbers: in the last 8 years, US GDP has increased by $14 trillion, but debts by $23 trillion, so effectively accounting for all the GDP growth in that time and still leaving a deficit of $9 trillion...
... we haven't had an expansion in GDP over the last eight years. Congress and its organs of reporting economic "facts" have lied. We have in fact actually seen about a 10% contraction in real GDP from 2000 levels; all of the so-called "expansion" of the Bush Administration has been a lie intended to prevent recognition and working through of the recession that should have happened in 2000.
Now, I sensed this during the last 8 years and felt it coming before then, and have recently said so several times. I'm only grateful that technical whizzes like Karl have managed to spell it out. If only we had taken our lumps after the technology bust of 2000.
1 comment:
A very enlightening post. I had never considered the fact that any GDP growth based on borrowing to consume (rather than borrowing to invest in productive assets) is entirely bogus. And will disappear once the fuel of more and more debt is removed. So that is why the economy is falling off a cliff. GDP is going to have to go back to a level that can be sustained by our earnings not our borrowings. That's a scarey thought for the UK - we make next to nothing.............
Post a Comment