Some Poor Chump Is Always The Last To Get The Word

Joe Doakes from Como Park emails:

The US economy grew in the first quarter of 2016, but only a tiny bit, 0.5%.  That’s technically enough to keep us out of a “recession.”

 First, do you believe that number?  Economic estimates are routinely announced with pronounced spin showing how well the administration’s policies are working, then quietly revised downward a few months later.  There’s not much room to revise this number downward.

 Second, look at the formula for calculating GDP: 

Gross Domestic Product = Consumption + Investment + Government Spending + (Exports – Imports)

 If the federal government wants the GDP number to look good, it can manipulate the result by increasing government spending to offset decreases in Consumption, Investment and Net Exports.  But federal government spending slowed down in the first quarter as Quantitative Easing winds down.  And the GDP number is falling as a result.  The implications are important.

 It means there never was any growth in the Consumer or Investment side of the economy, that’s all been propped up by federal government spending.  In other words, we’ve been experiencing negative economic growth for months, maybe years, but it’s been masked by federal government spending.  I’m looking at you, Barack Obama, and your $20 Trillion national debt.

 The take-away is simple: don’t worry about Great Depression 2.0 coming; it’s already here.  Worry about what happens when the ordinary public figures it out.

 Joe Doakes

Look!  Bathrooms!

3 thoughts on “Some Poor Chump Is Always The Last To Get The Word

  1. Mitch, have you been visiting Deja vu? This post was already posted previously in the past.

  2. Yep, a repeat.

    Contrary to what many think, during Great Depression 1.0 you did pretty well providing you had a job. If you lost that job you were finished, but those with jobs did ok.

  3. What Nerdbert says. My grandfather had a good job in the Depression working as an engineer for Commonwealth Edison in Chicago, and he took good advantage of how much capital those dollars he was earning would buy.

    Really, anyone with dollars saved up that they could access did OK, so the big killers were debt in a deflationary spiral, job loss, and bank failures. My best guess is that in these days, we’ve got a very similar situation to what the nation had around 1937. Hopefully we get a better path out of GD2 than what pulled us out of GD1.

    Another similarity of then to now; can’t trust government statistics any further than one can throw the politicians.

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