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Thread: Is The U.S. Economy Really Growing? (Spoiler Alert: No!)

  1. #1

    Default Is The U.S. Economy Really Growing? (Spoiler Alert: No!)

    https://www.zerohedge.com/news/2018-...really-growing

    Authored by Peter Cook via RealInvestmentAdvice.com,

    Most people are aware that GDP growth has been lower than expected in the aftermath of the Global Financial Crisis of 2008 (GFC). For example, real GDP growth for the past decade has been closer to 1.5% than the 3% experienced in the 50 years prior to 2008. As a result of the combination of slow economic growth and deficit spending, most people are also aware that the debt/GDP ratio has been rising.

    However, what most people donít know is that, over the past ten years, the dollar amount of cumulative government deficit spending exceeded the dollar amount of GDP growth. Put another way, in the absence of deficit spending, GDP growth would have been less than zero for the past decade. Could that be true?

    Letís begin with a shocking chart that confirms the statements above, and begins to answer the question. The black line shows the difference between quarterly GDP growth and the quarterly increase in Treasury debt outstanding (TDO). When the black line is above zero (red dotted line), the dollar amount is GDP is growing faster than the increase in TDO. From 1971 to 2008, the amount of GDP typically grew at a faster rate than the increase in TDO, which is why the black line is generally above the red dotted line.

    Chart 1



    During the 1971-2008 period, inflation, budget deficits, and trade deficits varied widely, meaning that the relationship between GDP growth and TDO was stable even in the face of changes in other economic variables. Regardless of those changing economic variables, the US economy tended to grow at a pace faster than TDO for four decades. The only interruptions to the pattern occurred during recessions of the early 1980s, early 1990s, and early 2000s when GDP fell while budget deficits did not.

    The pattern of GDP growth exceeding TDO changed after 2008, which is why the black line is consistently below the red dotted line after 2008. A change in a previously-stable relationship is known as a ďregime change.Ē Focusing first on 2008-2012, the increase in TDO far exceeded GDP growth, due to an unprecedented amount of deficit spending compared to historical norms. Focusing next on 2013-2017, the blue line has been closer to the red dotted line, meaning that the dollar amount of GDP growth was roughly equal to TDO.

    If the pattern of the past was in effect, the black line should have been far above the red dotted line for most of the entire period of 2009-2017, because it would be expected that a recovering economy would have produced an excess of GDP growth over TDO. But that didnít happen. This article will not speculate on why there was a regime change. Instead, this article is focused strictly on identifying that a regime change occurred, and that few people recognize the importance of the regime change, which is probably why it persists.

    Taking a quick detour into the simple math of GDP accounting, the level of GDP is calculated by adding up all forms of spending:

    GDP = C + I + G + X

    In the equation above, C is consumer spending; I is investment spending by corporations; G is government spending; and X is net exports (because the US has become such a heavy net importer, X has been a subtraction from GDP since 2000).

    For context, at the end of 2017, the level of US GDP was $19.74 trillion, per the Bureau of Economic Analysis (BEA). Of that $19.74 trillion, the Congressional Budget Office (CBO) calculated that the US government spent $3.98 trillion, all of which counts toward GDP. In 2017 the government borrowed $516 billion, meaning that the government spent more than it received via taxes and other sources. The main insight in understanding how the government calculates GDP is that all government spending counts as a positive for GDP, regardless of whether that spending is financed by tax collections or issuing debt.

    Because deficit spending is additive in the calculation of GDP, it makes sense to compare the amount of deficit spending to the amount of GDP growth produced each year. The first four columns in the table below show the annual GDP, the annual dollar change of GDP, the total amount of Treasury debt outstanding (TDO) and the annual dollar change of TDO. Comparing the second and fourth columns, it is easy to see that the annual increases in TDO regularly exceed the increases in GDP.

    Chart 2



    The final column to the right shows the increase in TDO as a percentage of the annual change in GDP growth. When the ratio is greater than 100%, the increase in TDO is responsible for more than 100% of annual GDP growth. Reinforcing the message of Chart 1, the annual increase in TDO exceeded annual GDP growth in each of the years from 2008-2016. The only year in which annual GDP growth was greater than the increase in TDO was in 2017, possibly due to the debt ceiling caps, which have now been lifted.

    The cumulative figures are even more disturbing. From 2008-2017, GDP grew by $5.051 trillion, from $14.55 trillion to $19.74 trillion. During that same period, the increase in TDO totaled $11.26 trillion. In other words, for each dollar of deficit spending, the economy grew by less than 50 cents. Or, put another way, had the federal government not borrowed and spent the $11.263 trillion, GDP today would be significantly smaller than it is.

    It is possible to transform Chart 1, which shows annual changes in TDO and GDP from 1970-2017, into Chart 3 below, which shows the cumulative difference between the growth of TDO and GDP over the entire period from 1970-2017. The graph below clearly shows the abrupt regime change that occurred in the aftermath of the GFC. A period in which growth in GDP growth exceeded increases in TDO has been replaced by a period in which increases in TDO exceeded GDP growth.

    Chart 3



    Chart 4



    ...
    Full article on link.

    ---

    Everything is awesome!
    1776 > 1984

    The FAILURE of the United States Government to operate and maintian an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    You are Ron Paul's Media!

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.



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  3. #2

    Default

    I got in b4 Zippy showed up to say borrowing money is a very productive thing to do!
    'It ain't what we don't know that hurts us, it's what we "know" that ain't so.'--Will Rogers

    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

  4. #3

    Default

    The sky is always falling at Zerohedge. There is good debt and bad debt. Borrowing to expand your business- good. Borrowing to buy a home- good. Borrowing to acquire more skills so you can get a better job- good. Charging a latte at Starbucks and then only making minimum monthly payments- bad.
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  5. #4

    Default

    Quote Originally Posted by Zippyjuan View Post
    The sky is always falling at Zerohedge. There is good debt and bad debt. Borrowing to expand your business- good. Borrowing to buy a home- good. Borrowing to acquire more skills so you can get a better job- good. Charging a latte at Starbucks and then only making minimum monthly payments- bad.
    Why are you trying to change the subject from federal debt to personal debt?

    And are you trying to say none of the federal budget goes to latte? None at all?
    'It ain't what we don't know that hurts us, it's what we "know" that ain't so.'--Will Rogers

    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

  6. #5

    Default

    Quote Originally Posted by acptulsa View Post
    Why are you trying to change the subject from federal debt to personal debt?

    And are you trying to say none of the federal budget goes to latte? None at all?
    Common manipulation strategy.

    If the facts cant be disputed, then do something else. Try attacking the reputation of the source. Move the goalpost. Redirect the conversation away from the initial topic, even if the redirection is subtle. Next will be to present information contrary to any claims, but dont use contradicting information as a first move because the tactics also work by the opponent. Basically, he will try to present information from the Fed that factors back in the Federal Debt Insurance and claim thats the official number, despite that being exactly what is being questioned.

    Think of the tactics of lying this way. The first way to lie is to make a direct untrue statement. "The glass is on the table." The second way to lie is to exclude information. Say absolutely nothing about the glass what so ever and only talk about the table. It is much more difficult to find the excluded information than it is to have a set of information that can be checked. "Glass is on the table." Two subjects, glass and table. Its also a list. Check the glass and check the table. If the list is incomplete and only contains Table, nothing else would jump out at an average person to say "what about the glass?". An average person will think about the table and think that all needed information has been presented because there was never any mention to include the glass. Its a much more effective way of lying and much harder to spot.

    Heres an example intended to make the resulting math completely wrong.

    Circumference = Pi * 2 * Radius (correct)
    Circumference = Pi * Radius (incorrect)

    Excluding the multiplier for the number 2 is the lie. This is how Zippy and MSM lie. They exclude facts when directly challenging ideas. In this case, he "moved the goalpost" to talk about Personal Debt as opposed to National Debt.
    1776 > 1984

    The FAILURE of the United States Government to operate and maintian an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    You are Ron Paul's Media!

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.

  7. #6

    Default

    Quote Originally Posted by DamianTV View Post
    This is how Zippy and MSM lie. They exclude facts when directly challenging ideas. In this case, he "moved the goalpost" to talk about Personal Debt as opposed to National Debt.

    At least nobody can accuse him of not being nice.
    Truth is a social construct. 👁👁

  8. #7

    Default

    Quote Originally Posted by timosman View Post
    At least nobody can accuse him of not being nice.
    He tries to be polite because it reflects poorly on him / them when being disrespectful, which as an indirect result, compromises his credibility.
    1776 > 1984

    The FAILURE of the United States Government to operate and maintian an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    You are Ron Paul's Media!

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.

  9. #8

    Default

    Quote Originally Posted by timosman View Post
    At least nobody can accuse him of not being nice.
    Quote Originally Posted by DamianTV View Post
    He tries to be polite ...


    Yeah, it's funny how so many RPFers fall for Zip's "polite" con. They say, But, Zip is always polite!

    Have you ever met a con man who was rude?



    Quote Originally Posted by TheCount View Post
    ...I believe that when the government is capable of doing a thing, it will.
    Quote Originally Posted by Influenza View Post
    which one of yall fuckers wrote the "ron paul" racist news letters
    Quote Originally Posted by Dforkus View Post
    Zippy's posts are a great contribution.




    Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members

  10. #9

  11. #10

    Default

    Quote Originally Posted by TheCount View Post
    ....
    Ah, not bad! Our other Soros employee and "supporting member" pulls one from his bag of tricks!
    Quote Originally Posted by TheCount View Post
    ...I believe that when the government is capable of doing a thing, it will.
    Quote Originally Posted by Influenza View Post
    which one of yall fuckers wrote the "ron paul" racist news letters
    Quote Originally Posted by Dforkus View Post
    Zippy's posts are a great contribution.




    Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members

  12. #11

    Default

    Quote Originally Posted by NorthCarolinaLiberty View Post
    Ah, not bad! Our other Soros employee and "supporting member" pulls one from his bag of tricks!
    TheCount is unaware of the Nobility Clause in the constitution - https://en.wikipedia.org/wiki/Title_of_Nobility_Clause . Way to blend in.
    Truth is a social construct. 👁👁

  13. #12

    Default

    Quote Originally Posted by NorthCarolinaLiberty View Post
    Ah, not bad! Our other Soros employee and "supporting member" pulls one from his bag of tricks!
    I notice that your posting rate has slowed way down ever since Bolton cut funding for your program.

    You'll never find a new patron if your stats stay this low. Are you just hoping that he'll get appointed and then pick your team back up?

  14. #13

    Default

    Quote Originally Posted by TheCount View Post
    I notice that your posting rate has slowed way down ever since Bolton cut funding for your program.

    You'll never find a new patron if your stats stay this low.
    How is your search going?
    Truth is a social construct. 👁👁

  15. #14

    Default

    Quote Originally Posted by TheCount View Post
    I notice that your posting rate has slowed way down ever since Bolton cut funding for your program.

    You'll never find a new patron if your stats stay this low. Are you just hoping that he'll get appointed and then pick your team back up?

    I don't even know what you're talking about, but your paid posting program is right here.
    Quote Originally Posted by TheCount View Post
    ...I believe that when the government is capable of doing a thing, it will.
    Quote Originally Posted by Influenza View Post
    which one of yall fuckers wrote the "ron paul" racist news letters
    Quote Originally Posted by Dforkus View Post
    Zippy's posts are a great contribution.




    Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members

  16. #15

    Default

    Quote Originally Posted by NorthCarolinaLiberty View Post
    I don't even know what you're talking about, but your paid posting program is right here.
    Oh, it's no secret how it came to be that this forum was suddenly flooded with supporting members trashing Rand as 'impure', relentlessly promoting racism to a degree far beyond the infamous newsletters, spamming about Trump, engaging in rampant collectivism, distracting from their own trollery by calling everyone else on the forum trolls, and driving members away wholesale.

    Is it?

    Where has your personal buddy RonPaulMall been since the Bolton money stopped flowing? Not sharing a cubicle with him any more?

    Your house has turned to glass. Maybe you should reconsider the wisdom of continuing to throw stones.
    'It ain't what we don't know that hurts us, it's what we "know" that ain't so.'--Will Rogers

    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

  17. #16

    Default

    Quote Originally Posted by Zippyjuan View Post
    The sky is always falling at Zerohedge. There is good debt and bad debt. Borrowing to expand your business- good. Borrowing to buy a home- good. Borrowing to acquire more skills so you can get a better job- good. Charging a latte at Starbucks and then only making minimum monthly payments- bad.
    Which part of the US debt is good ?

  18. #17

  19. #18

    Default

    Quote Originally Posted by TheCount View Post
    Oh, I like that. That's good. Say no more, say no more.

    Yeah, the complete ignorance of what has become common knowledge is cute.
    'It ain't what we don't know that hurts us, it's what we "know" that ain't so.'--Will Rogers

    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

  20. #19

    Default

    Quote Originally Posted by TheCount View Post
    Oh, I like that. That's good.
    What I like better is your technique of diverting attention from yourself after you got caught trolling! Nice try, Soros employee!!
    Quote Originally Posted by TheCount View Post
    ...I believe that when the government is capable of doing a thing, it will.
    Quote Originally Posted by Influenza View Post
    which one of yall fuckers wrote the "ron paul" racist news letters
    Quote Originally Posted by Dforkus View Post
    Zippy's posts are a great contribution.




    Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members

  21. #20

    Default

    The Soros employee v. the Bolton employee.

    If you two can't get a room, you could at least start a separate thread.
    'It ain't what we don't know that hurts us, it's what we "know" that ain't so.'--Will Rogers

    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins






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