Gdp could be a useful tool, but it has been hijacked by the politicians into a propaganda ploy. How about sandy or katrina? The gulf oil spill? Are those 'increases' in production? Hardly, yet their expenditures are included in the gdp. Police, fire, military? Do they manufacture useful things? Things are made for them, but they do not, yet their costs are included. How about the massive growth of govt under obama? Was that from any real production in the country? No, yet the $1.2T added to the debt every year is viewed as a 'plus' in the gdp.
In essence, we have a phony number that is used to deceive, not enlighten. We are being conned with double accounting, deficit spending, & disaster relief into thinking the economy is growing. The only sector growing is the govt sector! That just drains the taxpayers more, & adds to the deficit!
But even if it is a flawed number, it can have some use as a trend analyzer. The current trend shows our growth of gdp as declining, while china is growing at a much faster rate, & will overtake us. We are doing nothing but shady accounting to 'fix' things, while they are actually manufacturing things, & growing the real economy. We are relying on govt & financial sector number juggling to give us an impressive number. But the real indicators, like trade balances, exports, imports, etc, are not really taken into account by the politicians, who always want a rosy picture displayed to elicit cheers from the deluded public & media.
How about combining imports & exports into a trade deficit number or rank? Want to know what countries rank in that dept? This is also from the cia world factbook:
So the cheers for the current us economy are based on shady accounting, & propaganda from the money jugglers we elected to deceive us. We ARE going downhill, & unless we make some drastic changes to our structural & ideological priorities, we will continue until we crash. Rosy projections of phony numbers will not do it. The dollar is inflating, & the rest of the world will start to dump them, causing more devaluation & inflation. Eventually, we will hit bottom, & when we're a 3rd world country, we can try to compete again with the top world producers, but the us won't be the big consumer then, driving the world economy. We're fading from that now, & even that is built on deficit spending & shady accounting. ...Printed money with no real gdp to back it.
How about the trade deficit?
Now, let's also consider the fiat money scam we have going. The people don't seem to have any problem with the govt printing lots of paper, arbitrarily putting value in it, & handing it out. It has worked for a while, mostly on our past reputation of having a solid financial footing. But that perception is fading, & it would not take much to pop the bubble. Like all bubbles, a currency one would bring on massive inflation like the world has never seen, since so much of the world is tied to the dollar. But that is changing, too. Illusion only lasts for a while. Eventually people catch on to the scam.
I have a problem using gdp as a valid indicator. It is somewhat useful as a trend analyzer, but overall, it includes deficit spending on govt programs, disaster relief, military, & other federal employees that do not produce anything. So it is false to use it as a 'production' indicator. But even if we use it, it shows the trend, which is still downward, which by any definition, is a decline.
If you look at wiki, using the cia world factbook data, they have the us at 157th, with a 1.8% real gdp growth rate.. not much to crow about. There are 156 countries with better growth in gdp numbers. 157th in a list of 218 is not very inspiring for the world hegemony. It is better than our trade deficit, though. We are dead last, there.
A favorite economic trick is to compare the skewed gdp number to public debt.. it used to work a little, but now even that doesn't fool anyone.
Oh, & let's not forget the public debt. At over $16T & growing, only a fool would think that this is sustainable. Obama has added $1.7T last year, & will probably exceed that this year. It has not worked through all of human history, & it won't work now. Bankruptcy is what we have to look forward to, if we do not get our fiscal house in order.
So the bottom line? America is in decline. Our finances are a mess, our currency is in a bubble, & our trade deficits are sending all our wealth & real value to other nations.
GDP: Government Deception Propaganda?
Earlier, the subject of the gdp came up. I think it has limited value as an indicator, and mostly in trends. Why? It has become a political tool for govt propagandists. It does not accurately measure true production in a country.
GDP is supposed to be 'gross domestic product'. Here is the wiki definition:
Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time. GDP per capita is often considered an indicator of a country's standard of living; GDP per capita is not a measure of personal income (See Standard of living and GDP). Under economic theory, GDP per capita exactly equals the gross domestic income (GDI) per capita (See Gross domestic income).
Now the problems. What else is in the gdp numbers?
1. Disaster relief. All the spending on katrina & sandy in the us, & the tsunami in Japan are included in a nation's gdp. Even borrowed money is used to indicate a growing or positive gdp, when in fact the opposite may be happening.. REAL production can be decreasing, but borrowing & spending makes it look like the economy is growing.
2. Govt employees payroll is included. Even though the govt does not produce anything, & their salaries are from taxes on the productive workers in the nation, their numbers are included in the official gdp. Police, firemen, prisons, & many other things that are necessary are included in the gdp, yet they are not 'productive'. You can have a massive prison building program, & spend billions on incarcerating criminals, & the govt will call that 'production'.
3. Wars. War is not productive, & is a drain on the resources of a nation. Yet either income or expenditures from wars are included in the nation's gdp.
Another thing about gdp is the different ways it can be presented, depending on the desired effect or point being made. It can be calculated by 'expenditures' or by 'income'. Both are pretty meaningless, as both have plenty of room for political maneuvering.
The bottom line is that gdp numbers can indicate trends, if compared over years with the same parameters, but have little immediate value, unless you subtract the deficit spending & artificial manipulation of the numbers to make it look good. But politicians & their economists are proficient at juggling numbers to deceive, & this is what they do with the gdp.
Politicians & shady economists are able to use phony gdp numbers to make it appear that we are growing in productivity, when the exact reverse is true. The us is strong in food production, & some areas of manufacturing, like tractors, but is declining in almost all other categories of production. Massive govt spending, borrowed from future generations, hides this fact, & provides an illusion of continued prosperity, but it is only delaying the inevitable. We have too much dependency & not enough production. This will lead to our collapse.
The US is not increasing production, nor going in a positive direction with the economy. It is moving from a production based economy to a 'service' economy, which seems to mean we shuffle money around & skim some off. That makes our gdp look good, but it is a false hope. It is a deception from the politicians & big government apologists. You can ignore all other evidence, put your fingers in your ears & chant, 'GDP. GDP' over & over like that will make it real. But we have to face the facts. China is on the increase, & the US is in decline, both economically & the currency valuation. The evidence is forecasting the end of the empire, or worse. We could take steps to turn it around, but we don't. All that says is we are stubbornly holding on to a fading empire, like rome & others in the past. We will follow their same fate. History repeats itself, because we do not learn from it.