The government lying to us, I'm shocked, SHOCKED I say. They also say there's no inflation.
thestreet.com
To show the bogusness in last week's GDP data, Kurt zeroed in on computer spending: "A single component of business fixed investment accounted for more than its overall increase." (Think about that for a minute.) "Investment in computers soared by $38.4 billion, or 12%, from $319.1 billion to $357.5 billion. The trouble is that much of this boom-like increase in computer investment never occurred [my emphasis] . The apparent surge is a consequence of the hedonic deflator that U.S. government statisticians use when measuring computer output and investment. The aim is to capture quality improvements by calculating how much it would have cost in 1996 to buy a computer of equivalent power to today's machines."
He continued: "Measured in current dollars, however, this spending rose a lackluster $6.3 billion, from $76.3 billion in the previous quarter to $82.6 billion -- far below previous peak levels. In other words, hedonic pricing produced $32.1 billion of GDP in real terms, about 43.9% of the reported second-quarter GDP increase of $73.1 billion. In its absence, GDP would have grown a mere $41 billion, implying a growth rate of 1.68% The important thing about hedonic pricing is that it measures dollars that nobody pays and nobody receives. And it grossly distorts international comparisons [not to mention productivity statistics] ." That's another reason why job creation is so meager, compared with the GDP statistics. In essence, there's no "there" there. The numbers are basically a lie. |
