Skip to main content

How Bad Is It, Really?

Chart of Growth in U.S.Gross Domestic Product (GDP)
Back in the early 1980's, Alan Greenspan, the former Chairman of the Federal Reserve Bank, came up with a great idea. He reasoned that if the price of one commodity goes up, consumers will switch to another commodity in its place. On the basis of this reasoning, the method of calculating the Consumer Price Index was changed. The result is that the inflation rate reported by the US Government is reported to be lower than it would if it was still calculated the old way.

John Williams, the economist who operates "Shadow Government Statistics" likes to publish economic statistics as they would be if the CPI methodology hadn't been changed. This chart is a comparison of growth in the "real" (adjusted for inflation) US Gross Domestic Product using both the current CPI and the old methodology. When the line is above zero the economy is growing, with higher levels being greater levels of growth. When the line is below zero, the economy is shrinking, and in a recession. The lower the line goes, the more severe the recession.

The chart speaks for itself. The recession is deeper and has been around longer than the government tells us.

Chart of U.S. UnemploymentThe GDP isn't the only place John believes the government is cooking the books. This second chart is of the unemployment rate, with the "discouraged" workers added back into the numbers. According to Williams, these workers were "defined out of existence in 1994."

Lets see, 22% unemployment and GDP contracting at a 6% annualized rate and has been for the last decade except for a tiny spurt of growth in 2004.

Yep, Keynesian economics is workin' jus' fine. 'Specially with those nice men from the government here to help us.

Labels

Labels:

Comments

Post a Comment

Popular posts from this blog

Agregate Demand and the US Savings Rate

In my last post, I touched on the differences between the economic theories of John Maynard Keynes and Ludwig von Mises. Immediately aftward, I was directed to this story in the New York Times. It seems that americans are saving more instead of spending the their money on consumer goods. Up until this downturn, about 70% of the US Economy was consumer spending, and in 2005, the US Savings rate was negative 2.7%. The "stimulus" is supposed to stimulate spending to get money moving again. But it isn't happening as planned. Folks are saving for down payments because they don't expect to get zero down home mortgages; they're saving to replenish their decimated retirement and college funds. The austrians believe that the best way to "fix" the economy is to allow the "malinvestment" created by the false signals in the economy (from the open market ops and deficit spending) to be liquidated and the resources repurposed into better investments. It...
Post a Comment
Read more

Adoption Bibliography

Eventually, I will post the rest of my paper, but I think it appropriate to post the Bibliography, and I have some use for having it available online. This represents only the sources used in my paper, not the full extent of sources considered. “Adoption is the Best Option” http://adoptionisthebestoption.yolasite.com/ (a really good example of misleading appeals to emotion.) Alternate Religions Educational Network. Alternate Religions Educational Network (AREN) http://www.aren.org/ . accessed Nov 26, 2009. Babb, L. Anne. Ethics In American Adoption. Westport, CT: Bergin & Garvey 1999. Baptist Children’s Home and Family Services (BCHFS) http://www.bchfs.com . Accessed Sept 9, 2009. Barrett, William P. “Americas Most (and least) Efficient Charities.” Forbes Nov 2004 Bender, Karen E., & Nina de Gramont, eds.. Choice: True Stories of Birth, Contraception, Infertility, Adoption, Single Parenthood, & Adoption. San Francisco, CA: MacAdam-Cage 2007 Berne, Emma Carlso...
3 comments
Read more

Once in an eclipsed blue moon with Mercury in retrograde, etc

For any of you that may be interested in astrology or astronomy, this is quite the New Years... Today at 12:13 pm Mountain Standard Time, the moon was at it's fullest, and all the way around the world in the darkness of night, it was eclipsed over much of Europe, Africa and Asia. Of course, today is also New Year's Eve, and the occurrence of a full moon on New Year's Eve hasn't happened since 1990. According to Spaceweather.com , an eclipsed Blue Moon on New Year's happens only once every 91 years! So this is truly a once-in-a-lifetime occurrence! So to recap, we have Mercury (and Mars) in Retrograde right now, adding to the energies of the Full Moon, which is falling on the global holiday of New Year's Eve, which is wrapping up the '00 decade, and then all of those factors are being amplified by the power of an extremely rare eclipse. Wow! We know that Mercury is Retrograde in Capricorn, and this full moon is in its natural home of Cancer. The sign of Can...
1 comment
Read more