Comments on: A Quick Word On GDP

By: Smoke and Mirrors: Obama Says “Recovery Act” Responsible for Improving Economy « Ancavge

Fri, 31 Jul 2009 23:28:03 +0000

[...] prone to revisions. The numbers may change plus or negative 2% or more over the next few months. As The Moderate Voice notes, “Q1 was revised to -6.4% from -5.5% respectively. So even though Q2 beat the consensus of [...]

By: mikkel

mikkel — Fri, 31 Jul 2009 20:36:37 +0000

Far enough pacatrue. Most of my irritation is towards the economists and government officials, but on the other hand I feel like the media should be doing more to investigate...especially since the financial networks aren't. They are so involved in the day to day greens/reds that they don't ever take time to explain intricacies and I think the other news sources should bring on people that will.

I'm not sure if you read a post I had a while back where I stated that I was going to start focusing more on the media itself because I feel like a placid media guarantees corrupt governing (and poor business practices).

As for the Great Depression thing, ironically we are majorly responsible for the mess, but as massive borrowers we have (and should continue to) miss the brunt of the problems. The UK (the major debtor nation at the time) contracted about 8% during the GD, while the US did 25%. I've long said that I believe we will contract 10% inflation adjusted, but many export oriented economies in developing countries have already done 15+, and even the EuroZone is headed towards 10%.

That's the prime difference, as the wealth inequality during both times is relatively similar. Overall I'm much more concerned about global impact and needless temporary suffering in the US rather than any prolonged major disruption to the US itself (unless they trash the currency).

By: pacatrue

pacatrue — Fri, 31 Jul 2009 20:14:32 +0000

Very good point about the impact of government spending on the reduced decline in GDP.

I would like to disagree a bit about the couple statements suggesting that the media are spinning things. Perhaps so, but at the same time, most economists are telling them that this means the recession could be ending, and they are largely just reporting that. (The same may not be true on financial networks which simultaneously have a vested interest in spinning for growth and SHOULD be digging deeper than simply reporting the major economist line.)

I wonder if there is a possibility that, while the overall net drop to the economy could be worse than the Great Depression, the impact on the overall citizen could be not as bad. I had this idea because most of the wealth was phantom wealth that never percolated throughout society quite as deeply. The millionaires became billionaires, and they may collapse to millionaires again. I'm not saying there will be no pain. That's absurd. It's already here and if more of the debt collapses, there will be further pain. I'm just saying that some of the wealth that is disappearing never made it out of a certain strand of society in the first place. That whole widening gap between rich and poor thing.