I’m always up for an education, so please correct me where I’m wrong.
Isn’t government spending one of the elements of GDP? By increasing government spending you haven’t really directly increased economic production, making GDP an faulty indication of the health of the economy. It’s like a self-fulfilling prophecy.
The author also says, “...this approach rests on the theory that our economy is crappy because our government is spending more than it takes in and that the resulting deficit is creating ‘uncertainty.’”
That’s not right either. Government spending is taking capital from the market that it would otherwise use to grow/expand. Austerity slows that bleed from the market. It’s like the supporters of “Stimulus” think that taking gas out of your car and pouring it on the road will make your car go farther.
sorry for the extra post.
The current government is not really taking anything from the markets to fund it’s borrowing. That’s the real problem!
They’re printing their own money to borrow and pay for bonds purchased by the governemnt.
A circle of straw-men.
If they had to go on a truly open market for the borrowing, the rates would be outrageous.
Get ready because THAT is what’s coming.
I view government spending, in accounting terms, much like intercompany income and expenses. That type of income or expense is eliminated in combined financial reporting, so at best, it's a zero-sum game. There is no net change in total income or expense. But with government adding their spending to GDP they are overstating GDP, because they took that money from the private sector.
But what are we to expect from a crooked government that changes the rules for reporting unemployment, and the CPI?
The 2012 CPI was officially 2.1%. Does anyone here believe that?