US government revises earlier GDPs to fix anomalies in reporting

In the first quarter of 2014, the government sent shivers through global financial markets by reporting a recession-like contraction in the U.S. economy of 2.1 percent. Despite severe winter storms and record-breaking cold, economists still could not account for the deep plunge in growth. Even Federal Reserve officials worried something worse than just the effects of bad weather could be amiss in the economy.

Turns out, it was the data itself and how the government calculates gross domestic product that were actually amiss. The Bureau of Economic Analysis, the federal agency responsible for GDP, now says growth was actually 1.2 percentage points higher in the quarter for a more manageable and understandable decline of 0.9 percent.

The bureau announced Thursday its regular annual revisions of the past three years and confirmed a series of stories in CNBC that raised questions about the seasonal pattern of growth. Overall, the government revised down GDP over the three years ending in 2014 by a modest 0.3 percent but also took the first steps in changing the way it calculates GDP to account for anomalies in the quarterly pattern of growth.

"In its report, the bureau revealed a new problem that CNBC had not found: Overstatement of growth in the third quarter for at least the past three years. In fact, the biggest change over the three-year period was a 2 percentage point downward revision to the third quarter of 2012 to show just a half-point of growth,"

A revised 2% downward growth in 3rd quarter of 2012. Ah, wouldn't that be at the time of the 2012 Presidential election. Dah, sure just a coincidence. (sarc).

Gee, the Obama Mafia cooked the books to make it look like the economy was alive before the 2012 election. “Surprise, surprise,” as Gomer Pyle would say.

Of course, they would fine companies millions of dollars if they gave false information to the SEC, but government is exempt from the laws that it makes for everyone else.

This is how it is.

“$17trillion is our GDP—total of all business revenues for the whole country...revenues, not profits. Profits are maybe 10% of that number. Our total debt is just about to $60trillion. It was $4.7trillion in 1980 when financial deregulation began—according to FRB’s own data....and GDP was $2.7trillion or a GDP/debt ratio 163%....today GDP has grown, but debt has grown much faster to where the ratio is 330% debt to GDP. Gold has declined 40%, and i have no intent to sell even if it declines another 40%-—because debt has mathematical compounding certainty going for it-—GDP sales growth DOES NOT.”

“Feds have been reporting quarterly since 1945; and we have been warned, but it’s like no body cares until the straw that broke the camels back.”

“We have backed ourselves up into huge pile of liabilities, that are compounding away on a daily basis—and with no clear way out of this mess. At this point—there is no light at the end of the tunnel. This country was debt free for over 150 years, and still easily grew at over 3% per annum—with no inflation all during the latter 1700’s, 1800’s, and 1900’s, until 1970’s inflation. There were other issues along the way, but now, with $60 trillion in debt, being supported by measly little $17 trillion economy, that can’t really grow at 2%...let alone 3%....we got a really big potential problem staring at us.....as does Europe, and Japan. There is no way a Muslim Jihadist, supporting domestic terrorism....or communist sympathizer is going to lead us to the promised land.”

These are the thoughts from a friend of mine who knows this stuff inside out.

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