Posted on 12/22/2009 8:01:45 AM PST by blam
70% Of The Q3 GDP Growth Was Cash For Clunkers
Vincent Fernando
Dec. 22, 2009, 10:05 AM
Today's downward revision is far worse than it first appears. While third quarter GDP was revised down by a 0.6% (2.2% vs. 2.8% previously), the contribution from motor vehicle output (which was massively stimulated by Cash for Clunkers in a one-off fashion) remains enormous.
BEA GDP Release: Motor vehicle output added 1.45 percentage points to the third-quarter change in real GDP after adding 0.19 percentage point to the second-quarter change.
What this means is that Cash for Clunkers was an even larger factor than previously understood. As it stands, by a basic calculation without motor vehicle output, third quarter GDP would have been only 0.75%. That's barely growing.
Now obviously there might have been some degree of GDP contribution from motor vehicle output even if Cash for Clunkers hadn't happened. Yet it would have been far less than 1.45%, look at Q2's contribution noted above, it was only 0.2%.
[snip]
(Excerpt) Read more at businessinsider.com ...
so we just do Cash for Clunkers once every quarter from now till the end of eternity....problem solved!
Fail.
so...growth now = destroying things?
Gee makes me want to sell all my Gold and Silver and run down to buy a whole bunch of Mutual Funds.
So that 3rd Quarter increase that ‘proved the economy was turning around’ is just as we knew, a crock.
The billions of taxpayer dollars that funded CFC is gone, and all of those perfectly good assets (the vehicles now crushed into scrap) are gone as well.
The country was made that much poorer in the name of the fraud called "global warming."
Collectively, we're simultaneously going broke and insane.
If you are going to subtract cash for clunkers,
you would also have to subtract other stimulus spending
which would move the growth to negative.
It is simply propaganda to ‘correct numbers’ later.
We have a big problem when the leader has no street cred,
as the next ‘big one’ or crisis will be made much worse
when no one believes the numbers and panic is elevated.
IMHO, the other problem is the relative strengthening of
the dollar. Many companies cooked the books by beating
earnings expectations simply because of the favorable
exchange rate back to dollars. This may not be happening in the next quarterly results. Thus the music may stop in the game of musical chairs that represents the current stock run.
So unemployment is over 10% perhaps as high as 17%, people are losing their houses because they can’t afford the payments, debt is on the rise and credit card companies are raising their rates to take advantage. But, hey, as long as we can avoid the repo man, we can brag to the neighbors about our new cars!!!!
I wonder what the effect on GDP would be if you factored in the wealth destroyed through the cash for clunkers program.
Will the hiring of millions of temporary workers for the upcoming census create the same kind of distortion which can be used to provide cheerful headlines proclaiming the administration is putting people back to work?
My son is home for the holidays; he does not think most people in his young adult age group care one bit about the health care bill or unemployment(beyond their own), or much of anything else. They will just read or hear those headlines, and maybe the propaganda will register on them as “good news” or maybe they will just instantly hit a mental delete on that factoid and move on. The way he described his generation made me think of ghosts, that they really are not here, present to real life or even to other people, and it was dismaying.
The list, ping
“And just so there is no misunderstanding, YOU are not allowed to pay us back in “Clunkers”!”~President Hu SNL
Sounds like our Senate, doesn't it?
*snort*!:)
“Gee makes me want to sell all my Gold and Silver and run down to buy a whole bunch of Mutual Funds.”
LOL! :)
There’s a steady creep in the Misery Index too, Blam:
http://www.miseryindex.us/customindexoneyear.asp
It’s almost up to 12%...a long way to go to TRUE misery, but slow and steady while no one is watching, wins the race. *SPIT*
Got this in my email. Not sure about the accuracy.
A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.
A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.
So, the average Cash for Clunkers transaction will reduce US gasoline
consumption by 320 gallons per year.
They claim 700,000 vehicles so that’s 224 million gallons saved per year.
That equates to a bit over 5 million barrels of oil.
5 million barrels is about 5 hours worth of US consumption.
More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars
So, the government paid $3 billion of our tax dollars to save $350 million.
We spent $8.57 for every dollar saved.
I’m pretty sure they will do a great job with health care, though. /s
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