I continue where I left off – discussing just a few of the ways Washington tries to fool us by its misuse and manipulation of data. Washington likes to remind critics that Americans enjoy the highest living standard in the world.
As evidence of this, government “experts” discuss statistics such as GDP growth, employment, wealth, income and wage growth, and other economic data without defining exactly what they are referring to or explaining all the assumptions used.
In Part 1 of this series, we saw how hedonics can alter GDP and inflation data. Here we look at some additional problems with GDP. After you read this piece, I hope you will agree that the misuse of GDP data as an indicator of economic strength has been one of the biggest errors made in the field of U.S. economics.
I can make a strong case that over the past three years there has been virtually no GDP growth other than maybe three quarters. After adjusting for hedonics, the use of debt and the other gimmicks, it’s clear the U.S. economy has grown little since 2005.
Sound crazy? Sure it does – but only if you’ve accepted the data from Washington at face value, as the media always does. But this grand illusion cannot remain hidden much longer. Already, we are seeing just some of the effects of Washington’s deception – the real estate meltdown and banking crisis.
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