GDP Without Government Spending

I have termed them "derivative dumbasses."

People in the media who are excited when things "aren't worsening as fast as they were."

For example no doubt many of you have heard reports or in the news;

"Housing sales have slowed LESS RAPIDLY than in the past, sending the Dow Jones up 3%!"

"Unemployment has increased, but at a rate slower than last quarter, which prompted analysts at Goldman Sachs to change their recommendation from "sell" to "strong buy!"

Or, I'm waiting for the day the MSM reports this one;

"Barack Obama's approval rating, currently at 28%, is dropping at a less rapid rate, suggesting Americans are starting to realize how brilliant this man really is indebting us and our great great grandchildren!"

Of course it's inane and the reason it's inane is that the situation is still WORSENING, it's just the rate or "first derivative" at which it's worsening has lessened. Which is again like a doctor saying to a cancer patient,

"Hey, GREAT news! The cancer is spreading at a SLOWER rate than before."

"So is it in remission?"

"Oh, hell no! It's still spreading, but we've upgraded your life expectancy from 3 weeks to 6 weeks!"

But one that the MSM and leftists in the media/government complex were drooling over were the latest revisions to GDP figures which showed the economy going from -6.4% to "only" -1%.

The economy is STILL CONTRACTING, but at a slower rate.

This of course was then heralded as a great achievement of Obama and the stimulus plan. However, there was just one small problem. Government accounted for a disproprationate amount of the improvement.




If you look at the details, government spending was rather dramatically increased by 1.27%. Had this spending not occured, then the economy would have contracted by 2.27%, not the 1% people are all swooning over.

Now I know it's still an improvement, but don't you worry, the economy is not going to boom any time soon. I predict it's either going to stagnate like the Japanese economy did and we limp along for the next decade trying to find ryhme or reason in working more, or it double dips which some are also predicting.

However, allow me to make a couple predictions/observations;

1. If we are all excited about Obama getting a -2.27% "REAL" REAL GDP growth rate, it doesn't matter if the economy never recovers and never goes positive because even a -1% real real GDP growth rate will be an improvement.

2. As long as the economy's decline SLOWS, the media will still report the Obama administration as a success. It doesn't even have to reverse into positive growth. GDP's first derivative just must slow.

3. Remember when we were coming out of the 2000 recession after the Dotcom Crash. The PRIMARY chorus of the left that the economy was not recoverying FAST ENOUGH. This will be the measure by which Obama will be judged and he will be judged against that most incompetent and idiotic man in the world: George Bush.

Let's just see how great that Keynesian stimulus plan works.