Free Markets, Free People

Don’t like the GDP numbers? Change the rules …

Seems easy enough.  That way you can claim to be improving it even while nothing is actually improving in reality:

The Bureau of Economic Analysis announced last week it would be changing the guidelines with which it calculates Gross Domestic Product, more familiarly known as the GDP, the standard by which the size and growth of the economy is measured.

The change comes after more than five years of economic stagnation that, despite frequent claims of a strengthening recovery, have seen high unemployment and extremely slight growth in the size of the economy.

GDP is calculated by adding up the total amount of private consumption, investment, government spending, and net exports. The new changes, which will include definitional changes to expand what is counted in GDP, are expected to add 3 percent to the GDP report, while not changing the actual output of the economy.

The agency claims the changes in calculation “more accurately portray the evolving U.S. economy and to provide for consistent comparisons with data for the economies of other nations.”

Note the emphasized text.  Realize that the addition of 3% to future GDP reports will be made without any explanation that a) there have been changes in the way it was calculate and b) in reality, the actual output of the economy has not changed at all.

But the administration will claim victory and the low information voters will buy it while the “no” information voters (those on the left who refuse to challenge anything put out by this administration) will crow about the “improvements” that the administration has brought to the economy.

Meanwhile the unemployment picture will remain the same (about 7.5%) until they can find a new way to calculate that and take about 3% off .  Then we’ll be officially “fixed”.

Amazing.

~McQ

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17 Responses to Don’t like the GDP numbers? Change the rules …

  • I’ve been inclined to number the people on Wall Street amongst the “low information” crowd, and they’re proving it today.
     
    Not half as smart as they think they are, Madoff proved that.

  • The agency claims the changes in calculation “more accurately portray the evolving U.S. economy and to provide for consistent comparisons with data for the economies of other nations.”

    I think they meant “more accurately portray the DEvolving U.S. economy…”, or the Obamic Decline.
    This is another in a series of “new” (very post-modern) definitions of economic indices, such as unemployment, poverty, etc.
    But they haven’t yet addressed the labor participation rate, which is in the toilet, and at a 35 year low.
    NINE-POINT-FIVE MILLION fewer jobs since Obama set up the Obamabanana Republic.

    • It will be noticed and addressed when there is a GOP pres. Until the  its funemployment!

    • As has been said, when no one is working we will achieve 0% un-employment.
       
      Any metric that can work that way is pretty much useless in reality, well, in the reality on the outside of the looking glass.

    • And think how cool it would be to on-board another say, 20 million undocumented Democrats.

  • Won’t the change only add 3% once, and then growth will go back to what it currently is?

    • That’s what I wondered, because I could not think of a simple way to rig the numbers to always be 3% higher. The compounding would really screw that up.

      But then I remembered that these are left-leaning government bureaucrats with no connection to reality. They’ve been on a long quest, admittedly intensified since Obama came in, to make the economic numbers meaningless. Since the problem with big government is that it fails, they need to make sure the indicators of failure are subverted.

  • The ultimate reality of the Obama Administration is that there is little hope.
    When JFK was President, the USA was going to the moon and every child wanted to grow up to be an astronaut.
    When BHO is President, the USA is going nowhere. The space shuttle is no more. Children can aspire to be on Food Stamps when they grow up.

  • I read Q & O on a regular basis. Does this mean that I can no longer be counted as a “low information voter”?

  • The GDP/GNP notion was bogus when concocted in the 1930s by Keynesian’s (who, typically, felt production would take care of itself, but people had to be encouraged to CONSUME…and 5% savings was killing the economy) and it’s just a bogus today as the CPI.