How Good Is the GDP News?

[Epoch-Times-Bot]

How Good Is the GDP News?

Commentary
We would all welcome good economic news. Even better, we would welcome a healthy economy.
We have now a headline number that seems fine—an inflation-adjusted increase in Gross Domestic Product annualized at 2.6 percent. But right now, we are nowhere near finding our way back to economic health. The worrying signs are everywhere.
The GDP increase is mostly attributable to two factors: an unsustainable increase in exports to Europe (mostly oil) and an increase in government spending. How is the latter supposed to represent economic output? Ask the people who constructed the GDP machinery back in the heyday of Keynesian economics. It should be obvious that an increase in government spending comes at the expense of the private sector. But that's not reflected in the way the number is constructed....

Source: How Good Is the GDP News?

[xenzol]

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