Libertarian Jackass

"Life is short, but truth works far and lives long; let us speak truth." -- Schopenhauer

Monday, September 22, 2003

"The Recovery is a Fraud"

From the Daily Reckoning financial newsletter:

"The recovery is a fraud," we replied.

The second-quarter GDP numbers were largely mythical or
misinterpreted. Half of the increase came from military
spending, which makes people poorer, not richer. Another
$38.4 billion was listed as spending on computers.

Too bad it didn't exist: "The vast majority of computer
investment never occurred," explains U.S. News & World
Report article (thanks to Richard Russell for mentioning
it). "Given the bizarre way government statistics are
compiled, nobody actually paid anything and nobody received
anything. That's because Washington measures computer
investment by calculating how much it would have cost in
1996 to buy a computer of equivalent power to today's
machines. On the $38.4 billion in increased computer
investment, therefore only about $6 billion was real
spending. The other $32 billion was a statistical
construct, which is just a fancy way of saying that it
wasn't real. Without that false comfort, we would have been
looking at a second-quarter growth not of 3.1 percent, but
of roughly 1.7 percent - and most of that attributable to
defense spending. Profits tell the same story, down $31
billion from the first quarter."

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