by MonteQuest » Wed 20 Apr 2005, 20:21:37
$this->bbcode_second_pass_quote('Licho', 'O')k Jato, but USA didn't double population and graph is showing GDP per unit of energy. I only didnt say it clearly enough. USA almost doubled GDP per unit of energy.. It also almost doubled GDP per capita (per capita energy use remained the same).
Some people just don't read. This is the third time this has been posted. The GDP growth has been the result of
debt spending based upon illusionary wealth courtesy of low-interest rates and rampant real estate speculation.
Where does the "currrent" money come from to purchase the goods and services that produce GDP figures? It surely is not from a growth in income/wages due to an increase in worker productivity. It is from the refi-ATM of inflated home equity and the daily borrowing of $2.9 billion dollars from foreign investors. How will this debt be paid off? Won't somebody have to produce some real wealth sometime somewhere?
You can produce shiploads of goods, but if there is no money to buy them, it ain't gonna add a dime to GDP. Look back at the 1930's. No shortage of goods or services, but no money and thus an anemic GDP.
$this->bbcode_second_pass_quote('', 'W')here would the US GDP be today had the Household Debt, as % of the GDP, remained at the historically high level before the current run up? What if the GDP growth came from growth in the income of households and Household Debt growth that was at 45% of the growth in GDP? The primary reason that I picked the 45% number is that it is the average for 19 years, 1965-1983, and that after 1984 the Personal Bankruptcy Filings exploded. So, we are not talking about a case of no growth in Household Debt; we are simply talking about growth in household spending coming primarily from growth in incomes. Such a GDP would be a Secular GDP with organic growth. As some of you may know, growth in household incomes, in real terms, has been poor over the past 5 years (negative for the last twelve months). How long can debt be a substitute for growth in household spending when income growth is hard to come by?