The Government’s GDP “Estimate” = “Grotesquely Deceptive Propaganda”
I guess the new policy regarding the presentation of economic data that has been implemented by the Obama Government is, “if you don’t like the results the first time around, make shit up to make it look better the second time.” After all the media will zero in on the newly fabricated statistics and that will become the Orwellian Truth. Besides, the public doesn’t care.”
Immediately after the release of the headline GDP report, Reuters released a news report headlined: “U.S. believes no structural issues in GDP data construction” – LINK. It’s like symphonic orchestration. Release a fraudulent economic report and follow it right up with a news report from Reuters which affirms the “validity” of the report, using Government statisticians as the source of information. And Americans accuse the Chinese and Russians of issuing propaganda based on fraud?
You know something is rigged by the Government when the press release announcing the results contains several paragraphs trying to explain away the revisions. Of course, most of the key new “metrics” are not defined other than with vague descriptions. Here’s an example:
A new aggregate, the average of GDP and GDI, is a supplemental measure of U.S. economic activity. In real, or inflation-adjusted, terms this measure increased 0.5 percent in the first quarter of 2015;
The net result it that what was originally reported as a -.2% real decline in GDP in Q1 is now considered to be a .6% gain. Really? We know just about every economic metric reported during Q1 reflected a declince in economic activity that took the indices back to 2008-2009 levels. And yet, according to the Government, real inflation-adjusted GDP increased in Q1.
Part of the trick to this math is that, somehow, the Government determined that prices declined 1.6% (annualized) rate in Q1. Anyone experience paying lower prices for stuff at any point in the last several years? I guess if the Government’s price index only includes the price wars going on in the retail industry, then maybe prices of electronics and Michael’s Store widgets dropped in Q1. The price of everything else increased, in some cases significantly.
The reason the Government wants to present a decline in its GDP deflator is that it has the mathematical affect of converting real GDP into a higher number than nominal GDP. We already know that the Government’s fraudulent measurement of inflation has the affect overstating nominal GDP. A negative GDP deflator magnifies this affect:
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