I really didn’t want to write about today’s GDP report and revision, but I wouldn’t be much of an internet jerk pundit if I didn’t. Also I had Melissa hide all the razor blades and sleeping pills. So let’s get to the beef, or what there is of it. WSJ makes nice with the headline:
U.S. Economy Grows Faster Than Expected
Woo-hoo! Happy days are here again! Only not really, because the expectation was for a crap sandwich and what we got instead was a crap sandwich with a small Diet Coke. That is, until the Q2 revision comes in three months from now. But let’s get to the actual numbers:
The nation’s gross domestic product, the broadest measure of goods and services produced across the economy, expanded at an annualized 1.7% pace from April to June, beating expectations for a 0.9% increase. The second quarter reading follows a downwardly revised 1.1% for the first quarter of 2013.
Pretty gloomy stuff, since 1.7% is barely treading water. To recover from this “recovery,” we need 3% growth, but 4% would be even better — and there’s nothing not doable about 4% growth; we just have policies that are all wrong. But WSJ has plenty of spin for you:
Broad revisions to GDP figures also showed that the U.S. economy expanded at a stronger pace in 2012 than was previously thought. GDP last year expanded at a 2.8% pace versus a previous estimate of 2.2%, according to the revised figures released by the Commerce Department. The change comes as part of a comprehensive overhaul of gross domestic product data dating from 1929 through the first quarter of 2013.
Do you feel any richer because Commerce rejiggered the math? Yeah, me neither. Also left unsaid: 2.8% growth was “purchased” if you will, by borrowing a trillion dollars directly from our kids, and by the Fed conjuring up $85,000,000,000 every month to prop up the twin bubbles of housing and equities. If you don’t feel like doing the math, that’s two trillion in one form or another of stimulus just last year.
That’s two trillion out of a 16-trillion-dollar economy. In other words, we borrowed or printed more than 12% of last year’s GDP, just to generate sub-3% growth.
If you think that’s sustainable, there’s probably an administration job available to you.