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Monday, February 03, 2014

When GDP Lies

To a casual observer, the economy is doing just fine in the USA. But, GDP does lie.

The Consumer Metrics Institute notes that since the depths of the last recession—which may still be ongoing—the median consumer has lost income at a -7% rate. So, who is telling the truth, GDP or median income? A GDP of over 3% doesn't fit with consumers losing income at a -7% rate. Therefore, GDP is a flawed measure of the economy.

The next time you read that the economy is doing just fine, remember that it's only the top 1% who are benefiting from the largesse of the Federal Reserve, which has pumped 16 Trillion dollars into the banks. Unfortunately, these banks turn around and deposit that money with the Fed and earn interest on it while refusing to loan it out to create new jobs. In other words, this is worse than a Ponzi Scheme—it's a direct transfer of funds from taxpayers to the banks, who earn enormous profits by not loaning that money out.

The solution to our current predicament is obvious. The first step is to END THE FED.