The Cost of Kidding Yourself

acrossthestreetnet.wordpress.com

7 points·Cbasedlifeform··6 comments

Well this sounds kinda scary:

Total U.S. GDP growth in the 20th century was $9.93 Trillion, while the government accumulated $5.5 Trillion in debt. In the 21st century, the US has borrowed $10.7T and has a grand total of $5.30T in GDP growth.

It sounds scary, but it's misleading. Comparing a century with 12 years is meaningless.

The US has been in recession 9 of the last 10 years.

This is not true as recession is defined by the NBER. If the author means to imply that we should change our definition of recession: I don't believe he produces a convincing argument that (US GDP) / (World GDP) is more indicative of a protracted economic slump than our current definition. When this ratio is declining for a particular nation, it simply means that the worlds economy is becoming relatively larger.

(US GDP) / (World GDP) is only interesting if the world economy is a zero sum game, which it isn't.

I for one am happy that people in developing nations are doing better.

First chart's huge dropoff is an artifact of choosing a yrange of 21-41 instead of 0-100. It's a common deficit of charts created under motivated cognition.

This comment misses the mark. The chart shows 9/10 down periods in a row. Its the time-series consistency that is the point. viz, the only bold in the inro para:

The US has been in recession 9 of the last 10 years.

The consistent decline is the story (at least as the author is telling it). The slope is not up and to the right, just the opposite. The concern you raise about the labeling of the Y axis is noted, but hardly a concern for anyone paying attention.

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