(Courtesy of http://www.chrismartenson.com/blog/gdp-report-just-plain-wrong/23394)

Hi Tom-

Just wanted to drop a quick note to remind you that as bad as Wall Street may seem when they steal your tax dollars to game the stock market and then reward themselves with huge, record-breaking bonuses, the .gov is even worse.

See, Tom, .gov has pegged the success of its “recovery” efforts to the GDP. And with unemployment now unstoppably awful and getting much worse, even Little Timmy and Crazy Larry are furiously messaging that the “recovery” is going to be jobless—which is going to be a little uncomfortable for anyone who depends on a job to feed themselves and all.

And, Tom, by their own admission, .gov has said that the GDP will need to resume at least a 2.5% growth rate or more jobs will be lost. Falling short by even .1% means unemployment will grow. And it also means the Recession will continue, despite the fact that the entire .gov is calling for the Recession to lift by the end of this year.

Whuh?

So, with that in mind, the GDP (as silly as it already is as a metric) is becoming Soviet-style propaganda, massaged with the sole intent of misleading the populace so they don’t get, you know, thoughts about what is happening to them.

Below is from Chris Martenson’s analysis. He’s not an Economist, but just a Duke University-trained neuro-scientist who has been having some, you know, thoughts.

Says Chris:

«All I want to focus on here is just one component, circled in green above:  consumer spending, which represents over 70% of the economy.  Given this prominence, and taking our argument that there must be some proportional relationship between consumer spending and corporate revenues, we need look no further than this one simple measure to determine that something is seriously out of whack in the GDP report.

From today’s GDP release, we get these numbers for the total GDP, along with something called “PCE” which stands for Personal Consumption Expenditures (i.e. “Consumer Spending” in the formula above):

Going from the very peak of the economy in QIII of 08, we can see that the BEA reports that GDP and PCE have only dropped by 2.7% and 2.3%, respectively.

Really?

PCE is only down -2.3% from peak? With corporate revenues in total down more than 15%? How does that work?

Is there some way to explain how people are consuming away, but doing so without spending money on products and services offered by companies? How do we explain a 15% drop in the solid, reliable corporate revenue numbers but a 2.3% drop in Personal Consumption Expenditures?

I really can’t think of any possible explanation that makes sense.  And so I have to defer to the more reliable and trustworthy of the two numbers; corporate revenues.

Of course, comparing from the peak to current is not exactly what we should be doing, because that is comparing a QIII to QII drop in PCE to a QII to QII drop in corporate revenues.

When we ask the question, “How much have GDP and PCE dropped between QII 08 and QII 09?” we get these results:

Well, there, that certainly makes me feel better!

Just kidding.

This means we are being asked by the Bureau of Economic Analysis (BEA) to accept a reported -2% drop in PCE and a decline in corporate revenue of -15% , a figure more than seven times larger.

Of course, the discrepancy between the two cannot be reconciled. It is impossible. One must accept one or the other.»

Sure seems like .gov is either getting sloppier with its explanations of why this “recovery” still feels like a kick in the nuts on a cold day to the average American; or, it’s counting on you not being able to count.

Either way, sucks to be the American People—still.

Big Addition-by-Subtraction Hugs,

The Abyss