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Is the US Economy Shrinking ?

St. Phatty

Active member
I listen or read lots of Western news media reports about the US economy.

In July 2017, they were reporting a 3/4% quarterly growth, and a 3% annual growth.

(3/4% compounded 4 times is a little more than 3%, but 3% was the number in the news report.)

3% of $17.2 Trillion ... $516 billion.


Then for the time period which I guess might have gone from end-Obama to early-Trump, they reported national borrowing of $666 Billion.

And $4.2 trillion in a year income and payroll taxes. (Could include gas taxes etc.)


Now, imagine if you went into a bank, and took 6 zeroes off the US gov numbers.

One other note, US gov. debt service, is listed as $266 Billion. (from a quick look-up that might be for a time period 3 or 6 months later than the mid-2017 set of numbers.)



Imagine telling this to a bank manager,

"My income is $4.2 Million.
$516,000 of that was actually debt-financed spending, so for most people their income would be $3.684 Million.
But I'm special, so I'm going to put $4.2 Million on the form in the part where you state your income."

"I borrowed $666,000 last year, and only spent $516,000 of it.
My annual debt service cost is $266,000, so it looks like $150,000 of my borrowing last year was to pay the interest on the debt."

"And, I am $20 Million in Debt.
Also, I just picked a huge fight with my biggest banker, a man named Mr. China, whom I owe over $1 Million."

"Mr. Banker, I want you to loan me $925,000 for the next year, and ignore all the other stuff."


I venture to say, most bank managers would avoid lending money to such a client.

What do you think ?


Once again I wonder, why do these concepts apply to personal and corporate economics, but not the US government ?

Obviously part of the answer is, because they can print money, and it would be massively inconvenient & disruptive, to transition to a situation where the US government is solvent.
 

igrowone

Well-known member
Veteran
i like the numbers you present, it's a good way of illustrating some things
but some things just don't compare well
for example, this person would have the ability to print their own money
does change the perspective, not that printing money cures all
 

CaptainDankness

Well-known member
We have more drugs than ever and drug money ain't on record. So I think we are doing just fine.

Not to mention all the people who pocket cash so we don't get raped on taxation. I don't have a bank account and make decent money only tax I pay is property tax so I don't get forced off my land by armed thugs. :)
 

Cannavore

Well-known member
Veteran
The economy isn't shrinking. The people at the top are siphoning off all the wealth and destroying the middle class and every one else by design.

In 2017, $8 of every $10 of wealth generated in the US went to the top 1%. The bottom 50% of earners saw no increase in wealth. In other words 82% of the wealth generated in the US last year went to the richest people. While worker productivity and corporate profit is at all time highs.

The richest 3 Americans own more wealth than half of the USA.

50% of US wage earners in 2016 made $32,000/yr, barely higher than the poverty line.

The richest 6 people on the planet earth have more wealth than 3.5 billion humans combined.

Capitalism is coming to an end.
 
X

xavier7995

Igrowone nailed it. Governments and people do not function in the same way. Government can always print money to meet an obligation, people can't. The US has an unlimited credit line as we will, sans grandstanding shit in Congress, always be able to pay those obligations. Debt isn't tied to inflation rates, it is sort of like buying a house with a fixed rate mortgage, you have to pay a certain number of dollars each month, but the payment rate isn't tied to increases/decreases in your bank account. That whole being the world's reserve currency is really damn helpful.
 

Farm Hero

Member
3% US economic growth in 2017 is considerably better than the growth over the previous decade.

I believe in 2018 there will continue to be steady economic growth, the early signs are already visible.
 

Dropped Cat

Six Gummi Bears and Some Scotch
Veteran
The rent on my commercial space was $1,700.00 in 2008.

The rent on my commercial space in 2018 is $3,600.00

Same space, same square footage.

Not complaining, just saying.

Economic growth, lol
 

Ready4

Active member
Veteran
Depends on whether you view facts or view "alternate facts" on Fox "news" , etc.
Auto sales in 2017 dropped for the first time since 2009.
After 8 years of the phony neo-cons raging about the deficit, the "conservatives" had a chance to prove they really were "conservative" = they failed mightily, proving clearly that they were full of shit and that there is no fiscal conservative party - therefore there are no "conservatives" - just neo-cons.
I hope that nobody on this site, regardless of political beliefs, suffers from a disaster caused by the current dumpster fire in the White House.
 

Satyros

Member
The U. S. government cannot print money. It can mint and regulate coinage.

The paper dollar is purchased from the Federal Reserve under a bond. So the government has to pay a fee or interest for it. I wouldn't call it "money". It cannot be redeemed or converted into silver or gold.

Debt to Gross Domestic Product ratio continues to soar, and, after disposing of mainstays like most of the steel and auto industries, the only apparent growth would be in things like stock market manipulation and corporate profits.

In some states, perhaps, the cannabis market may be big enough to stand in place of some dwindling industries; unfortunately, you can't really eat it, drive it, or build infrastructure with it. Hemp can make many useful things, and for a long time you could actually pay taxes with it. On the whole, though, it is fairly cheap.

If you are looking for a job, please line up behind the thousand other folks vying for the same measly position.
 

Gry

Well-known member
A middle class, has been replaced by a statistic where 60 some percent of the population is one check away from being homeless.

Everything thing is relative to one's perspective.
 

Illuminate

Keyboard Warrior
Veteran
Quantitative easing is not sustainable neither is the war machine, outside looking in US economic growth does not out weigh the rust on bridges.
 

armedoldhippy

Well-known member
Veteran
Depends on whether you view facts or view "alternate facts" on Fox "news" , etc.
Auto sales in 2017 dropped for the first time since 2009.
After 8 years of the phony neo-cons raging about the deficit, the "conservatives" had a chance to prove they really were "conservative" = they failed mightily, proving clearly that they were full of shit and that there is no fiscal conservative party - therefore there are no "conservatives" - just neo-cons.
I hope that nobody on this site, regardless of political beliefs, suffers from a disaster caused by the current dumpster fire in the White House.

truth...
 

St. Phatty

Active member
Obviously part of the answer is whether you consider it legit to count debt-financed spending as income.

One of the interesting charts that's come out recently is, GDP net of debt.

unnamed-9.jpg
 

Ringodoggie

Well-known member
Premium user
The rent on my commercial space was $1,700.00 in 2008.

The rent on my commercial space in 2018 is $3,600.00

Same space, same square footage.

Not complaining, just saying.

Economic growth, lol


That's strange. I am a landlord (commercial) and my rents are the same that they were 15 years ago. I can't raise them because this shithole town has a ton of empty space (leftover industrial age).

Yet, my property taxes went from $4000 to over $10,000 and my insurance went from under $600 per year to $5641.13 a year (just paid it today LOL)

Depends where you are. If my building were in the middle of San Fransisco or Manhattan, things would be different.

Rents are cheap in Shithole, USA. LMAO
 

St. Phatty

Active member
That's strange. I am a landlord (commercial) and my rents are the same that they were 15 years ago. I can't raise them because this shithole town has a ton of empty space (leftover industrial age).

Yet, my property taxes went from $4000 to over $10,000 and my insurance went from under $600 per year to $5641.13 a year (just paid it today LOL)

Depends where you are. If my building were in the middle of San Fransisco or Manhattan, things would be different.

Rents are cheap in Shithole, USA. LMAO

GDP/GNP is the summation of all those rents, the ones that gone up and the ones that stayed flat.

What do you guys think is the average rent increase, for commercial space, or residential space, or retail space, whatever you observe - per year ?

I think 5% annual increase, nationwide average, is a conservative estimate for residential rentals.
 

igrowone

Well-known member
Veteran
The U. S. government cannot print money. It can mint and regulate coinage.

The paper dollar is purchased from the Federal Reserve under a bond. So the government has to pay a fee or interest for it. I wouldn't call it "money". It cannot be redeemed or converted into silver or gold.

...

this is the crux of the biscuit
you may not call it money, but it sure works like money
and the federal reserve isn't the u.s. government, but they serve its purpose
 
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