Politics In America
From the creator of Quantitative Easing Explained (which just reached 5 million views on Youtube) Omid Malekan.
And here’s QE Explained, for those who haven’t seen it yet:
Classic Ron Paul Clips, Great Compilation
Just a few of the highlights:
- 1984: (warning of a surveillance state)
- 2001: “This [housing] bubble will burst, as all bubbles do”.
- 2002: “Over the next decade, Americans will become poorer and less free”
GDP on a Per Capita Basis: Decidedly Disappointing
I don’t believe GDP is nearly as important as most econ types do, but the chart below is interesting nonetheless.
When measured on a per capita basis, cumulative GDP growth since the start of the recession in ’08 is extremely disappointing. Especially when you consider all the measures which were supposedly designed to boost growth.
QE1, QE2, TARP, ZIRP, stimulus (think Solyndra & Fisker, not roads & bridges). Failure & wealth transfer have resulted.
Perhaps the most economically impactful “stimulus” enacted so far is the payroll tax cut. Social Security payroll tax deductions were temporarily reduced from 6.2% to 4.2% in 2011. Although there will be bickering, for now it seems like the tax cut will be extended indefinitely (ignore the unsustainable long-term nature of it all, if you can).
Some economists venture to guess that the payroll tax cut (2% less taxes on all wages/salaries below a certain threshold) will contribute 1-1.5% to annual GDP as long as it remains in place.
So picture the chart to the left, without a big chunk of the recent upturn. Now picture it if properly adjusted for inflation. It’s not a pretty picture.
Conclusion: any economist that says we’re not currently in a recession/depression is trying to sell you something.
Chart via WSJ’s Jason Lahart.
Update on China’s Ghost Cities
China, along with the rest of the universe, continues to prove just how wrong Keynesians are about infrastructure/stimulus spending. Almost always, the result of such spending is a handout to politicos. It causes incalculable disruptions to the real economy. No matter how well-intentioned the pundits who begged for it were.
As a result of the bad debts created, China will continue to devalue their currency and continue to have high inflation.
