{"id":561534,"date":"2017-10-03T21:17:07","date_gmt":"2017-10-03T21:17:07","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=561534"},"modified":"2017-10-03T21:17:07","modified_gmt":"2017-10-03T21:17:07","slug":"the-shocking-truth-about-government-debt-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=561534","title":{"rendered":"The Shocking Truth About Government Debt"},"content":{"rendered":"
\"GDP<\/a><\/div>\n

By Brian Maher<\/a><\/span> <\/p>\n

<\/div>\n

This post The Shocking Truth About Government Debt appeared first on Daily Reckoning.<\/p>\n

Dear Reader,<\/p>\n

Is the post-recession \u201crecovery\u201d actually a depression obscured by the false prosperity of debt?<\/p>\n

A scandalous question\u2026 with perhaps a scandalous answer.<\/p>\n

Today, we penetrate the \u201csquid ink of official truth\u201d\u2026 scatter the statistical fog\u2026 and let in an illuminating shaft of light.<\/p>\n

Between 2010 and 2016, nominal U.S. GDP expanded an average 2.1% per year.<\/p>\n

Some years it expanded more than others. But each year, nominal GDP expanded \u2014 officially.<\/p>\n<\/p>\n

Meantime, the national debt has nearly doubled since 2010. It now floats above $20 trillion.<\/p>\n

And the Federal Reserve has nearly quadrupled its balance sheet to nearly $4.5 trillion.<\/p>\n

So\u2026 how much of the post-recession growth is real\u2026 and how much is a debt-spun mirage, a shadow, a phantom?<\/p>\n

What would GDP look like absent the artificial stimulus?<\/p>\n

Financial advisory firm Baker & Co. Inc. recently hatched a study to answer these questions.<\/p>\n

Their findings are illuminating\u2026 <\/p>\n

The government has borrowed and spent luxuriantly for decades.<\/p>\n

And \u201cactual\u201d GDP (details to follow) has always risen with the rising debt \u2014 whether because of it \u2014 or in spite of it.<\/p>\n

But after 2008, Baker & Co. argues, \u201cSomething in our economy broke.\u201d<\/p>\n

\u201cActual\u201d GDP is no longer rising with the rising debt.<\/p>\n

In fact, it is falling.<\/p>\n

They argue the depression has been obscured by the phony fireworks of debt:<\/p>\n

Since then, it appears the economy has been in what would be considered a depression but masked by huge federal government stimulus borrowing.<\/p>\n

Their conclusion swims outside the mainstream\u2026 flouts official wisdom\u2026 strips the emperor of his garments.<\/p>\n

But is it true?<\/p>\n

At the heart of Baker’s tort is a trick the federal government uses to measure GDP.<\/p>\n

It begins with this question:<\/p>\n

If you take on debt, do you consider it income? Or do you take it at face \u2014 debt that must be repaid?<\/p>\n

If you answered debt is income, we suggest you apply for a position within the Bureau of Economic Analysis\u2026<\/p>\n

In its calculations of GDP, government spending adds juice to the economy.<\/p>\n

But it makes no distinction between money the government raises through taxes\u2026 and the money it raises by borrowing.<\/p>\n

Baker counters that the money government borrows must eventually be repaid. Thus, it is not income. It is \u201cartificial stimulus\u201d:<\/p>\n

[We] suggest that government debt is not part of \u201cnational income\u201d because it is not income. It is borrowed\u2026 and must be paid back eventually\u2026 Debt is artificial stimulus, not national income! Governments must pay back debt either through higher taxes, inflation\/depreciated currency, reduced services or some combination thereof.<\/p>\n

Baker therefore created what they consider a measure of true GDP \u2014 the \u201cActual National Income.\u201d<\/p>\n

How does \u201cactual\u201d GDP appear without the smoke screen of debt?<\/p>\n

Their shocking answer:<\/p>\n<\/p>\n

Examine the graph, says Baker, and \u201ctell me if you think the actual economy has healed.\u201d<\/p>\n

We did. We can’t.<\/p>\n

How much bounce has the post-2008 barrage of debt given GDP?<\/p>\n

Since 2008, this artificial stimulus has averaged 7.45% of GDP. The arithmetic\u2026 is quite simple; without the artificial stimulus created by spending the proceeds \u2026read more<\/a> <\/p>\n

Source:: Daily Reckoning feed<\/a><\/p>\n

The post <\/a>The Shocking Truth About Government Debt<\/a> appeared first on Junior Mining Analyst<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Brian Maher This post The Shocking Truth About Government Debt appeared first on Daily Reckoning. Dear Reader, Is the post-recession \u201crecovery\u201d actually a depression obscured by the false prosperity of debt? A scandalous question\u2026 with perhaps a scandalous answer. Today, we penetrate the \u201csquid ink of official truth\u201d\u2026 scatter the statistical fog\u2026 and let […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/561534"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=561534"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/561534\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=561534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=561534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=561534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}