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A Look At The Uk’S ‘Real’ Gdp

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http://www.goldmadesimplenews.com/gold/a-look-at-the-uk%E2%80%99s-%E2%80%98real%E2%80%99-gdp-3448/

UK-Real-GDP.png

The above chart is pretty simple to follow. First up the black line is the UK’s GDP going back all the way to 1970. The green line is the amount the government has borrowed as a percent of GDP and the red line is a simple subtraction of the government spending through borrowed money from GDP. So what does this tell us?

The government has no money, it only has what it can tax the people. When it wants to spend more than the revenue it generates it borrows this money. However, that borrowed money has to be repaid and the only way it can do this is by taxing in the future.

So when the government borrows money and pumps it into the economy, it can make the GDP numbers go up and make the economy appear stronger than it actually is. In essence the government is borrowing GDP from future years to make GDP in the here-and-now go up. However, this is all false because eventually that borrowed money has to be repaid through higher taxes (with interest) and all that ‘gained’ GDP will have to be given back.

Found via Dennigers site, he's done the same for the US numbers for some time so this site has done a UK version. If this is accurate GDP has totally collapsed.

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So basically in the past 40 years there's only been two fairly short spells of private sector growth. 1984-90 and 1996-02.

:o

Da, comrade.

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whilst it's nice to see the thing graphically, this is fairly obvious.

My opinion is that no real GDP growth occurs until you overcome increases in govt and private borrowing, inflation, interest charges and the trade deficit. If the economy falls short over a sensible timescale, say 10 years, to beat all these, then it is probably in very serious trouble.

In the end, the lenders lose faith and pull the plug.

Why this relatively simple model of economics is so difficult to grasp is beyond me. :huh:

What is amazing, is how long the UK economy has been surviving in this fictitious manner.

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So basically in the past 40 years there's only been two fairly short spells of private sector growth. 1984-90 and 1996-02.

:o

of course it's the area under the whole curve that matters, however, as I said above, this does not take into account personal debt or inflation. The increase of which has been way in excess of GDP change.

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These are really good graphs.

They highlight what to many here is obvious, that without governments spending, which is itself stealing GDP from the future, there would be little real growth so to speak. We are kidding ourselves or being deceived by politicians and the ruling elite. Nothing is ever free. (Did the North Sea oil and gas give us a temporary boost?)

Two things strike me:

One, our economic problems are deep and structural (why on earth are we sucking money out of the economy in housing debt?).

Two, isn't the focus on GDP growth as a measure of a country's success and well-being outdated?

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The important bit is how you calculate GDP and what you count as GDP, you will find that the meager GDP growth we have had is only through people buying stuff on their credit cards.

So I would question whether even the crap GDP growth they admit to is actually anything useful.

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This data confirms the suspicions of many of the pure "Austrian" and "Keynesian" commentators on this site.

It confirms the suspicions of the "true" Keynesians who believe that government spending and savings can act as a moderating influence on economic cycles. It also confirms the suspicions of the Austrians who believe that solving a credit bubble by borrowing more will result in an eventual collapse.

I look forward to hearing from the Krugmanites who believe in Austrian laissez faire policies in "booms" and asymmetrical Keynesianism in "busts".

I think that the Krugmanites are morally and intellectually bankrupt.

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looking at it in percentage terms is a bit misleading given that one of the items used on the graph is adjusted for inflation (GDP) and the other (govt deficit) is not.

The net effect is to make things look a bit worse than they actually are. (don't get me wrong we will have still borrowed about 1 year's economic output by 2015, without counting private debt)

It would have been much better to look at things in nominal or real money numbers instead of a distorted percentage figure.

However - the principle is a sound one, borrowed GDP is not a real increase in GDP.

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These are really good graphs.

They highlight what to many here is obvious, that without governments spending, which is itself stealing GDP from the future, there would be little real growth so to speak. We are kidding ourselves or being deceived by politicians and the ruling elite. Nothing is ever free. (Did the North Sea oil and gas give us a temporary boost?)

Two things strike me:

One, our economic problems are deep and structural (why on earth are the banksters allowed to suck out money from the economy via housing debt?).

Two, isn't the focus on GDP growth as a measure of a country's success and well-being outdated?

Corrected for you.

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This data confirms the suspicions of many of the pure "Austrian" and "Keynesian" commentators on this site.

It confirms the suspicions of the "true" Keynesians who believe that government spending and savings can act as a moderating influence on economic cycles. It also confirms the suspicions of the Austrians who believe that solving a credit bubble by borrowing more will result in an eventual collapse.

I look forward to hearing from the Krugmanites who believe in Austrian laissez faire policies in "booms" and asymmetrical Keynesianism in "busts".

I think that the Krugmanites are morally and intellectually bankrupt.

Yes, the other side of the Keysian coin seems often to be forgotten, most potently and recently by Brown.

FDR is much despised, though the New Deal saved Americans bacon.

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Yes, the other side of the Keysian coin seems often to be forgotten, most potently and recently by Brown.

FDR is much despised, though the New Deal saved Americans bacon.

Despised by who? Not the electorate. They voted him back in.....twice.

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How much of the private sector growth was due to government contracts?

When they nationalised railways , electricity etc what kind of boost does that give to the graphs?

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Yes, the other side of the Keysian coin seems often to be forgotten, most potently and recently by Brown.

FDR is much despised, though the New Deal saved Americans bacon.

The trouble is govts see savings and immediately start planning what they can spend it on, especially when one has abolished boom/bust because you don't need to save once you release you won't have a bust.

Although I admit there is probably a bit of a paradox here that if you then do spend the savings it's likely to trigger a boom which will mean you will have a bust but then you have no savings as well.

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What it shows quite plainly is that Raygun and Thatcher were wrong.

Globalisation is utter nonsense.

There is no 'free trade'

The criminal banksters and global corporates are stealing from you.

The Berlin wall fell and China's protectionist currency manipulation means we have had to survive on their recycled surpluses.

Of course, we could sort most of this out with anti-protectionist measures such as going back to capital controls, tax legislation which creates jobs here for the millions who are economically inacitve, a land tax, shut down the offshore tax havens, tax debt finance the same or more than equity finance, implement variable interest rates by region/postcode to offset the abomination that is inside the M25 and the 'City' and so on..........

Or do what Osborne's doing - nothing (oh, sack a few PS workers so they can be re-employed in the same job for less money by one of his chums and insist there is no alternative to the globalised nonsense, scrap pensions, give all the NHS work to US global corps, start a few more wars etc etc).

All that has repeatedly happened is the rich got relatively richer and the poor are getting relatively poorer. Politicians have no plan for this - other than to tell you you'll be happier if you shop at Tesco, fly Ryanair, subscribe to Murdoch's SKY and whatever other garbage their global free market nonsense comes up with.

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Found via Dennigers site, he's done the same for the US numbers for some time so this site has done a UK version. If this is accurate GDP has totally collapsed.

Doesn't GDP exclude any government spending on social security etc? Has government spending in this graph been adjusted to account for that?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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