David Smith On Uk Gdp

[crashmonitor]

Can't link the Sunday times article...........they have the blocks up.

But in summation, refers to the UK forecast to top the G7 this year at 2.9%. Mentions about Blanchard's grudging apology from the Gallic cheerleaders at the IMF, where their own team France has failed spectacularly.

Then covers the circa 5% forthcoming upgrade from the ONS who have been under-recording GDP once again and we may be 5% shy of where we should be. Says the trajectory of the recovery may have been all wrong, no doubt we were never close to that double dip, let alone the triple dip Balls got excited about.

Remember they cocked up big time when Lamont's green shoots were real after all. And again during the Healy recovery.

He does point out that we love to be overly pessimistic about the economy and talk it down. That rings a bell on here.

I would agree that it beggars belief that we have lower output now than in 2008. The strong employment numbers were always at odds with the sluggish GDP in 2012.

Edited April 13, 2014 by crashmonitor

[zugzwang]

Smith is a halfwit. Wrong about everything for years and years. Wrong about the Crash, wrong about the propsects for recovery. The only thing that's 'recovering' is the UK's debt-to-GDP, up from 470% five years ago to 530% today and hurtling off to infinity by 2020 as Osborne borrows 7% of GDP every single year to generate 2% growth.

[Executive Sadman]

Is smith an actual person, or just a machine that relays press releases from Tory HQ?

I have my doubts.

[Democorruptcy]

Smith is a halfwit. Wrong about everything for years and years. Wrong about the Crash, wrong about the propsects for recovery. The only thing that's 'recovering' is the UK's debt-to-GDP, up from 470% five years ago to 530% today and hurtling off to infinity by 2020 as Osborne borrows 7% of GDP every single year to generate 2% growth.

Primary Deficit Sustainability (PDS)

((Growth + Inflation) - Borrowing Costs ) has to be greater than Structural Deficit % for the debt to stop growing and be sustainable.

Are we OK?

[Dorkins]

What's the point in getting excited about GDP? UK real GDP per capita was £17,075 in 1995 and is £22,577 now (source), an increase of 32%. Who would have a better life, a median wage earner in 1995 or a median wage earner in 2014? GDP "growth" doesn't seem to be good for the living standards of ordinary people.

[frederico]

GDP is just a label given to a set of calculations that may be useful for something or for something else,

In this case, they indicate imaginary wealth.

[zugzwang]

Primary Deficit Sustainability (PDS)

((Growth + Inflation) - Borrowing Costs ) has to be greater than Structural Deficit % for the debt to stop growing and be sustainable.

Are we OK?

The 'structural deficit' is just a meaningless abstraction that Osborne and Carney use to disguise the fact that the UK is bankrupt. By calling the deficit structural rather than cyclical it allows them to get away with borrowing far more every year than would be prudent. The output gap is made up of bubble jobs in finance and housebuilding, these can only be brought back by restoring bubble lending conditions, something Osborne has succeeded in doing to an extent by using govt money to subsidise mortgages.

This chart is clearly out of date but illustrates the recent trend. UK debt-to-GDP was 470% in 2009, I expect it to exceed 550% by the time of the GE and to carry on rising continuously until the country defaults.

[alexw]

The 'structural deficit' is just a meaningless abstraction that Osborne and Carney use to disguise the fact that the UK is bankrupt. By calling the deficit structural rather than cyclical it allows them to get away with borrowing far more every year than would be prudent. The output gap is made up of bubble jobs in finance and housebuilding, these can only be brought back by restoring bubble lending conditions, something Osborne has succeeded in doing to an extent by using govt money to subsidise mortgages.

This chart is clearly out of date but illustrates the recent trend. UK debt-to-GDP was 470% in 2009, I expect it to exceed 550% by the time of the GE and to carry on rising continuously until the country defaults.

But isn't every country in the same boat? Debt rising faster than GDP? If so doesn't this tell us that the issue is not really one of gov or private sector borrowing, but of flaws in the underlying economic system? After all 2008 to 2012 showed us what happens to the economy if you try and deleverage debt, so should not the emphasis be on redesigning the system so that we don't need ever growing debt (vs GDP) for the economic system to properly function?

[Killer Bunny]

Is smith an actual person, or just a machine that relays press releases from Tory HQ?

I have my doubts.

God. What is with party politics?

These guys support anyone in power. He was the same sycophant pre 2010.

[Executive Sadman]

But isn't every country in the same boat? Debt rising faster than GDP? If so doesn't this tell us that the issue is not really one of gov or private sector borrowing, but of flaws in the underlying economic system? After all 2008 to 2012 showed us what happens to the economy if you try and deleverage debt, so should not the emphasis be on redesigning the system so that we don't need ever growing debt (vs GDP) for the economic system to properly function?

The only way a debt-money system would seem sustainable to me is one of pure capitalism. Where if someone makes a bad investment that doesnt add to GDP at least as much as it costs, they go bankrupt, default, it gets written off and the money supply shrinks until people come up with better investments.

Cue projections of deflationary death spirals.

Personally i dont see why people see it as a 'death spiral' In the US. It wasnt after 1921 and it wasnt again after 1945. The money supply shrinks some. Some people go under. Then the money supply picks up again.

Since 1971, its never been allowed to shrink at all, with the exception of about 12 months between mid 2008-2009.