Stimulus Subterfuge

Its all a Stimulus Subterfuge, a Recovery Ruse, a GDP Gimmick.

In other words, the 'Great Obama Recovery'® that was announced earlier in October by the White House is all hogwash, a hoax, a fraud...a lie.

Sure, the economy was announced to have grown by 3.5%. However, that has now been revised down (GDP numbers are often adjusted) to 2.8%. 'What's so bad about that?' you might ask. 'Isn't any positive growth a good thing?' Normally, but as the blogprof points out, the only thing making this a positive number, is Stimulus cash....

That "robust" 3.5% GDP growth rate in Q3 that the AP heralded as the end of the recession sans actual jobs? That just got reduced. A lot. As in down to 2.8% now. Even that is deceiving as consumer spending, which comprises 70% of the economy, declined 0.5% during the same period (Positive GDP Fraud! Consumer Spending DOWN 0.5%. GDP Up Because Of MASSIVE DEBT!). So how is it that the GDP increased in the 3rd quarter after consumer spending decreased? Well, that's got everything to do with the 'G' in the GDP - gross. That includes consumer spending, government spending, in fact all spending. So if the consumer spending is down, one way to artificially inflate the GDP number is to increase government spending with money that the government doesn't, by the way, have. In essence, the GDP number is positive due to increased debt! It's purchased on a government card that has no credit limit.

So Stimulus cash, which is created out of thin air and injected into the economy to unknown effect, makes up 118% of the GDP growth....

So what this really means is that we will be seeing increasing GDP growth for many quarters to come, and thus a White House trumpeting a full-throated recovery, just in time for the 2010 elections.

Since only 22% of the Stimulus had been spent by the end of October, that means we have over $600 Billion left to be entered into that 'Government Spending' column that blogprof tells us about. Thus, unless consumer spending craters, this glut of Govt Spending spread over many quarters will prop up the GDP numbers for those quarters. And as it will most surely do, the White House will point to the string of positive quarters, and how their actions have saved the economy, despite the fact that it is really a Potemkin Village of economic figures...

The only problem will be the ever expanding unemployment roles....and the largest spike in employment will be found in GOP political campaigns.

[Hat Tip: Instapundit]