from Economic Noise:
This is some economic recovery. At least that’s what the ruling class and their minions in the media would have you believe. A form of economic drug dealing is the tool being used.
What is being reported as economic recovery and success is not. All economic news is being spun and manipulated by government and the media. There is no recovery and there cannot be one. Arguably, our economy has been one of smoke and mirrors since the 1980s. Debt has been the means of providing the smoke and mirrors.
GDP has been subjected to the drug of debt. Government has become a junkie and engages in economic drug dealing to hook the public.
The Debt Fallacy
Only the government would use a measure of economic well-being determined by spending. That is what GDP is and what it measures. No individual should believe he is better off because he spent more this year than last. Rational people use net worth as the way to measure whether their condition improved or not. If your net worth decreased, you regressed regardless of your level of spending.
Debt allows a nation to spend more than it earns. But debt is not some magical elixir. Economies can grow with and without debt. Debt is not evil. It is a means to bridge gaps in income temporarily. It may also be a means to expand investment in productive ventures which themselves service the debt incurred. But that is not how government is using and promoting debt.
All debt does is allow spending to be moved forward in time. Current period spending increases but always at the expense of future period spending. Whatever is borrowed must be paid back. Interest expense means that more must be repaid than was obtained. The only way that debt can be serviced is by spending less in the future.Whatever is gained today is more than offset tomorrow.
Because government evaluates the economy in terms of spending (including their own), encouraging more spending is an attractive solution. Debt is the means to “juice” the current period’s performance. Unfortunately, using debt is like having a drug habit. The only way to avoid the future pain is to keep increasing the dosage of the drug. Continuing to avoid reality ensures the death of the addict (and the economy).
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