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What is wrong with this picture?

Yesterday GDP was reported to have risen 3%, today reported consumer spending fell in September.

Could it be Government spending created this bogus GDP number?

6 Answers

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  • 1 decade ago
    Favorite Answer

    Stimulus created a higher GDP.

    Wasn't that the point?

  • 1 decade ago

    Not only government spending but also the incredible rise in government employment. Gov counts all this government activity in the GDP figure even though gov doesn't produce anything but rather consumes.

    The stock market is higher than realistic due to all the government money, shall we say "inflating" its alleged value.

    I take that back. Once upon a time when the world was young NASA threw off all kinds of good things (medical tech, Velcro, miniaturization of electronics like the transistor, etc) on our way to the moon during Apollo. But since then we've only fielded bread boxes in space, which is a terrible disappointment.

    And Titanium. Thanks to aerospace I have a Titanium spork for backpacking which weighs almost nothing, is stronger than steel and will last for 1,000 years.

  • ?
    Lv 5
    1 decade ago

    GDP = private consumption + gross investment + government spending + (exports − imports),.

    Exports up, imports down, government spending up, gross investment back up.

    And consumer spending only fell for the first time this year and only in September.

    The third quarter is July, August and September.

    Economics is easy, eh?

    If you do the math, about 20-25% of that is directly the result of the stimulus, but then you get the secondary effects and private investment and the benefit of the falling dollar helping exports.

  • Anonymous
    1 decade ago

    Hell yes, Investment and Consumer spending are in the tank.. the only reason for an increase was unsustainable government spending, but the 0bamunists will grasp any available straw at this point...

    Interesting that they were silent about the market being down 250 points today...

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  • 1 decade ago

    Looks like Greg has the only credible answer.

  • 1 decade ago

    Yes it did, unsustainable Government spending.

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