Creative Statistics Hide US Contraction; Trillion in Debt?

I have so forgotten basic macroeconomic theory. ;_;

Originally Posted by Gumby

What I want to know is where this guy John Williams gets his information that is so much different that what is being reported.

I'll admit that I skimmed through the article, but most of the statistics that he quoted make enough sense on their own. Effective consumer prices are rising to nasty levels thanks to oil prices and the housing bubble, unemployment rates and GDP statistics are fudged to help politicians, and the national debt is very high right now, though it's actually not as large as the debt of some other first-world countries...the Japanese federal debt is something like 150% of their GDP.

I do question the backing of some of his statements (though again, I didn't read terribly thoroughly), and so long as the Chinese keep buying our federal bonds happily, the government can at least sustain spending. On the other hand, if the Chinese suddenly quit buying government bonds...well, it wouldn't be pretty. Suffice to say that I don't think you'll see the American government pressing the Chinese too hard on human rights or labour issues anytime soon, and if the dollar drops in value versus the Euro or Yen, who knows what'll happen?

Jam it back in, in the dark.

Originally Posted by xen0phobia

Also its important to remember that nearly HALF of the national debt is goverment owing other parts of government money. It doesn't even involve the private sector.

Well, the external debt of the US is still over 8.8 trillion dollars according the the World Factbook, and that doesn't even include money that the government owes private banks within this country.

It's true that deficit spending isn't necessarily harmful, sure, but I still worry about it. If foreign governments quit buying our bonds for whatever reason...default on payments, drop in the US dollar's worth, or just making the wrong world leader angry...it's going to break the economy and the government's ability to function. ._.

future econ major...I'd ask my current professor about this stuff, but he's really kinda unhelpful. ;_;

There's nowhere I can't reach.