The government is spewing more Phony GDP numbers this morning.

[Neubarth]

We know that GDP can be bought with government spending. Knowing that, GDP is a totally useless indicator of economic health. A good indicator of economic health would the percentage of population employed in full time jobs. In that regard, the US is a Third World nation.

 

[PoliticalChic]

We know that GDP can be bought with government spending. Knowing that, GDP is a totally useless indicator of economic health. A good indicator of economic health would the percentage of population employed in full time jobs. In that regard, the US is a Third World nation.

I saw Laffer intervied recentlty, and he stated that the Obama Administration didn't end the Bush Tax Cuts this year, to keep GDP high, but when they are ended next year, the drop in GDP will be precipitous. Laffer also warned of the effects of the coming tax increases.

Arthur Laffer has popularized the idea that there is a tax rate that maximizes revenue, and the rate is knowable and at a much lower level than previously believed. (Major findings show that the bellshaped Laffer curve is statistically significant and that the revenue-maximizing tax rate is between 32.67% and 35.21%.ScienceDirect - Journal of Socio-Economics : Estimating the laffer curve and policy implications*1)

a. “The positive effect of the enormous Fed monetary expansion will be petering out. Monetary expansion does not create long-term economic growth. The Fed has to press the accelerator faster and faster to maintain the same stimulative effect. But if it does, then inflation starts to arise, accelerating faster and faster if the Fed continues. Indeed, the runaway expansion of the monetary base the Fed has already engineered will generate explosive inflation if the Fed does not pull it out in time.”

b. “These purely ideological abuses of economic policy will end up punishing working people nationwide. The top income tax rate is scheduled to increase by close to 20%, the capital gains tax rate by at least 33%, and the top dividends tax rate by 164%. Further tax increases in the pending health care legislation would raise these tax rates still more. Laffer adds that starting at the end of 2010,
‘the U.S. will have a payroll tax rate increase, an estate tax increase, and income tax increases. There's also a tax increase coming in 2010 on carried interest [further discouraging investment]. This rate will rise from its current level of 15% to 35%, and then it will rise again in 2011.’
The American Spectator : The Coming Crash of 2011