I wonder how much of that is government spending?
Exactly
As you, for sure, know GDP is found by C+I+G+(X−M). C being private consumption of goods/services, I is the gross Investment in the market, G is
government spending and X-M is the net exports (which is a net import currently).
The G component has contributed quite a bit to the GDP.
Also, look at the consumption levels, which make up the bulk of the incline. It makes up around 70% of GDP. A lot of the incline is due to government
programs that temporarily artificially inflate the consumption. Cash for Clunkers is an example. The idea is the momentum given from these programs
will carry us out.
But is this likely to be the case?
People are going to default on their car loans because they were sold cars they could not afford at a cheaper price they still couldn't afford. This
is like a mini housing bubble. Many of the people that consumed products with the use of the stimulus program money have already lost their jobs and
many more will.
GDP is up...... and so is unemployment. It sounds like the the 70s all over again. All we are waiting for is the inflation to hit the price of goods.
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