a trillion is a lot!08 Jul 2006
Did you know that just over the past 11 quarters, dating back to the June 2003 Bush tax cuts, America has increased the size of its entire economy by 20 percent? In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy, and much larger than the total economic size of nations like India, Mexico, Ireland, and Belgium.
First, there’s the small matter that the $2.2 trillion of GDP growth appears to be calculated using real dollars and not 2000-chained dollars, but that’s forgiveable. Next up there’s the slightly bigger matter that although GDP did increase by $2.2 trillion ($1.2 or so in 2000 dollars), the national debt also increased by $1.9 trillion. Oops. This guy has covered that sleight of hand very nicely:
What was missing from Mr. Ludlow’s analysis was the fact that the national debt grew by $1.9 trillion over the period of that $2.2 trillion GDP growth. Traditionally, we subtract debt when calculating net worth and growth (Can you imagine saying to your spouse, “Honey, we grew our income by $50,000 with that loan we took out!”). So if we do that, we discover that the actual growth minus debt for the period was about $300 billion.
Be sure to check out his graphs, which makes a comparison for a growth period that highlights the difference that national debt makes.
But hey, why let meaningful statistics get in the way of some rah-rah Bush-lovin’? Don’t mind me.
I won’t fisk the rest, since when you lead with that sort of amateur-hour economic disingenuity, there’s really no credibility left to be had.