Why the U.S. GDP number may be as bogus as a three-dollar bill

A U.S. money manager grasps what the degrowth “movement” has been saying for years.

Toronto, Globe and Mail, Monday 16 May 2011

In 10 days, Washington will release its revised estimate of first-quarter economic growth. This figure, based on more complete data than were available when the first assessment was issued toward the end of April, will undoubtedly grab headlines… tell us GDP is growing at a faster clip than forecast, and we erupt into loud cheers… But what if the number turns out be fake?… That’s the provocative question posed by renowned U.S. money manager Rob Arnott… That’s because it will not take into account how much of the American expansion stems from the government’s deficit-spending binge…

“Gross domestic product is used to measure a country’s economic growth and standard of living. It measures neither,” Mr. Arnott says flatly. “GDP measures spending. It does not measure prosperity. Unfortunately, the finance community and global centres of power are wedded to a measure that bears little relation to reality.”

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