GDP Growth vs. Government Spending

GDP growth is chaotic.



Therefore to see if there's any kind of trend you need to average it out over longer periods of time. I did this on a 10 and 20 year trailing average, where I simply took the past 10 and 20 years worth of economic growth and averaged it out into a "rolling average."


I like to call this figure, especially the 20 year rolling average RGDP growth, "Generational RGDP Growth" because the 20 years spans a generation, economic booms and busts included, and shows their overall economic productive capacity over those years.

Now what I'm going to do is very simple, because that's what economics is. It's very simple (plus i don't want to confuse any leftists and socialists).

I took Generational RGDP growth and compared it to government spending (state and federal) as a percent of GDP. And wonders upon wonder, guess what? The relationship is inverted.



What this means is that as government spending has gone up, economic growth has gone down.

This simple chart has many economic ramifications, most of my readers already intuitively understand. But, for those of you who vote for your presidents based on their pecs, let me spell it out for you.

1. This is why the stimulus and by large Keynesian economics won't work. Understand the government DOES NOT PRODUCE ANYTHING. It does NOT PRODUCE WEALTH. It doesn't make X-Boxes. It doesn't make food. It merely TRANSFERS WEALTH FROM ONE GROUP OF PEOPLE TO ANOTHER. Now there are some genuine services that the government provides that helps society and does show up on GDP. BUT STIMULUS MONEY TO ART INSTITUTES, ACADEMIA AND WHATEVER OTHER FLOWERS AND PUPPIES POPPYCOCK HAVE YOU DOES NOT PRODUCE ANYTHING. The reason why is that even if an Obama-fanatic sculptor produces a worthless and sinfully ugly government piece of art for the local building, the money used to pay him came from somebody else, ergo a net production increase of ZERO.

2. The government is less efficient than the private sector.

Do you want growth?

Do you want jobs?

Do you want food on the table?

Then you better let the people have the majority of the money and not put it into the government. History has shown you this via this chart. Your eyes are not deceiving you. Look at the chart again. And no, I'm not Michael Mann or Phil Jones. The data has not been tainted and comes directly from the FRED Database at the St. Louis Fed. You can recreate this very same chart on your own, whereas I cannot recreate the hockey stick chart, so if you believe in global warming, you better damn well believe this chart.

3. No, majoring in sociology or planning on becoming a government worker will not help this situation.

See, I know what a lot of you are thinking. "I want to help people because it sounds like an easier job than engineering...errr....I mean, because I am noble and moral. Ergo I will go and work for the government as a social worker, a professor or run for public office."

The problem is none of these jobs PRODUCE ANYTHING THE POPULATION NEEDS NOR REALLY WANTS. And as a higher and higher percentage of the population goes and majors in worthless subjects in the hopes of a cushy job that doesn't produce anything, but merely transfers wealth, you can expect GDP to drop further.

4. If growth keeps dropping, then where precisely are you people going to come up with the money to pay for...

social security
medicare
nationalized health care
the Obama-corps
the stimulus
education
government financed day care

not to mention the extra money we'll need to pay back the national debt?

You see, the governments combined (state, local and federal) already spend about 45% of GDP, leaving only 55% left to be taxed (difference in revenue vs. spending duly noted), how much more do you think the economy will take before people just stop working altogether?

Is everybody supposed to work in government?

Who, might I ask, is going to produce the I-Pod you want?

Who, might I ask, is going to produce the Wii you want?

Who, might I ask, is going to produce the computer networking system so you can e-mail your friends, let alone put the food on your table?

Or are we supposed to be like the Pelosi's, the Bush's and the Gore's. Generation after generation of losers who never worked a real job in the private sector?

Of course, I know all of my regular readers understand this. My regular readers get this simple logic. Not to mention before they form opinions, they get the facts first. Not form opinions and then find facts.

But good lord, to the 60% of the population who voted for Obama, when does reality sink in? What does it take to get you people to grow the hell up, drop it with your naive, college-age thinking and idealism, and intellectually and honestly admit you have no FREAKING clue how the real world and economy works. LET ALONE take the time to study the federal effing budget and do some simple mathematical calculations much like you would your own personal finances to see if any of this socialism BS is even affordable, let alone feasible. Let alone (and this group really confuses me) for those of you with children, start to stop and really think about what you're doing to your childrens' financial future? When do you wake up?

Alas, what can I do aside from make a record of it here on this blog so that a thousand years from now historians will look back and say, "Wow, look how insane the population was. There was this one guy over here that saw it coming, but the rest of them were all doped up on REality TV, Obama's pecks, bread and circuses, they couldn't even understand how everybody working as a social worker and nobody farming the fields would result in a collapse of society!"

I'll be long dead by that time, and I'm supremely confident I'll be proven right, but in the meantime, good lord, why would anybody invest in America?