What last month had appeared to be third-quarter growth of 3.5% in gross domestic product turns out to have been a more modest 2.8%. Consumer spending was pared back to 2.9% from 3.4%. The cash-for-clunkers subsidy produced fewer new-vehicle purchases than first estimated. In short, we aren't getting much bang for our $787 billion stimulus bucks.
Wednesday, November 25, 2009
GDP revised downward
From The Wall Street Journal:
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The article is just more cheer-leading for those who need no convincing.
ReplyDeleteA couple of points:
1. It's easy to criticize when one doesn't have to live with one's own harsher, ideologic world.
I.e., we don't know what GDP would have been if the auto industry hadn't been stimulated, causing more direct bailouts to auto companies, their suppliers, and greater numbers of laid off workers.
2. The actual BEA press release says:
"Motor vehicle output added 1.45 percentage points to the third-quarter change in real GDP after adding 0.19" percentage point to the second-quarter change
That's a whopping 8 fold increase.