How can the government be off by $50 billion in healthcare expenditures from its first estimate in April to its final estimate two months later? Do they just take wild assed guesses with this crucial economic data? Or do they manipulate the numbers to achieve their desired outcome?
They have decreased their estimate of real GDP by over $100 billion since their first report. If your numbers are that horribly inaccurate, why report them at all until you are sure?
The talking heads on CNBC and the faux mainstream media journalists will blather about weather and assure you the future has never been brighter. Meanwhile, on the historical FACT side of the ledger, every single time in U.S. history that GDP was negative 1.5% or worse, the country was either in recession or about to enter recession. EVERY TIME!!!!
But the MSM will tell you why this time is different. So it goes.
Here Is The Reason For The Total Collapse In Q1 GDP
Submitted by Tyler Durden on 06/25/2014 09:23 -0400
Remember back in April, when the first GDP estimate was released (a gargantuan by comparison 0.1% hence revised to a depression equivalent -2.9%), we wrote: “If It Wasn’t For Obamacare, Q1 GDP Would Be Negative.” Well, now that GDP is not only negative, but the worst it has been in five years, we are once again proven right. But not only because GDP was indeed negative, but because the real reason for today’s epic collapse in GDP was, you guessed it, Obamacare.
Here is the chart we posted in April, showing the contribution of Obamacare, aka Healthcare Services spending. It was, in a word, an all time high.
Turns out this number was based on…. nothing.
Because as the next chart below shows, between the second and final revision of Q1 GDP something dramatic happened: instead of contributing $40 billion to real GDP in Q1, Obamacare magically ended up subtracting $6.4 billion from GDP. This, in turn, resulted in a collapse in Personal Consumption Expenditures as a percentage of GDP to just 0.7%, the lowest since 2009!
Don’t worry thought: this is actually great news! Because the brilliant propaganda minds at the Dept of Commerce figured out something banks also realized with the stub “kitchen sink” quarter in November 2008. Namely, since Q1 is a total loss in GDP terms, let’s just remove Obamacare spending as a contributor to Q1 GDP and just shove it in Q2.
Stated otherwise, some $40 billion in PCE that was supposed to boost Q1 GDP will now be added to Q2-Q4.
And now, we all await as the US department of truth says, with a straight face, that in Q2 the US GDP “grew” by over 5% (no really: you’ll see).