We don’t need no stinking wage growth or consumer spending. We’ve got our corporate arms dealers fighting evil terrorist around the globe with your tax dollars. That equals economic prosperity in our warfare/welfare empire of debt. Don’t forget to buy stocks with all your disposable income. Grandma Yellen says you need to accumulate more assets to become rich.
Why Did Q3 GDP Jump: Thank ISIS And The “War On Terror”
Submitted by Tyler Durden on 10/30/2014 09:10 -0400
As we noted previously, the main reason why Q3 GDP surprised to the upside was thanks to yet another accounting gimmick, where it wasn’t the US consumer leading to US growth, as has historically been the case, but because the government stepped up, and boosted GDP by the most since Q2 2009.
So just which aspect of government taxpayer fund recirculation was responsible for this sudden boost in US “growth” (leaving aside the philosophical debate whether government capital allocations ever lead to grwoth)?
The answer is shown in the chart below showing the quarterly change in US National Defense spending: at by $30 billion, it was the most since 2008!
In short: thank you ISIS and renewed war on terror.
And what is more disturbing, as we noted earlier, is that the Fed had this data when it decided yesterday to end QE and to present its “surprisingly hawkish” assessment of the economy, suggesting the Fed is comfortbale with defense spending as a marginal leader of US growth (and is also not seeing any snow whatsoever this winter)
So… the “Fed war put” anyone?
Source: St. Louis Fed
QE ended? Really? How about those interest payments for capital in those accounts it holds for members of the cockroach hotel?
“Invade the World” spending is a classic form of the Broken Window Fallacy.
It never occurs to chronically misinformed people (CMP) that pouring value into stuff that gets burned up but doesn’t produce any “work” simply destroys the capital that could have instead been used to grow production, innovate and lower the costs of living we all face.
Lower costs of living = higher living standards, something I prefer but CMP apparently would rather see the USA goose-step into abject, shared poverty.
An economic downturn would be good for the overall economy as well. As long as the government doesn’t pay for increased unemployment benefits and food stamps with tax increase that is.
Just think of the prosperity around the corner with increased health benefits and insufficient taxes to cover those costs.
Spending $1,500,000 for a cruise missile to target a pick-up truck with a couple of ISIS towel heads. Now that makes sense.
@Dutchman,
It does if you work (directly or indirectly) for the maker of the cruise missile.
Concentrated benefits, diffuse costs is the central economic SNAFU of all political system actions. Our “every man for himself, let the devil take the hindmost” social ethos is tailor-made for the Military-Industrial-Complex.
Mantra of the USA’s citizens:
“kill ’em all, let God sort them out as long as there’s a buck to be made.”
I wish the middle east could make a terrorbot so that we could make antiterrorbots (we could call them patriotbots or herobots) to destroy those and profits would then be infinite. Our industrial output would be through the roof. Problem solved. Hero