Another Silly Recession Headline

I clipped this headline off of Zerohedge this morning.

So, why is it suggested that the U.S. might be in a recession, when it obviously is to anyone with at least one eye, who is looking?  We have a growing homeless population. Banks are failing. Small banks are losing deposits. Retail stores are closing. Home prices have started falling and so on. 


So, why is GDP still o.k. but just might head into a downturn?

Is there anyone in the country who benefits from ordinary people thinking things are looking rosy, while they are doing so poorly personally?  It sure seems that there are. The streets in San Francisco are looking like slums. But, no, everything is still fine, especially because good times are right around the corner again. Right.

Here is the reason we are in a recession but officially we are not. Government spending can be used to adjust GDP. Then there are entire industries that are controlled by government. Twenty five percent of the population work for the government. Then, there are industries such as healthcare, where government guarantees its profitability. The fact is that government controls the essence of a large portion of the population. 

If the level of government spending depended upon tax revenue, none of this would be possible.  Government can spend as long as it can borrow. As long as government can borrow, the incomes of a large portion of the population are going to remain in tact. Those whose incomes are derived from government and laws that are passed, are still spending as if they are immune from the real issues others face. They are indeed immune …. for awhile.

As a solid rule of thumb, any government statistic is manicured to look as positive as it possibly can be.

What we notice is that the economy is rotting from the bottom up. Those at the bottom gain their essence from outside the areas government influences. 

So, do you think we just might head into a recession? Before making any plans for a recession, it is truly prudent to wait until official numbers from government say “Yes, the economy is in fact in a recession.”, right?


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