Friday, July 30, 2010

Say it with me: RATE OF CHANGE IS NOT CHANGE

Sometimes I'm wrong and this is one of those times. I thought that complaints over the drop in rate of change in the GDP may have been put out there to dog Bush for the faltering economy right before an election. I was wrong. It was not. We have this great news that we're still not in a recession. The GDP is up 2.4%! How do we report this? If you're the AP, you complain that there wasn't as much growth as last quarter. Either the 3.6% was a surge or this 2.4% is a dip (or maybe a little of both). We're not really sure which. But what we can be sure of is that even if growth were to increase forever (which is possible given an ever-increasing population), the rate of growth simple will not increase forever. Let's take our good news, see what we can do to further improve the situation without panicking, and be happy with the growth we did accomplish.

2.4%, baby! Onward and upward.

3 comments:

Cousin Pat from Georgia said...

Or our economy could still be based on moving money from one place to another instead of actually building or growing things.

Dante said...

GDP = private consumption + gross investment + government spending + (exports − imports)

If we're just moving money around, the GDP doesn't change. (I know in reality there are loopholes to that statement, but not 2.4% worth of loopholes.)

Cousin Pat from Georgia said...

It isn't just moving money around, to be sure. But when that makes a huge portion of your economy, especially the part that allows the growers and builders the credit with which they build and grow stuff, the thing is inherently unstable.

Especially after that huge loss of credibility that our goods are priced correctly.