When the USG wants to borrow money it issues Treasury Bonds, and the Federal Reserve buys them using newly printed money. The USG then spends the money, this makes GDP rise, and the economy appears to grow, any everyone is happy. But this neat arrangement hides the fact that the growth is all based on Fed money-printing, not on real production.
So how much real production has happened since 2008? – none, in fact growth has been negative!.
Trump Economic Fabrication no Different than Obama or Bush Economic Deceptions
November 13, 2016
GDP or gross domestic product is the big lie used by politicians because it neatly avoids the debt undertaken to achieve it’s purported growth. The chart below shows annual US GDP growth back to 1980.
However, the chart below shows both sides of the equation…the annual GDP growth and the annual federal debt incurred, spent, and (thus counted as part of the growth) to achieve the purported growth.
Below, annual GDP minus the annual growth in federal debt to achieve that “GDP growth”. The last eight years were abysmal and 2016 the third worst year in history (this even assumes Q4 GDP comes in at a relatively strong 2.5%). This trend ain’t yer friend.
Over the last eight years, the Obama economy (as measured by GDP) grew $3.9 trillion and federal debt grew by $9.6 trillion…said otherwise, GDP contracted $5.7 trillion when all the new debt is subtracted.