What Recovery?
If you’re like me you are more than a little frustrated by the mainstream media parroting how we have been in a state of economic recovery for the past year. Huh? There are very few things that anger me more than manipulation by our media or governments so I started to do some digging. Keep reading and I’ll explain a little about why the GDP recession provides false recovery data.
The Language of Money
Listen, I am no economist by any measure. I totally understand how frustrating it can be to try to understand what’s going on by deciphering the intentionally confusing language of economics. However I am more determined than ever to gain as much understanding as I can despite this attempt to use words as a smoke screen. I would suggest you forge on ahead with me.
To begin to answer the question, “What is a recession?” we need to take a look at how economic health is measured. In general, a recession is determined by the Gross Domestic Product, or GDP. If this number goes down and stays down for a few months, we have a recession. If, however, the number goes down by more than 10 percent and lasts for a number of years we are in a depression. Trust me, our leaders do not want to use the “D” word any more than they want to announce a new plague epidemic.
Economics 101
Gross Domestic Product (GDP) is a measurement of the goods and services produced within a geographical territory’s economy. So, it measures how much Americans produced within the country as opposed to American companies abroad. This number is very easily manipulated and we’ve seen some of this recently. While the GDP shows economic growth, it curiously stopped accounting for small business. Those same businesses that have been the hardest hit by the recession.
Gross Domestic Income (GDI) is a measurement of the entire income of the U.S. including those companies overseas. In theory the GDP and GDI data should show the same thing. But it has been noted that the discrepancy between these two indices is the greatest it’s every been in history. While GDP shows recovery, GDI begins to hint at depression. So in case you were wondering why you don’t hear talk of GDI, enough said.
CPI, or Consumer Price Index, is another favorite spot for manipulation. This number compares the cost of living with the mean income levels to give an idea of how well we are all doing financially. Recently however, the costs of food and energy consumption were removed from the CPI’s main calculation to provide data which showed we all have plenty of money to live on…as long as we don’t eat or consume energy.
Educate Yourself
Never before has it been so imperative that we all learn everything we can about the mechanisms behind our current crisis, the difference between GDP recession and the actual numbers as well as learning about our monetary system as a whole. The only way you can effectively protect yourself is to educate yourself.
Have you been wondering if the GDP recession measurement is really telling the truth? I can help you learn how to start protecting yourself and your financial future from the current economic crisis. Don’t wait until it’s too late!