Peter Schiff – Phony Government GDP Numbers Hide A Shrinking U.S. Economy

SchiffMoney manager Peter Schiff claims the real U.S. Gross Domestic Product (GDP) is closer to “$13 trillion” than the official government number of “$16.6 trillion.”
That is a discrepancy of $3.6 trillion! Schiff explains, “The government keeps telling us the economy is getting bigger, but millions of Americans are leaving the workforce. We’ve got record numbers of people on food stamps . . . and part-time jobs are replacing full-time jobs. How is that consistent with a growing economy? It’s not.” Schiff goes on to say, “It just makes perfect sense to me the economy is shrinking, yet the government is using phony numbers to try to convince us a shrinking economy is growing.” So, how does a shrinking economy pay off an enormous growing debt? Schiff contends, “So, when interest rates go up because the world realizes we have too much debt relative to the size of our economy, consumers can’t spend anymore, and now the economy collapses in size and the debt balloons . . .

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Comments

  1. The Grinch says all governments always lie all the time.  China’s GDP was overstated by $1 trillion according to some sources.  Does that mean ours is over stated by $3 trillion.  State Local and Federal government are now 43% of the entire GDP.  That’s about $6.5 trillion in GDP that is little more than a sucking black hole. 
      US GDP? 
    Probably no more than $8 trillion in real GDP produced by real people with real jobs.  A service economy is also a problem since we don’t built as much as we used to.  About 15% of GDP is manufacturing.  Not an optimal situation for a large country.
    And yeah, I’m a real SOB this AM with everything that’s going on right now
    Sheesh!

    • Didn’t the US gov add intangible assets to the GDP spreadsheet back in July? If my memory is correct it would add about 1.5% to the figure.

    • We are all well aware of the fact that the US Gov (BLS) and the Fed have cooked the books in just about every way possible.  We know that inflation is much higher than they admit and that employment is much lower than they admit.  Any number they bring up can and will be manipulated such that things look better than they really are and the policies of the knuckleheads in DC look better than they are too.  The problem they face, however, is that fake numbers are one thing and the reality that we are all experiencing is quite another.  As our experience of reality and their claims diverge, they have less and less credibility.  This reduces their effectiveness at jawboning and changing things for better or worse via talking about them.  Since politicians are all about talk, this diminishes them and the harm they can do as well.
       
      Off-hand, I cannot think of a single number the Gov or the Fed publishes that I consider trustworthy.  After being lied to constantly, it is now impossible to trust these people.  They worked hard to get themselves into this position and are now fully there.  Any more comments from them about how great things are or what they want to do to improve our lives will be shoveled out onto the compost pile where they belong.
       

  2. http://www.utsandiego.com/news/2013/aug/22/tp-how-the-us-is-encircling-china-with-military/ China may hold the US by the neck economically, but there is a reason Jim Sinclair says that the US will be dragged into a future gold standard but that no one will mess with the US in overt ways. The US can still hurt them.
    http://www.washingtonpost.com/blogs/worldviews/wp/2013/08/21/how-north-korea-got-itself-hooked-on-meth/  These guys are Iran, Syria, Russia and China’s friends… and I doubt there are massive CIA meth rings in North Korea.
    Thus, as wealth goes East, remember that there are MANY factors at play.

  3. 10 yr treasury just hit 2.9 highest ive seen it so far…when does the pin pop the bubble?!

  4. Keep a watchin’ the Ten. The Ten is your Fren. September is the magic month for the real discovery of the financial melt down IMO!
    G-20 plus other negative events will cascade the truth and verify all lies.

  5. GDP and tax revenues % should be in a certain range, usually tax revenue in the US is around 17-18% of GDP, the last few years tax revenue underperformed the GDP, so the GDP was most likely over stated. But, inflatiing asset prices (stocks and real estate) sometimes brings in extra tax revenue in the short term, most likely this year.
    Peter is calling for a economic meltdown becasue higher interest rates will kill consumer spending, I think that is going a little to far at this point, car and student loans will remain stable in the near future, and those two sectors are the main growth of consumer credit.
     

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