subject: Learn The Difference Between Gdp Recession And The Truth About Our Current Economic Crisis [print this page] So...There's a Recovery? So...There's a 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.
Language of the Economist
totally understand how difficult it can be to even gain a rudimentary understanding of our economy and the mechanisms behind it. But I am determined to learn as much as I can despite the smokescreen of overly complicated language intended to frustrate and confuse the people. I strongly recommend you do the same.
Our first question is usually: "What is a recession?" To answer that we'll need to understand how economic growth is measured. In general, the Gross Domestic Product, or GDP, determines a recession, recovery or depression. If the GDP goes down and stays down for a few months, it's called a recession. If it goes down by 10 percent or more and stays down for a few years, it's a depression. And we both know that the leaders to not want to use that "D" word at all.
Economic Elements 101
The Gross Domestic Product (GDP) is a method of measuring the goods and services that were produced in a specific geographic territory and its economy. This number does not include what American companies overseas have produced, just what's been produced in our land. One way to manipulate this number as seen recently is to not include small businesses, the same businesses that have been hit the hardest by the recession.
GDI, or Gross Domestic Income, is defined as the total income from American owned businesses both here and overseas. Theoretically, the GDP and GDI should produce the same data. However critics are noting that the discrepancy between these two numbers is the largest gap in history. The GDI numbers today show what we already no, the recession is still here and getting worse.
One of my favorite numbers game of late is with the Consumer Price Index. This measures how much it costs per person to live as compared to the median income ranges. However, recently the costs of energy consumption and food costs were taken out of the main CPI equation and treated as separate entities. So it's true, we all have plenty of money...as long as we don't eat, use electricity or put gas in our cars.
Education is Power
Learning about the GDP recession measurement is just one small step. It is more important than ever that we educate ourselves about our economy, our monetary and banking systems and the mechanisms involved in this terrible numbers game. I do hope you'll join me and begin to take steps to protect your financial future.
