9/08/2012

Some somewhat useful charts on the economy

Some of these charts don't put values in real terms and others don't put things in per capita terms.  Either the choice was political or the person picking the charts doesn't understand the issues involved or both may be true.

Labels:

1 Comments:

OpenID vitalibertas said...

John,

There are other things that are not explained in the charts either. GDP has risen, but what are the elements of GDP that have gone up? The unemployment rate has dropped, but only because the participation rate has dropped. Also, underemployment is stubbornly high. If you consider the participation rate changes in relation to population growth, unemployment would be at around 11%.

What also is not considered are the unseen aspects of the Federal Reserve holding interest rates at near zero for so long. This is forcing "retirees" to come back into the labor force because their interest on savings has been destroyed. The low rates are also putting pension liabilities at risk because the funds are only earning 1% when they need to earn 7%.

The housing price charts are also misleading because banks have shadow inventories of foreclosed houses that they are not releasing to the market so as to not negatively impact pricing. We are also not even touching the shadow inventory of short-sale homes that are extremely dependent on employment and state laws. We are also not considering the "off-book" assets the banks have been allowed to distort and shift on to government owned entities, making this a public liability.

Lastly, no one is considering that a huge amount of the participation rate drop is a shift to permanent disability and other public entitlements, as well as adding to the guaranteed student loan debt. Of $1 Trillion, 1 in 6 are in default. What are the prospects of subsidized loans getting paid when you can't get a high paying job when you graduate.

These charts are entirely misleading when you understand the elements that make them up and what's not being counted.

9/11/2012 4:37 PM  

Post a Comment

Links to this post:

Create a Link

<< Home