The GDP, Inflation, Unemployment and Other Reasons Why Our Government Sucks

So as you probably know, I am currently taking an Economics class. This class is online and I am really learning a lot from it. Sometimes I think maybe I don't want to know. Maybe I should continue to be an ignorant American and just pretend all is well in the land of the free... err I mean the land of the lied to. So this week I have been learning about macroeconomics. Sounded scary, it really isn't. It's basically looking at our economy as a whole and how it is affected and how growth is measured. So I learned about GDP (gross domestic product), how the inflation rate is measured and how our government fudges the numbers to make us think we are in less trouble than we really are and that the unemployment rate has varied little in the last 10 years.

I had to gather information for an assignment and give my opinion, which we all know I am good at. Wanna hear it? It's long but I think you will find it interesting. Check out the links and websites mentioned, if you dare....

I agree wholeheartedly with Mr. Williams’s assessment of government data reporting (http://www.gillespieresearch.com/cgi-bin/bgn). Politicians want to further their agendas; therefore, they manipulate numbers to plead their cases and to make the economy look better than it actually is. Because Americans are traditionally uninformed and ignorant, it is easy for the government to get away with this type of behavior. In my own experience I have felt the effects of inflation, have seen how unemployment has affected those around me. I have also seen firsthand how little our economy is growing in comparison to spending by the US government. I was particularly disturbed after reading a paper written by John Schmitt and Dean Baker of the Center for Economic and Policy Research. The article is at http://www.cepr.net/documents/publications/JSDB_08recession.pdf and discusses what Americans are in for with the projected recession of 2008. In this paper the authors say that, “A recession would also increase the national poverty rate by between 1.6 and 3.5 percentage points (from a 2006 level of 12.3 percent), raising the number of individuals living in poverty by between 4.7 million and 10.4 million people.”

In my own life I have seen people I care about lose their jobs while facing increasing personal debt. A few have claimed bankruptcy in what should be the prime of their lives. There is constant talk around the dinner table with my family about current debt levels and how awful it feels to have debt and feel like there is no way out of it. I can imagine that politicians must have this feeling in the back of their minds in regards to our national situation, but ignore it to further themselves. While this is the basis of our economy and capitalism, it does no good for our country as a whole. On the CEPR website (www.cepr.net) I found an economic calculator. I punched in the number of 34.8 trillion dollars, that representing what Williams asserts is America’s negative net worth. I think he is probably close, also disturbing. However, when those 34.8 trillion dollars are spread out per capita, it would cost each American $111,444.16 in one year to pay our country’s net worth down to zero. That figure scares me the most. Many Americans cannot afford health insurance or adequate amounts of food to feed their families. I look at my two year old son and wonder what this world and our government will be like when he is my age and it truly scares me. After reading more of the paper written by Schmitt and Baker, I saw that however optimistic I, or politicians, want to be, the future looks bleak for our country unless drastic changes are made soon. As was encouraged by a blog that I came across (http://theviewfromtheveranda.blogspot.com/2007/07/america-negative-net-worth.html), my husband and I plan to follow a simple statement; “So get yourself out of debt--now. Be frugal. Save aggressively. This is not paranoia; it's reality.” I think that is all too true in our society.