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PostCalculating GDP, Debt: It's a Dismal Science (Timothy Brown, USA, 09/19/17 4:40 am)
When calculating national debt and GDP, try factoring in the estimated margins of error. We don't know within an estimated +/-15% what our GDP is--crime, drugs, prostitution, larceny, hidden assets, black (off-the-record) employment, off-shore deposited moneys, etc. Nor do we know what our real population is within +/- 10% (some hide from the census, some the census just plain misses, illegals, sex slaves, etc.). At one point, Mexico didn't know its population within +/- 20% or GDP within +/-30%.
Besides, I always keep in mind what Mark Twain, my favorite economist, said.
"There are three kinds of liars--liars, damn liars, and statisticians," to which I add politicians.
In every country where I did macroeconomic analysis, I would look first at the official statistics, then I'd try to find someone active within the "informal" economy (illegal casino and slot machine operators in the Netherlands had great "real" data). In Paraguay--where I developed a Fat Colonel Index--it was the shops openly selling smuggled goods or goods stolen out of US Embassy imports), and then I would just wander around both rich and poor neighborhood, local food and sundries markets and upscale shops and see how people were dressed, how well--or badly--fed they were, how proud they seemed of their homes, etc.
All this just to say that I agree entirely that our national debt is growing too fast and is now bigger than ever. But I also see that, while there are pockets of real poverty and too many people are in need, by both world and historical standards, we're doing rather well.
Besides, all it will take is a really good devaluation of the dollar to reduce the nominal value of our debt.
But I digress.
JE comments: Weimar Germany "succeeded" in reducing its reparations debt through hyperinflation. The eventual result: Hitler. Maybe this explains Germany's aversion to debt in general.
From generals to Colonels: Tim: please explain your "Fat Colonel Index." When they're fat, does this mean things are going well economically? (Coronel is an honorific term in Paraguay for a local strongman or caudillo. Brazil has its analogous Coroneis.)
It used to be that girth meant prosperity. Now, with the "you can never be too thin or too rich" culture, it's the other way around.