About 1.75 percent of the 3.3% GDP growth was Defense Department spending

[Sarah]

From The Seattle Times,
9/28/03:


http://seattletimes.nwsource.com/html/businesstechnology/2001749203_dunphy28.html





http://tinyurl.com/oy6f


<<some text deleted>>


One of the more interesting looks at the economy in recent weeks comes
from economists at Anderson School at UCLA.

Edward Leamer, the economist who prepared the report, looked at that
3.3 percent growth rate in the gross domestic product, revised upward
slightly on Friday from the earlier report of 3.1 percent annual
growth, and then took it apart, like tearing down an engine to see why
it is not producing enough power to reach a sustainable speed.

What he found will be no surprise to anyone trying to find a job these
days.

About 1.75 percent of the growth was from spending by the Defense
Department.

"That is a wildly large number," according to Leamer.

"The last time we had such a large number was during the Vietnam War."

That can't -- or shouldn't -- be sustained for long.

Does anyone want to go back to the Vietnam era of guns and butter?

Another "oddball feature" of the 3.3 percent is the 1.78 percent that
came from consumer durables, such things as cars and refrigerators.

That's a big number but not a sustainable one either, if the past is
any guide.

So let's do the math.

Take the 1.75 percent of military growth away.

The 1.78 percent growth rate in consumer durables is not realistic, so
let's subtract that.

Suddenly that 3.3 percent increase was really a 0.23 percent decline.

But let's add back a more reasonable rate of growth for consumer
durables of about 0.4 percent.

What are you left with? "Growth" of 0.17 percent.

Call it zero.

"We really had no sustainable growth in the second quarter," said
Leamer.

"It's not surprising that firms are reluctant to hire, is it?"

[ZenIsWhen]

Post by Sarah
From The Seattle Times,

http://seattletimes.nwsource.com/html/businesstechnology/2001749203_dunphy28
.html

Post by Sarah
http://tinyurl.com/oy6f
<<some text deleted>>
One of the more interesting looks at the economy in recent weeks comes
from economists at Anderson School at UCLA.
Edward Leamer, the economist who prepared the report, looked at that
3.3 percent growth rate in the gross domestic product, revised upward
slightly on Friday from the earlier report of 3.1 percent annual
growth, and then took it apart, like tearing down an engine to see why
it is not producing enough power to reach a sustainable speed.
What he found will be no surprise to anyone trying to find a job these
days.
About 1.75 percent of the growth was from spending by the Defense
Department.
"That is a wildly large number," according to Leamer.
"The last time we had such a large number was during the Vietnam War."
That can't -- or shouldn't -- be sustained for long.
Does anyone want to go back to the Vietnam era of guns and butter?
Another "oddball feature" of the 3.3 percent is the 1.78 percent that
came from consumer durables, such things as cars and refrigerators.
That's a big number but not a sustainable one either, if the past is
any guide.
So let's do the math.
Take the 1.75 percent of military growth away.
The 1.78 percent growth rate in consumer durables is not realistic, so
let's subtract that.
Suddenly that 3.3 percent increase was really a 0.23 percent decline.
But let's add back a more reasonable rate of growth for consumer
durables of about 0.4 percent.
What are you left with? "Growth" of 0.17 percent.
Call it zero.
"We really had no sustainable growth in the second quarter," said
Leamer.
"It's not surprising that firms are reluctant to hire, is it?"
--
"When our children fail competency tests the schools lose funding.
When our missiles fail tests, we increase funding." ---Dennis
Kucinich

Or ... when the kids fail....politicians come up with alternatives (like
vouchers)....
when missiles fail, they pour more money into making those same missiles
work.

It was shown, in the 50's, that a "flying wing"aircraft doesn't fly very
well.

Do we then stick with the idea of following nature, and designing planes
that, by design, fly better?
No. We create an un-natural flying wing ... and then add tons of computer
chips (aka tax dollars) to make it fly.
Total cost .. $1,000,000,000 per plane.