Global GDP Rebound Is Underway, But Who's The Buyer?

08-05-2009 • Michael Shedlock / Mish

The reason why we remain skeptical over the sustainability — the operative word for investors — is because the U.S. economy (or the global economy for that matter) has yet to show any ability that it can stand on its own two feet without the constant use of government steroids. At a time when the U.S. government is running a 13% fiscal deficit-to-GDP ratio, it somehow has enough in the coffers to try and perpetuate a cycle of spending by inducing a populace in which 20% are already three-car families, to go out and buy a new car to support a shrinking industry at future taxpayer (or bondholder) expense. Look at what happened in that first quarter GDP number — total GDP contracted around $30 billion at an annual rate, but when you strip out all the government activity, ranging from spending, to tax reductions, to benefit payouts, the decline exceeded $300 billion. In other words, without all the government intervention, the decline in GDP in 1Q would have been closer to an 8% annual

1 Comments in Response to Global GDP Rebound Is Underway, But Who's The Buyer?

Comment by Lucky Red

Entered on: 8/5/2009 9:22:55 AM

Global GDP rebound...the 'recession' is over...we're spreading democracy in the Middle East...Jesus is coming...ROFL!

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Global GDP Rebound Is Underway, But Who's The Buyer?

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