I agree that deficit spending, as it has evolved, is like a Ponzi scheme. What does denninger mean though, by "real GDP". Usually that term is reserved for nominal GDP deflated by something like the consumer price index. Since there hasn't been much in inflation over the past three years where does the graph get its "-10%" shrinkage rate for real GDP? Is he making up his own private deflater? Doing so would be acceptable, if and only if he presents a rationale for his alternative calculation. Otherwise he is presenting a misleading graph.
I suspect that Denninger may be using something like the gold price as a deflater. While that argument may have merit, smuggling it in under the pretense of "real GDP" is disingenuous. On the other hand, if he were to make such a deflater explicit, he might be dismissed as a "gold bug". Well, too bad. The onus is on the hard money folks to deal with the prejudices of the great unwashed masses. Marxists don't get a free pass with their labor theory of value so why should hard money advocates be given an exemption from the prejudice of popular delusion? On 7/9/10, Steve Kurtz <[email protected]> wrote: > Mike G will be tempted to call this a Conservative rant. Ad hominem > doesn't refute his argument. > > Steve > > http://market-ticker.denninger.net/archives/2489-Krugmans-Insanity,-And-The-Hard-Mathematical-Truth.html > > _______________________________________________ > Futurework mailing list > [email protected] > https://lists.uwaterloo.ca/mailman/listinfo/futurework > -- Sandwichman _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
