PeakTrader.com

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http://www.economist.com/blogs/dailychart/2011/01/comparing_us_states_countries

2007:

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PeakTrader said...

Many people assume the U.S. economy was better over the 1995-00 asset bubble than over the 2002-07 asset bubble, because national income accounts, e.g. real GDP and real wages, grew at faster rates.

However, after the quick and massive Creative-Destruction process, mostly from 2000-02, the U.S. economy became much more efficient (in producing more output with fewer inputs); U.S. living standards improved at a steeper rate; U.S. gains-in-trade increased (while our trading partners gains-in-trade decreased); U.S. real assets were created or accumulated at faster rates, etc.

U.S. military spending as a percentage of GDP remained at relatively low historical levels, although the U.S. no longer had the "peace dividend." The total real marginal increases in U.S. military spending was only $100 billion to $200 billion a year (beyond maintaining a standing military). Yet, the budget deficit shrunk to $162 billion in 2007.

It's remarkable, the U.S. economy did so well in the structural bear market that began in 2000, and with rising commodity prices, including oil (which eventually resulted in the biggest oil shock in history). The 2001 recession was so mild, it wouldn't be considered a recession using annual per capita real GDP growth. Using that data, the U.S. had the longest economic expansion in history from 1991-07.

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VangelV said...

This is nonsense. The Fed acted to mitigate the damage of one bubble popping by blowing up another one. Profits were booked based on accounting fraud, not increased productivity and the economy moved even closer to the abyss than it had been.

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PeakTrader said...

VangelV, the aggregate data, along with all U.S. firms, outweigh a few frauds. I've cited one example of higher productivity before:

The U.S. created 17.6 million jobs between 1993-98, and created only 3.7 million jobs between 2001-06. However, U.S. real GDP growth was only slightly higher from 1993-98 than from 2001-06. So, the U.S. became much more productive in the 2000s.

I'm surprised you didn't mention debt, or the paper economy, which you've done many times before.

However, if you can borrow $100, and pay back only $95 in one year, or $90 in two years, then of course you'll borrow.

There's a big lie about the U.S. economy of the 2000s, which hasn't been defended, most likely because of ignorance and incompetence.