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Friday, March 23, 2012

GDP predicted .6% - GDP achieved .3%. Fail? Epic.

Weather and World Cup fail to lift GDP

The economy dawdled through the last three months of 2011, gross domestic product growing just 0.3 per cent - half the pace expected by most forecasters - despite the twin boost of good weather for farmers and the Rugby World Cup.

From 2008 Treasury claimed we would get 1.5% growth, 2.3% growth and then 3.2% growth. We actually got -1.1% growth, -.4% growth and -.1% growth. Treasury have been out by as much as 3.1% of GDP as little as last year. The reason Treasury keep getting it wrong is because the current free market meltdown is beyond their ideological paradigm.

Treasury are confronted by economic conditions created by the neoliberal deregulation they so slavishly worship, meaning Treasury doesn't have the intellectual capacity to look outside their free market paradigm.

What we are getting from Treasury is a mish mash of austerity cut backs resting on future growth predictions that make Hoover's constant claim of 'prosperity just around the corner' in the wake of the 1929 stock market collapse, look pessimistic.

Paul Krugman in the New York Times points out that Europe is hardly out of the woods yet...

We dumped the lessons of managed Keynesian capitalism for this neo-liberal monster. In the 70's the real economy and the financial economy were evenly valued, 40 years of neoliberal deregulation and the real economy is valued at $8 Trillion where as the Financial economy is valued at $300 Trillion - the utter imbalance built by ignoring development for Milton Friedman free market dogma has created not only an unjust system, it also has created acolytes within Government and the business media community whose blinkered attachment to failed free market theology makes them all part of the problem, not part of the solution.

Why we should listen to Treasury on increasing class sizes when they can't comprehend the economic future their free market fetish has unleashed should take a very short time to answer.



At 24/3/12 10:21 am, Blogger Nitrium said...

Time for an Orwell 1984 quote:
"For example, the Ministry of Plenty's forecast had estimated the output of boots for the quarter at one-hundred-and-forty-five million pairs. The actual output was given as sixty-two millions. Winston, however, in rewriting the forecast, marked the figure down to fifty-seven millions, so as to allow for the usual claim that the quota had been overfulfilled. In any case, sixty-two millions was no nearer the truth than fifty-seven millions, or than one-hundred-and-forty-five millions. Very likely no boots had been produced at all. Likelier still, nobody knew how many had been produced, much less cared. All one knew was that every quarter astronomical numbers of boots were produced on paper, while perhaps half the population of Oceania went barefoot. And so it was with every class of recorded fact, great or small. Everything faded away into a shadow-world in which, finally, even the date of the year had become uncertain."


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