Denninger uses arithmetic to destroy Marco Rubio's liesSubmitted by newt on Sun, 12/09/2012 - 13:18
Rubio quote "We must get the national debt under control. Tax increases will not solve our $16 trillion debt. Only economic growth and a reform of entitlement programs will help control the debt."
Economic "growth" has not happened since the 1980s. You are a liar Marco, and since I assume you are intelligent this is not a mistake, it is a lie.
Since all money is debt-backed in our economic system it is trivially easy to determine the expansion of GDP over time removing out the expansion of debt. This one must do in order to obtain an accurate accounting of actual output.
So let's do that.
This is the graph of all forms of debt in the United States from 1980 to today. It is, of course, denominated in dollars. In 1980 GDP stood at $2.724 trillion. Today, it stands at $15.775 trillion, 579% of its 1980 value.
However, all forms of debt in the Z1 stood at $4.398 trillion in 1980, at the same time GDP stood at $2.724 trillion. That is, monetarily one unit of GDP was represented by 1.61 units of currency and credit.
In currency-invariant terms, therefore, our GDP was 0.619. We'll make this convenient and multiply these invariant terms by 1,000; ergo, our currency-invariant GDP was 619.
So what is it now?
Today, we have a GDP of $15.775 (from the latest preliminary estimate) but debt of $55.358 trillion. That is, monetarily one unit of GDP is now represented by 3.55 units of currency and credit.
In currency-invariant terms, therefore, our GDP is 0.281. For convenience we again multiply by 1,000; ergo, our currency-invariant GDP is at present 281.
619 is about 220% of 281, or, if you prefer, GDP in invariant terms is 45.4% of what it was in 1980!
There hasn't been any; what there has been instead is a scam promulgated by both political parties and you, Macro "I am a fraud" Rubio are one of the chief promoters. John Boehner is another, as are Mitch McConnell and Paul Ryan.
You can't evade the arithmetic sonny. It just is.