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Above Trend GDP Growth For Ever - SSTF
The following graph looks at US GDP from 1930 to 2010. An amazing story. Look how steep our raw growth has been.
Now consider the following graph that includes the SS forecast for GDP over the next 75 years.
This is the same data as above. Notice that the red line is the
1930-2010 GDP. It now looks flatter than a pancake. That is what happens
when 5% growth forecasts are used. GDP will grow from ~$15T today to
528T. It will grow non-stop by 3,600%. At the end of the period it will
take only ten days to produce our current GDP. Now that is a success
story. And if you believe that, I have a bridge for you.
The Fund also forecasts “real” GDP. Here are their numbers:
Two observations. First note the “happy” comeback in GDP for 2011-14.
This is wishful thinking. It is also a critical assumption. When the
first few years of a 75-year analysis is “missed” it substantially
impacts the results all the way out to the 75th year.
The second is that the Fund is using a real growth rate for all of the
75 years that is greater than 2.1%. I have no idea if that is
reasonable. I found this on the topic from the CRS. This paper suggests
that a growth rate of GDP above 1.8% is not in our history. What does
.3% (^17%) mean over 75 years? Trillions.
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Economists are so, so dumb.
Any scientist would look at those super-exponential charts and shout "phase transition".
It is a requirement to either know math VERY well (all the better to manipulate the sheeple) of be completely ignorant (and hence be able to be convincing when you say/write incredibly stupid stuff mathematically) if you work for CONGRESS or the SS dept.
Hmmm, I've seen that chart before... but I can't quite... was it.... Oh! Friday afternoon's S&P!
Yep, trust me, Ben can do it.
Make it so.
Hyperflation, Hyperflation all the way including the destruction of our currency in the worlds market.
The whole thing is a ponzi anyway. There are no assets in the "Trust Fund" other than claims on the labor of those that will not ever make enough to confiscate.
The whole system is immoral theft. Collapse.
Best lecture presentation of growth I've seen in a while - has eight parts, but I think it is worth viewing.
http://www.youtube.com/watch?v=F-QA2rkpBSY
It underlines the fallacy of expecting neverending increases.
Paul Ryan or somebody should confront the administration with these charts. We need another Ross Perot(not to screw up election) but to whip out the simple charts and pointer on TV and talk turkey to Americans. We just don't have a clue thanks to the MSM brainwashing and sin of omission.
Just make sure American Idol is not opposite the show.
Seems like their projections consisted of "hey, lets just model this sucker based on the last 10 years of growth, and then go obtain some damn burritos", hence the long term projections of about 2.1%.
Note that the 20 year growth average is 2.6%, the 30 year is 2.7%, the 40 year is 2.8%, and the 50 year is 3.2%. Funny how it keeps decreasing as you shorten the timeline. Maybe there's something to that, eh?
Compare this to a chart of credit over the same period. I bet theyre identical.
And credit is collapsing , as will that growth.
They gotta use these fantasyland forecasts, otherwise they need to explain why the SSTF cash flows never turn positive again in their forecast - till 2018 anyway.
All steady logarithmic growth, no matter how small the percentage unit of growth, will "turn the corner" and go vertical at some point. Graphically, it's just a question of where you place the vertical axis.
Nice article Bruce. Your researching and writing skills are very commendable.
Hell, I'm just speechless. The stupidity levels are dangerously high.
Quit looking at CONgress, you furry rascal!
Sudden and Rocky!
We need your help here! Please join us in line at the ATMs on Thursday to pull out $500 (400 Euros). Sudden, we already have someone on our team who will kick this off for us in the Far East. Your help in getting people in Euro Land would help immensely.
Let's send a SIGNAL to .gov and banksters ruining the global economy! No mas!
Get there early, lines might be long.
Let's Deflate the bitchez!
I'll go ya one better. I'm going to shut down a Regions Bank account and move the money to Arkansas Federal S&L. The bastards at Regions don't have "free checking" any more. Eff 'em.
A good clean WOIII and a global pandemic is all it needs for a nice reset of the entire system.
Or all things will be fine if we bomb south America, China and the middle east back to the stone age.
The casualties will be missed, but it will all be for a good cause.
Been on all day!
528T by 2085? Heh, these guys are just poor loosers. Ben can pump it up to that level in 3-4 years, no problem. Just set a number and Ben will deliver. A trillion here, a trillion there ...
The problem for Ben is that despite the trillion plus he printed last year, the GDP in 2010 is still not going to be higher than it was in 2008.
In fact, in order to maintain GDP at the current level of $14 trillion, Ben needs to accelerate printing, he doubled the Fed's balance sheet in the last 15 months, he needs now to continue doubling it for a few more years:
so it goes
2010 $14 trillion of which $1 trillion freshly printed
2011 $14trillion of which $2 trillion freshly printed
2012 $14trillion of which $4 trillion freshly printed
2013 $14trillion of which $8 trillion freshly printed
Of course before then everybody with half a brain will have noticed that the real economy was actually shrinking, people will have lost confidence in Ben's printing press, and Ben will try to prove one last time that "one can always reverse a deflation by printing enough", so he'll print his last big salvo and the GDP will go, finally, through the moon, a trillion trillion dollars....
Another turn you head and cough moment for the rest of us.
+ 2 coughs! LOL.
Wow ... thanks for this perspective
With inflation, these numbers are conservative...
Don't SS payments grow at the CPI rate making inflation a moot point?
Who on God's green earth thinks that the CPI tracks the rate of inflation?!?!? Perhaps you can explain why hedonics was added an the elaborate system they use instead of just measuring the same items in the basket.
Yes, hyperinflation will reduce our unfunded liabilities to zero, as the new 1 trillion dollar bill is released
I already have my $100T bill - Of course it's a Zimbabwe $
With Bernanke on one side and Obama on the other, but its only use will be in candy machines.
I always hoped they would use a full color picture of Nixon giving hte peace sign for the trillion. Who wouldn't order of the trillion dollar value menu and pay with a fistful of Tricky Dicks?
Wake me up when GDP breaks $20T.
How can you sleep for 2 months?
He's got a serta exponential sleeper mattress.
Zis SS you speak of, who are they? Are zey Cherman? :p