The Latest Contribution To US GDP: Promises... No Really

Tyler Durden's picture


Sadly, we are not making this up: as part of the BEA's latest revision to the way it calculates GDP, the government will no longer count the amount of pension funding that is actually allocated to retirement accounts (counted as wages in the GDP calculation): i.e., an actual cash outlay. Instead, what the Bureau of Economic Analysis will count are corporate promises of how much companies will (may? might?) pay... eventually. The bigger the lie and the promise, the higher the GDP. And presto.

Elliott Management's Paul Singer explains this pathetic adjustment as follows:

We have commented in the past on government statistical fakery and fudges, in the inflation numbers, in employment and long-term budgeting. But recent changes to the national GDP accounts by the Bureau of Economic Analysis may “take the cake.” As part of the revisions, they change the way pension payments are counting in GDP. Previous to the change, when a company paid money into a pension plan, the money was counted as wages in the GDP calculation. After the change, what companies have promised to pay in the future, not what they are actually paying, will be added to GDP. This is fantastic. The bigger the unpayable promise made to unsuspecting retirees (promises that are not fully funded), the more GDP supposedly goes up!

Said otherwise, if US companies promise "infinity", GDP will grow by a comparable amount. At least in a thought experiment... Right?

. . .

What else is there to say?

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Mon, 05/06/2013 - 14:54 | 3534956 Lost Wages
Lost Wages's picture

I guess it's finally time to buy stocks, because even though upcoming GDP numbers will be even more fake than usual, the Momo twirps of the world will still buy up the stock market based on the awesome new numbers.

Mon, 05/06/2013 - 15:02 | 3534986 Pladizow
Pladizow's picture

What would a cornered rat not do?

Resistance is futile!

Mon, 05/06/2013 - 15:09 | 3535012 hedgeless_horseman
hedgeless_horseman's picture



The FASB now allows banks to just make up asset values, so why can't regular businesses just make up payrolls?


Mon, 05/06/2013 - 15:12 | 3535032 flacon
flacon's picture

Holy shit. This is getting fucking rediculous. But that's because the status-quo is fucking rediculous. When oh when do we get to see reality?! My brain hurts! Zimbabwe here we come! Prosperity for all! Billionaires for all! Fuck shit fuck!


You know, there was a former Soviet defector who siad that the government of the USSR claimed that eventually the ocean would turn to lemonade. Fucking shit-loads of investors believed it. I went to the ocean the other day and it was just salt.

Mon, 05/06/2013 - 15:12 | 3535043 XitSam
XitSam's picture

"So how did you become a trillionaire?"

"Gradually, then all at once."

Mon, 05/06/2013 - 15:13 | 3535046 flacon
flacon's picture

Very nice!

Mon, 05/06/2013 - 15:20 | 3535070 xtop23
xtop23's picture

+1 funny.

Love the Picard pic.

"Number 1, shields up! Brace for maximum stupidity!"

Mon, 05/06/2013 - 15:24 | 3535090 Manthong
Manthong's picture

Full Faith and Credit..

It’s a good thing.

Mon, 05/06/2013 - 15:56 | 3535209 Element
Element's picture

Well, we now know for sure where all those Arthur Andersen accountants ended up working.

Mon, 05/06/2013 - 16:18 | 3535283 Popo
Popo's picture

I have a one man LLC  (I work for myself).   


I have just promised myself a 1 trillion dollar retirement package.


Who should I contact at the Federal level to let them know about America's now higher GDP?

Mon, 05/06/2013 - 16:26 | 3535303 redpill
redpill's picture

First tell them your pension program needs a $1T bailout, they may pay you on the spot.

Mon, 05/06/2013 - 16:45 | 3535352 Joe Davola
Joe Davola's picture

When the gov prints the dollars to fund the PBGC takeover of these pension plans, will that count as monetary inflation?  Or will it be categorized with the $85bil/month as just the cost of getting re-elected.

Mon, 05/06/2013 - 19:09 | 3535816 Pegasus Muse
Pegasus Muse's picture

What else is there to say?  

"Economics is fraudquackery practiced by paid shills, charlatans, unabashed con men, and Bankster Mafia wannabes.” –Lee Adler

Mon, 05/06/2013 - 20:02 | 3535939 El Viejo
El Viejo's picture

Some people pay to visit La La Land others live there permanently.

Tue, 05/07/2013 - 04:08 | 3536773 resurger
resurger's picture

discount all promises to PV and add it to the GDP! This is the biggest fraudlent shit i have read today 

Mon, 05/06/2013 - 20:09 | 3535969 Whoa Dammit
Whoa Dammit's picture

As an encore, the BEA will have its Jerry's Kids employees don ruby slippers and chant a stunning rendition of " There's no GDP like Homey's GDP" whilst clicking their heels together 3 times. If that doesn't get the economy going nothing will. /s  

Mon, 05/06/2013 - 16:54 | 3535389 Go Tribe
Go Tribe's picture

Yes, and thank you for saving America!

Mon, 05/06/2013 - 18:39 | 3535722 Homernomics
Homernomics's picture

Don't forget to contact the IRS with that news.

Mon, 05/06/2013 - 15:20 | 3535066 McMolotov
McMolotov's picture

These are the dying days of our banana republic. In the near future, Obama will probably start wearing some blingy, fake military uniform.

Mon, 05/06/2013 - 15:30 | 3535114 t0mmyBerg
t0mmyBerg's picture

Now that is funny.  I cannot wait to see that in this world.  For those who have already awakened from the matrix however, he already does.

Mon, 05/06/2013 - 15:51 | 3535192 Shell Game
Shell Game's picture

LOL!  +1984

Mon, 05/06/2013 - 16:32 | 3535321 XitSam
XitSam's picture

Like this one?

Mon, 05/06/2013 - 17:50 | 3535577 12ToothAssassin
Mon, 05/06/2013 - 18:09 | 3535624 IrritableBowels
IrritableBowels's picture

Paging WB7...

Mon, 05/06/2013 - 15:10 | 3535037 IridiumRebel
IridiumRebel's picture

Every time a unicorn shits skittles, a banker gets its wings!

Mon, 05/06/2013 - 16:33 | 3535325 XitSam
XitSam's picture

Every time a unicorn shits skittles, a banker gets bat wings!

Jamie and Lloyd have multiple wing pairs.

Mon, 05/06/2013 - 15:11 | 3535038 Bastiat
Bastiat's picture

It would be better if the unicorns were on ice.

Mon, 05/06/2013 - 15:22 | 3535076 xtop23
xtop23's picture

Or on your bbq. Certainly going to be cheaper than beef at this rate. Nt'l avg. $5.49 a/lb thus far. 

Mon, 05/06/2013 - 16:55 | 3535397 Go Tribe
Go Tribe's picture

It's crazy not to buy quarters or halves these days, Who can afford supermarket prices?

Mon, 05/06/2013 - 15:32 | 3535127 Groundhog Day
Groundhog Day's picture


Do you know of a FASB rule which makes all my income turn into debt so i don't have to pay any taxes, or should i look for rumplestilsken (since we are in the lala land of star trek and unicorns)

Mon, 05/06/2013 - 17:08 | 3535446 Anonymouse
Anonymouse's picture

Magic always comes at a price, dearie.

Mon, 05/06/2013 - 15:40 | 3535161 Headbanger
Headbanger's picture

When does unicorn hunting season begin??  I just zeroed my scope on a new Ruger American Rifle 7mm-08

Mon, 05/06/2013 - 17:59 | 3535598 KickIce
KickIce's picture

As individuals, we should all do our patriotic duty and incorpotate and promise to pay ourselves x million and thus adding to GDP.  While I'm at it I'm going to revalue my 2001 truck to say 100k and take out a loan against it.

Mon, 05/06/2013 - 18:14 | 3535640 Stoploss
Stoploss's picture

So this is how they will show positive GDP in the face of a collapsing labor force..


No job's required to show productivity................

Mon, 05/06/2013 - 15:36 | 3535144 Long_Xau
Long_Xau's picture

Well then they get what they want. They don't care who the fool that buys is and how he rationalizes it.

Time to stop betting on other people's stupidity. The best you can achieve would be to become the king of stupid.

Mon, 05/06/2013 - 15:51 | 3535193 Martin Silenus
Martin Silenus's picture

Assimilation, bitchez!

Mon, 05/06/2013 - 14:54 | 3534957 max2205
max2205's picture


Mon, 05/06/2013 - 15:00 | 3534985 Groundhog Day
Groundhog Day's picture

What else is their to say?

"beam me up scotty, there's no intelligent life down here"

Mon, 05/06/2013 - 17:51 | 3535581 12ToothAssassin
12ToothAssassin's picture

Scotty never beamed anyone up or down.

Mon, 05/06/2013 - 15:49 | 3535190 JustObserving
JustObserving's picture

Can we add the $123.8 trillion in US unfunded liabilities for Medicare and Social Security (promises) to the US GDP then?

Mon, 05/06/2013 - 19:47 | 3535899 NoDebt
NoDebt's picture

Yes, apparently.  This is bat-shit nuts.  I suspect the timing of this is due to the fact they know we're headed for another leg down in the economy (so as never to officially acknowlege another recession again- as I have speculated would be the case for a long time now).

I realize two things:  1. When this thing blows, it's gonna blow big.  2. It's going to take YEARS for it to happen.  There will be millions starving in the streets and roving gangs driving around the suburbs in Mad Max cars before anyone acknowleges things may not be going quite as well as the numbers would indicate.

Mon, 05/06/2013 - 15:00 | 3534967 yogibear
yogibear's picture

It doesn't matter anymore. It's anything to produce the next rally.

Increasing the GDP allows more debt. Won't have a negative GDP and look like a recession.

In the time the trading houses need to step up the ante and go order prostitutes for the SEC from the porn their viewing. A gift for all that illegal trading and activity the SEC let pass. 

Mon, 05/06/2013 - 15:02 | 3534996 Snoopy the Economist
Snoopy the Economist's picture

Try depression - not recession.

Mon, 05/06/2013 - 14:58 | 3534973 flexforthecamera
flexforthecamera's picture

gdp soap opera

Mon, 05/06/2013 - 15:01 | 3534984 fonzannoon
fonzannoon's picture

so flash forward. 2 years from now the true Unemployment rate is 20% but the reported one is 6.7% because of dropoffs etc. actual gdp is -5% but reported gdp is 2.5% because of promises. the market is still breaking new highs....are we still going to be talking about "when tshtf"?

Mon, 05/06/2013 - 15:04 | 3535004 Snoopy the Economist
Snoopy the Economist's picture

UE is already ~ 23%. It's only going up from here.

Mon, 05/06/2013 - 15:05 | 3535014 fonzannoon
fonzannoon's picture

at what point has the shit splattered all over the fan?

Mon, 05/06/2013 - 15:27 | 3535100 McMolotov
McMolotov's picture

I kind of think the shit has already hit the fan, but TPTB have been working overtime with the Febreze. It's getting whacky, like something bad happened behind the scenes, and they don't know how to react so they're just winging it.

We've reached the perfume on a turd stage.

Mon, 05/06/2013 - 15:30 | 3535110 fonzannoon
fonzannoon's picture

It's 300 million little fans getting hit one at a time.

Mon, 05/06/2013 - 19:20 | 3535836 Let The Wurlitz...
Let The Wurlitzer Play's picture

Hey McMolotov,

Did the feds raid your garage today ???


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