Is the U.S. in a depression? (How John Williams became America’s most important statistician)

Is the U.S. in a depression? (How John Williams became America’s most important statistician)

Written by Peter Diekmeyer, Sprott Money News

America’s economy has been progressing steadily. First quarter real GDP growth came in 2.2%. The official unemployment rate is 3.8%. Inflation, according to the Fed’s preferred measure is 2%.

But how accurate are those numbers?

“Nonsensical,” says John Williams, founder of Shadow Government Statistics, who has been tracking U.S. government data for more than three decades.

Williams reckons that, using traditional calculation methodologies, true inflation is likely running above 6% and the unemployment rate over 20%.

Most importantly, Williams’ calculations suggest that the US economy has been in a two decade-long depression. His line of reasoning is worth a look.

Underestimating inflation

Williams argues that U.S. statistical agencies overestimate GDP data by underestimating the inflation deflator they use in the calculation.

Manipulating the inflation rate, Williams argues in Public Comment on Inflation Measurement , also enables the US government to pay out pensioners less than they were promised, by fudging cost of living adjustments.

This manipulation has ironically taken place quite openly over decades, as successive Republican and Democratic administrations made “improvements” in the way they calculated the data.

These adjustments (such as hedonic adjustments to inflation calculations, or not counting people who have stopped looking for work as part of the labor force) inevitably cast the government’s numbers in a more favorable light.

However, mainstream media journalists tend to have a poor grasp of mathematics. They were thus unable to grasp the depth of the problem, let alone explain the issues to the public.

Politicians have thus been able to fudge economic data openly. For example, the chart below shows U.S. GDP growth as measured by official sources.

The following chart (produced by Williams) shows GDP growth as calculated using a GDP deflator, corrected for an approximately two percentage point understatement.

Using this adjusted measure, the U.S. economy is no bigger than it was two decades ago. Yet America’s population has shot up by 15% since then. This suggests the country has been in a major depression for some time.

Evaluating America like a third world economy

Williams’ findings, while controversial, corroborate a variety of other data points. Median wage gains have been stagnant for decades. The U.S. labour force participation rate remains at multi-decade lows. Even our own light-hearted Big Mac deflator suggests that the U.S. economy is in a depression.

Another clue is to evaluate the U.S. economy just as economists would a third world nation whose data they don’t trust. They do this by resorting to figures that are hard to fudge.

There, too, by a variety of measures—ranging from petroleum consumption to consumer goods production to the Cass Freight Index—the U.S. economy appears to have not grown much, if at all, since the turn of the millennium.

America’s socialism calculation problem

There is far more at stake regarding the quality of U.S. economic data than whether politicians look good or whether U.S. pensioners get their benefits.

The United States, where government spending now accounts for more than 60% of GDP , has gradually morphed into a socialist, state-directed economy .

Government now controls essentially all of the commanding heights.

Without correct data, the bureaucrats, academics and monetary policy functionaries who conduct U.S. central planning won’t know where to direct public funds. This in turn could create further misallocations that worsen or prolong the depression.

The man who asks the questions

Despite the mountain of evidence which supports Williams’ thesis, whether he is correct remains an open question. He’s had numerous critics over the years, though most have missed the mark or made small “gotcha” points that don’t affect his overall arugment.

The sharply-dressed statisticians at the U.S. Bureau of Labour Statistics, the Bureau of Economic Analysis and Statistics Canada for their part talk a good game. However, Williams is asking questions that none have been able to convincingly refute.

Until that happens, we’ll regard this rumpled, amiable, Californian … as America’s most important statistician. 

Is the U.S. in a depression? (How John Williams became America’s most important statistician)

Written by Peter Diekmeyer, Sprott Money News

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GoFuqYourself Sun, 06/10/2018 - 04:08 Permalink

Sure, all the stats are manipulated. Just like the supposed "lowest unemployment in 40 years" reported yesterday, with 90+ million out of the workforce.


When does the big unwind happen, that's the real question. How much further can that beat up can be kicked down the road?


I'm trying to figure out where the best place to be is, when the shitstorm starts.


South of the border, maybe.


Time to head to the southern hemisphere...., the northern hemisphere's outlook isn't looking so good.


How far do I need to go to get away from all the Monsanto gmo toxic food, the chemical spray toxic sky, the fracked toxic water, the Fukashima nuked Pacific...sigh....did I mention the Rothschild ministry of disinformation media? 


I fucked up by coming to this planet. I think I got off at the wrong stop.

Bigly JRobby Sun, 06/10/2018 - 21:48 Permalink

"Why don't you have a job?" <loser>

"The unemployment rate is under 4%....and that includes the uneducated morons...what's WRONG with you? Why can't you find a job?"


In addition, decent jobs are being replaced by shit jobs so that UNDEREMPLOYED number is so vital too. I have bern following his stats for over 15 years and I know his numbers are more correct.

You can FEEL they are...

In reply to by JRobby

JohnG cheech_wizard Sun, 06/10/2018 - 20:18 Permalink

" Without correct data, the bureaucrats, academics and monetary policy functionaries who conduct U.S. central planning won’t know where to direct public funds. "


IS THIS MEANT TO BE A JOKE?????  Sure sounds like a punchline to me.


Public funds go to the aims of the commies that infest North America, silly. 


Every body knows that.

In reply to by cheech_wizard

JohnG JohnG Sun, 06/10/2018 - 20:22 Permalink

" Without correct data, the bureaucrats, academics and monetary policy functionaries who conduct U.S. central planning won’t know where to direct public funds. This in turn could create further misallocations that worsen or prolong the depression. "


This is a feature of a pure fiat currency. 

This person seems to be under the impression that our "betters" give a damn about their serfs.

In reply to by JohnG

gdpetti U. Sinclair Sun, 06/10/2018 - 09:30 Permalink

All 'come' by choice... you really have to go 'esoteric' to understand the 'game' or nature of our existence here and now... find all the common data points in all religions/teachings et al ... and you will see the outline... that 'veiled' form that is the blueprint/information field/morphogenetic field that is behind it all.

To put it simply, as one itsy bitsy line from David R. Hawkins once put in a book.... 'we live in one level of Purgatory'.

To go deeper down the hole... all planets go through this process.... Earth was 'Eden' before the "Fall", but Purgatory after.. .we switched sides... Tree of Life.... from the 'good gods' to the 'bad gods'... and all their 'chosen people'. Purgatory isn't forced, isn't punishment, but rather a school in self conscious awareness... setup like an obstacle course .... everyone and everything participates in its own way.... at  its own level of consciousness.... which is why we are not all equal.... some are new here in school - PreAdamic, while the other half of humanity are more experienced - Adamic, but even then, most of them are still newbies, as it takes quite a number of lifetimes to develop enough chosen bias through experience to prepare oneself to actually choose sides in the Tree.... to stay or go... to use Plato's Cave analogy.... stay in the dark cave and join the dark side, the chosen people of 'Satan', or choose to leave... find the exit and learn to deal with the reality of existence in the full sunlight... all ancient Tarot images.. the major arcana are simply teaching tools for the esoteric.

This 'school' is set to end within the next decade.... thus all the 'climate change'... this is found in the archeological records... in the geologic records... of mass cataclysms... and even mass dieoffs/extinction level events.. as the 'dark star' or burnt out brown dwarf passes by... about as close as Pluto... affecting the Birkeland current flow (think EU theory).... which causes the sun to go 'quiet'... affecting our planet's EM field.... EQs, volcanoes, sinkholes et al.... 'climate change'... not global warming... though some areas are hotter as others are colder... overall, like our markets, we are at the bottom of the interglacial temp level and about to crash. Everything is reflected in this energy flow... 'out with the OWO, in with the NWO'... but will the old puppet masters of 'Satan' stay in power or will they lose control of the chaos they created? It is said that they've already lost.... by then, like our own individual lives, nothing is completely fixed or predetermined, just 'seen'.. like the end of a movie... we only see it frame by frame, day by day, but it's already 'over' by those able to see the entirety... BUT... the 'film' is a 'work-in-progress' and is always and forever subject to 'change'.... by our individual and collective choices.... as all is One... at our level, it's a question of how we choose to see this 'oneness'.... in darkness or in light... in lie or in truth.... to use the Tarot image.... in the moonlight here in purgatory, or in the sunlight of Truth, outside the cave, outside the 'veil' of lost connection to the whole of ourselves and all selves, all form.

To know thyself.... that is the meaning of life. You didn't get off at the wrong stop... you choose to be here... you just don't remember... if you did, the nature of being a student in this 'school' would be completely different.... if you know the answers to the test, what good is it? Purgatory is a priviledge, not punishment.. just another level or grade of the cosmic 'school' of all life, all existence, even 'karma' can be seen differently, as we learn the most from the pain in our lives, not the pleasures, and it is these pains, or obstacles in the course of life that is the reason for being here.... running this race is the challenge the spirit enjoys most.... it's that 'veil' that makes it 'fun'.

Enjoy it while it lasts, 'summer' is approaching soon and school will end this session.... as the cleanup crew arrive and 'graduation' proceeds... we 'grade' ourselves, which is why we are our own worst enemy and best friend..... the law of one.... best seen from the spirits side of things... when you leave, you only take your mind... your consciousness... and what you've learned from your experiences.

In reply to by U. Sinclair

GoFuqYourself gdpetti Sun, 06/10/2018 - 10:49 Permalink

Thanks for the reminder, and the pep talk.


 Sometimes I think I did choose this, but wonder if I overestimated my ability to help in the battle to defeat the overwhelming evil of this place. Then I think of the yin yang, and wonder about how extreme good can not exist without also extreme evil. They must be two equal sides.


So it really is quite a quandary, indeed. 

In reply to by gdpetti

any_mouse jin187 Sun, 06/10/2018 - 16:22 Permalink

If you are white then they may not let you in.

Australia is a Five Eyes nation.  Let that sink in.

"Canada down under."

Think you could easily escape the matrix?

Anti-GMO, Russia and India. Russia doesn't allow GMO. India is disputing the patents. Maybe they are stealing the tech via their H1B spy network. Curiously, the USN re-brands the Pacific Fleet as the Pac Indo Fleet. Meanwhile India is resisting global GMO corp.

That leaves Russia.

Syria has the last of two Arab heritage seed banks. Iraq had the other seed bank, until the USA invaded, because 9/11 and Freedoms.

"What are we fighting for?" Petrodollars and GMOs.

Though it is not just the USA fueling this current shit show. Destroy the USA golem and another golem will take its place. The parasites have many choices of hosts.

Go somewhere else and you are not a local and never will be. When the dollar is worthless and times get tough for the locals, who are you? One of them? Or someone from the evil USA? The nation that fucked them repeatedly. At the least,  you are still an outsider. A stranger. Not one of them.

Only white people in the Western world are forced by the State to accommodate people different from themselves.

And you will most likely be the one without a firearm.

In reply to by jin187

leeholsen12 GoFuqYourself Sun, 06/10/2018 - 10:57 Permalink

move to a small town in the upper Midwest, pay off your house and have some savings and you will be fine.

even if the dollar is no longer king or the govt goes broke, the usa will still go on day to day and those with no debts and a little money will be fine. the doomsayers think it's going to be the wild west countrywide when the shtf, idiots. maybe in the big cities but small towns typically have more common sense.

In reply to by GoFuqYourself

GoFuqYourself leeholsen12 Sun, 06/10/2018 - 11:17 Permalink

Agreed, but common sense isn't sufficient in a shitstorm. The world is getting tired of America bombing everyone, and you can't close your eyes and make it go away. This country is killing a LOT OF people, and karma can be a real bitch. The chickens will come home to roost, and that Includes your small town. How many soldiers did your small town send?

In reply to by leeholsen12

any_mouse GoFuqYourself Sun, 06/10/2018 - 16:29 Permalink

And if you, an American citizen by birth, happen to choose any one of the many places fucked by the USA since 1787, then what happens to you? It's a long enough list with just going back to 1947.

Burned in effigy or burned for real?

Right now, as a US citizen with petrodollars, you would be tolerated as they trade local resources for the USD.

USD goes to zero, and you want to consume local resources? Good luck.

You'll find out what it's like to be a dairy cow when the titty runs dry for the final time.

In reply to by GoFuqYourself

Vilfredo Pareto leeholsen12 Sun, 06/10/2018 - 11:58 Permalink

True.  In small towns and rural areas the great depression was mostly noted by the disappearance of white bread from daily fare, and the appearance of the turnip sandwich lol.


If you have your own fruit trees and know how to can and garden and build a root cellar and own your property free and clear just kick back and enjoy TEOTWAWKI, The Movie, The Destruction Of LA.


And The Sequel, Escape From Chicago

In reply to by leeholsen12

Automatic Choke jin187 Sun, 06/10/2018 - 16:57 Permalink

yup:   "if you aren't in debt, you don't understand".


however (the big however), you have to be good enough at your investments so that your after tax earnings on that cash you are holding instead of paying back exceeds the service on the debt.   cold hard self-inspection of your investment performance.   if you are marginal at this, go ahead and pay off debt -- that is a risk-free investment earning the service costs on the debt, and your life will be less stressful.


In reply to by jin187

Tarzan Usura Sun, 06/10/2018 - 13:21 Permalink

WHEN is the question most all of us ask.

It only took a few years, iirc 5 years, for the continental Dollar to be worth a penny, and collapse.

The current Dollar, started about 100 years ago, and likewise, is now worth about a penny.  So you would think the collapse is eminent.  How long can they stretch that last penny, WHEN will it collapse?

I had a environmental science professor in College who explained eternity using math as follows.  He took a piece of string, and a par of scissors and began cutting the string in half and discarding half each time, until he couldn't cut it with scissors any longer.  Then he asked the class, if we could create a devise capable of cutting this string exactly in half every time, no matter how small it got, how long could we cut that string in half?  The answer is for eternity.

This is the basics of how they've been able to sustain this shit show, and unfortunately, except for the idiots running the show, who will likely soon lose control, and send this world into a tail spin, they could split that last penny for a very very long time.

In reply to by Usura

any_mouse Tarzan Sun, 06/10/2018 - 16:44 Permalink

Like the Earth's crust, major cracks are appearing. Many small tremors. Around the globe.

The dollar is on it's way out around the globe.

If you were lending for a future payback, and you could choose any currency (incl. crypto), would you choose to lend USD to be repaid in the future with USD?

The FED's true, secret mission is almost complete.

Exsanguination of the Nation.

In reply to by Tarzan

s2man Sun, 06/10/2018 - 04:36 Permalink

Is this article about inflation or John Williams?  It just seems to be a big question instead of a conclusion. Kind of like that Kimbal Charting (sp?) guy, 'Is the the end?', 'Is this the begining?'.

Bladerunner44 s2man Sun, 06/10/2018 - 12:27 Permalink

I have followed Williams stats for a couple of decades and he is the reason why I have not been deluded by the govt tripe foisted upon the public as the facts. The BLS is just that without the "L" . Look there is only one band (The fed) playing music right now and there is no discernible beat. So we all dance fumbling around like drunken sailors. We have no choice but to dance to the music. You could just quit give up, but lead poisoning is a bitch. I am retired and my future income is dependent on the stock market, so I keep dancing trying to put one foot in front of the other hoping a cadence will reemerge and the chaos will subside. It's definitely a risk off environment, but as long as the GDP is moving sideways there's a chance the shit storm will pass. So just keep dancing.  

In reply to by s2man