19 Replies to “The Elbow Shaped Economy”

  1. Not worried at all. A certain TDS-afflicted rodent will shortly be compelled to enter this thread and stridently explain to us all why this is not true and the rest of the world has it all wrong.

    1. Trump promised a much higher GDP for the USA on “DAY ONE”! … ohhhhhhhhhhhhh Mommmmmaaaaaaaa … just another one of Trump’s Lies! His MAGA base are abandoning him as they cannot tolerate a paltry +2.7% increase in GDP.

      It’s all so predictable.

      1. “You seem obsessed with me. That’s not healthy.”

        Not obsessed…just amused.

        (once again, someone rings the bell, and you come running. Pavlov’s dogs have nothing on you…)

  2. “GDP cannot distinguish value creation from value destruction. It counts the economic activity represented by the spending, whether that activity creates or destroys wealth.” – John Hunt

    While Canada has earned its last place standing from electing those that have imposed economic stasis, the top of the GDP growth shown above is now the greatest spender of the bankrupt welfare / warfare states with unending deficits to show for it.

  3. Starting from 2025, US GDP growth looks decent. But over the last year, almost every economic indicator is is either lacklustre or downright poor: GDP growth has slowed, inflation is high, job growth is non-existent, and the balance of trade has barely budged.

    https://tradingeconomics.com/united-states/gdp-growth-annual

    And the federal debt. Oh my gawd. It’s 123% of GDP. The deficit is 5.8% of GDP and won’t be coming down soon. 30-year treasury bond yields haven’t been this high since 2004, meaning institutions are demanding a large premium to carry the risk. And neither the president nor congress seem to give a crap.

    https://fred.stlouisfed.org/series/DGS30

    Raw power isn’t enough. The US has to be smart. Its fiscal, economic, and foreign policies are a catastrophe, throttling the economy and destroying international trust. And the US needs that trust, because it needs foreigners to invest in America and buy its debt.

    So sure, pop the corks. But the last few quarters tell a different story.

    1. Common money market rates … at virtually ZERO risk … hover around 4%
      The awful, terrible, no good 30year bond rates are at 5.22%

      Doncha believe rates for 30-year instruments should offer some significant incentive for investment? The MARKET sets the rate … not the government.

      Now ask yourself how the FEDS systematic strangulation of the economy through artificially restrictive monetary policy and interest rates impacts 30 year T Bonds?

      Your TDS is so utterly pervasive that you blame him for things beyond his control.

      1. This is not beyond Trump’s control. The markets are reacting to Trump’s and congress’s inaction on the ballooning debt, and to Trump’s economic policies. Canada’s 30 year bond yield, by comparison, is 4.1%.

        And the term TDS just means you can’t bear to listen to criticism of Trump’s policies.

        1. So … please elucidate …
          Why? Would anyone buy 30-year investments for a 4.1% return when you can get 5.2%?

          Ohhhhh yeahhhhh … MORONS who didn’t buy the FAKE Trump tariff Dip … are the same dipshits that would buy Canadian debt.

          1. Would anyone buy 30-year investments for a 4.1% return when you can get 5.2%?

            1. Many funds are required to buy only government bonds that have a top credit rating. Canada does. The US is in the second tier.
            2. Bond traders may be expecting the US dollar to fall in comparison to the Canadian dollar.
            3. The Canadian goverrnment is in better fiscal shape than the US government. Both its debt and deficit as a % of GDP are smaller (Canadian provinces are a different story). Most criticaly, Canada’s deficit is projected to fall, while the US deficit isn’t going anywhere for a while. This means that the odds of a default may be seen as less in Canada than in the US.
            4. A high yield is self sustaining, as it adds to the debt maintenance costs, which adds to the debt, which creastes a higher yield, which adds to the debt maintenance costs, and so on. This is called a debt spiral.
            5 The Canadian PM is a respected economist, while the US president has a brain full of squirrel monkeys.

          2. 5
            Heh.
            “respected economist”

            He may be respected, sure…
            But he’s an authoritarian who thinks government should drive the economic bus.
            Alto is the perfect example – it has zero value but its going to cost $100 billion and if completed, it will continue to be a negative asset for as long as it exists.

    1. “Still not using the ‘R’ word?”

      He can’t, because that would mean admitting he was wrong.

      (I do love the way he keeps walking back his previous positions, though..;)

  5. The broken window effect explains much of current ‘growth’.

    How much of current economic activity is repairing the damage caused by indiscriminate immigration?
    How much of this economic activity is just trading dollars?

    The real question is how much of this economic activity is actually creating anything of enduring value?

    We’re going down. down. down. We’re on a controlled flight into terrain with a suicidal aircrew, and it’s not accidental but the passengers don’t seem to notice..

    1. “We’re going down. down. down. We’re on a controlled flight into terrain with a suicidal aircrew, and it’s not accidental but the passengers don’t seem to notice..”

      Yup, that’s us alright.

      I’m told by some that it is the fault of the boomers who own homes, trying desperately to prevent any economic changes that would affect the value of their (unearned) millionaire status. Anything that could change Canada’s economy and create affordable housing is the very *last* thing they want, so they are deliberately trying to sabotage the country for their own selfish ends.

      (that, or they are all just really REALLY stupid and actually fell for Carney’s “Elbows Up” nonsense…)

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