Wednesday, February 2, 2011

GDP Exponential Trend FAIL

The following chart shows the real growth of our GDP. I have included a long-term exponential trend line in red. We fell off of it. In my opinion there is no going back.



The following chart shows the amount we are above or below that exponential red trend line.



See that missing $3 trillion? That's per year. Other than Jeremy Siegel, how can anyone possibly think we'll be getting that back?

This last chart shows the amount we are above or below that exponential trend line expressed as a percentage. I have included a 10-year moving average. We've been sliding into lower real GDP growth rates for decades.




Update:

Here's a bonus reason to be concerned.

U.S. Census Bureau: Population Profile of the United States

The decrease in the rate of growth is predominantly due to the aging of the population and, consequently, a dramatic increase in the number of deaths. From 2030 to 2050, the United States would grow more slowly than ever before in its history.

Source Data:
BEA: National Economic Accounts

10 comments:

Mr Slippery said...

You are being tricksy by using chained dollars. You are supposed to nod your held and drool when the CNBC honeys they tell you all is good with [nominal] GDP and the DOW is over 12,000.

Exponential functions and reality don't work together for long. This little thing called physics gets in the way.

Stagflationary Mark said...

Mr Slippery,

Physics would crush economics in a battle to the death! ;)

getyourselfconnected said...

Voodoo can crush economics as a science, but then there is always voodoo economics!

mab said...

My money is on deja voodoo eCONomics (recuring bubbles, extractive finance and endless financial fraud).

CONgress will, of course, will play a vital role.

In the new (e)CONomy, it's all about transfering wealth from the producers to the debt producers.

Stagflationary Mark said...

If we were smart, we'd start a new university that offered a master's degree in deja voodoo eCONomics.

Double your wealth transferal skills or no money back!

How Much Will an MBA Raise My Salary?

Many MBAs even find themselves in high demand after graduation with two or more job offers that give them leverage to command a higher salary.

If there is one thing this economy needs, it is more leverage.

How many MBA graduates are there in the US each year?

According to the National Center for Education Statistics (NCES), about 156,250 MBA degrees are granted each year in the US. MBA students represent about 25% of all Master’s graduates.

How do we get by with so few?

watchtower said...

Not to worry, all is well.

'Wall Street Pay Hits New Record'

http://tinyurl.com/4kqd38u

watchtower said...

Mark

After looking at your charts I was reminded of a post I came across awhile back.

The author is...well...a little bit out there maybe, but he did get me to wondering if he might have something.

Is there any way I could get you to check his post out and then give me your thoughts?

http://tinyurl.com/4a8qwwo

Stagflationary Mark said...

watchtower,

From your link:

The average Wall Streeter is now paid $141,000 -- up 3 percent from last year. And the heavy hitters seem to be doing very well indeed. For example, Bank of America CEO Brian Moynihan saw a 67 percent rise in his total compensation last year. "Things are shifting back to where they were before," one expert on compensation told the Journal.

One wonders what the median Wall Streeter makes.

Perhaps he's a Wall Street janitor who saw a pay cut. Perhaps Bank of America CEO Brian Moynihan's extra compensation crowded him out. Sigh.

Just kidding Brian! I'm sure you are worth every penny of financial shenanigans you bring to the table!

Jazzbumpa said...

The decrease in the rate of growth is predominantly due to the aging of the population and, consequently, a dramatic increase in the number of deaths. From 2030 to 2050, the United States would grow more slowly than ever before in its history.

But just think about how that will boost GDP/Cap - finally undoing the Eisenhower admin's lag at the opposite end of our boomer lifetimes.

Cheers! (more or less)
JzB

Stagflationary Mark said...

Jazzbumpa,

But just think about how that will boost GDP/Cap...

Behold the power of intended consequences. Sigh.