#Economy & #Stocks Review Zero Decision-Making From Internet Analysis

E&S Review

Much of today’s economic data, time series officially collected and produced, are highly unreliable. Statisticians employ well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic to adjust economic outcomes as far back as the 1980s. Politicians and central bankers use these techniques for political gain.

Data massaged by statistical techniques (tricks) are revised when nobody is looking, or Administrations or public policies change.

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Zero Decision-Making From Internet Analysis

Probably worth mentioning if you reduce federal government spending by $2 trillion, you shrink the US economy by almost 10%.

Is there any reason to think this is a good idea?

This type of decline in the economy is at best a deep recession and at worst triggers a depression.…

— Richard Field (@tyillc) October 29, 2024

The X post isn’t entirely clear, but the logic would benefit from further elaboration for subscribers.

Federal spending through Q3 2024 totaled $1.893 trillion. With the U.S. GDP at $29.349 trillion, this means federal spending represents about 6.5% of GDP. A reduction of $2 trillion in federal spending is infeasible, as current spending has not even reached $1.9 trillion by Q3 2024. State and local government spending is a more significant factor in GDP than federal spending, with government consumption and investment accounting for 17.2% of GDP through Q3. See Chart for trends.

The largest contributor to GDP, however, is consumer spending, which drives the U.S. economy and reinforces the U.S. dollar’s role as the world’s reserve currency. U.S. consumption reached 67.9% of GDP in Q3.

Economic depressions arise from sharp declines in confidence, often triggered by major financial or military crises. When confidence collapses, funding for the dollar and consumer spending collapse simultaneously. The resulting crisis far outweighs any federal spending contribution. Social programs alone cannot navigate out of a downturn driven by confidence collapse.

We will talk about this more in a future Economy & Stocks Report update. Knowledge prevent a freeze in decision-making when it’s time to move.

Chart: Sub Components of GDP as % Total

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