Can Truth Prevail in America? The Rise of Real GDP is an Illusion
NOVANEWS
By Dr. Paul Craig Roberts
According to official US economic data, the US Gross Domestic Product (GDP) has expanded for 22 quarters, raising real GDP 12.1% above its high prior to the 2008-09 economic contraction. Yet, US manufacturing output and US industrial production have not recovered to their pre-contraction high.
So what is driving the real GDP growth? In my opinion, the rise in real GDP is an illusion produced by the under-measurement of inflation.
As I have reported on many occasions, John Williams of shadowstats.com has concluded that changes in the way that the government approaches the measurement of inflation has, in effect, defined inflation away.
Formerly, if a price of an item in an inflation measure rose, the inflation rate would rise by the price ti...