GDP is a poor measurement of economic size. It was developed by Kuznets during the great statist monarchy of King FDR a man who tried to run America as leader for life [no term limits for the King!]. Nominal GDP includes government spending. Spending by the state is not a part of the real economy or Real GDP. It is a part of the statist-fantasy economy. The state can borrow a few trillion dollars from overseas lenders, erect statues, pyramids and memorials to itself or its chosen elitist representatives, and declare a net benefit to the 'economy'. This is rather absurd. The state in North America and Europe accounts for at least 40% of GDP. The goal is 100%. This 40% must be subtracted from the total GDP to arrive at a real economic size. When juxtaposed against real debts the glaringly obvious fact is that we are bankrupt – every single Western state is insolvent when you compare real debts to real GDP:
|
Country |
Nominal GDP at Purchase Power Parity [PPP] in Trillions USD |
Real GDP in Trillions |
Nominal Debts in Trillions |
Real Debts including off the balance sheet liabilities in Trillions
|
Real Debts as a % of Real GDP |
|
USA |
11.6 |
7 |
15 |
65 |
928% |
|
Canada |
1 |
0.6 |
1 |
4 |
666% |
|
UK |
1.8 |
1.1 |
9 |
53 |
442% |
|
France |
1.7 |
1 |
4.7 |
55 |
549% |
|
Germany |
2.3 |
1.4 |
4.7 |
|
418% |
|
Japan |
3.7 |
2.2 |
7.4 |
110 |
550% |
Source [see also CIA Factbook]
Never in history has any state survived when real debts are 200% or more of real GDP. [See Braudel's history of modern Europe for example.] We are at double, triple or quadruple that level right now with no end to the spending and debt madness in sight.
It is not just Greece and the 'periphery' of Europe which is a problem. The entire construct of Western National-Socialism and the nanny-state is the problem. Government is simply too large, and doing too many things poorly. All experiments in National-Socialism fail. China has spent about $8 Trillion in the past 10 years on infrastructure. Rotting ghost towns pockmark the nation. Its nominal GDP at PPP is about $7 Trillion. China has therefore consumed its entire economic size in debt in just 10 years. There is no indication that the spending frenzy in China will stop. States including China, simply implode when the carnivore called debt simply digests the real economy.
The Age of Aquarius has plundered future generations to erect a system rotted with fraud, corruption, double-dealing and oppressive fees and taxes. No one disputes the need to help people in need with education, health or welfare. What is also indisputable is that the current system is inefficient in achieving the state's objectives on social issues; but very efficient in parting people from their money – much of which is wasted and most of which has been pilfered from the unborn.