Yesterday I finished reading an article by an economist wherein he stated that the consumer represents 70% of the nation's economy, that without the consumer spending again the recovery will never happen.
Normally when one hears this bromide repeated again and again one comes to believe it is the truth.
I am a little odd, I guess, because I ask myself what makes the other 30% and why don't they do more?
So I visited the internet in search of what constitutes percentages of the economy or the Gross Domestic Product (GDP).
There are three important sides to the GDP figure. They are:
household which is called consumption
government which is called public expenditure
business expenditure which is called investment
Sure enough, as of September 2009, the consumer represents 71% of the GDP. (Here, I digress, because this is what I don't understand. If the recovery isn't happening, why are consumers spending at a higher rate than last year? Because everyone agrees that is what the figures show.)
To continue, the consumer represents 71%, government spending (or public expenditure) represents 41%, and Investment represents 15%. Call me stupid, but don't those percentages add up to 127%?
There is something wrong somewhere. This economy is sick and getting sicker and I don't read or hear anyone who seems to know what will happen next, or what to do about it.
And they call Economics a science? And they give Nobel prizes for it? Puh-leeze!