Monday, August 04, 2014

Weak spots in the economy?

The NY Times now has a section they call "The Upshot". It's an attempt to use so-called big data to analyze issues. Today, they look at the economy and try to see the major causes of the current weakness. They go back over the last twenty years or so and examine how GDP broke down by sector. Then, they use the Congressional Budget Office’s estimate of what the United States’ potential output was in the second quarter of this year. Their conclusion as to "the major culprits in the nation’s economic malaise, each vastly undershooting what they would look like in our model of a healthy economy: residential investment; consumption of durable goods; state and local government spending; business investment in equipment; and federal government spending". These five areas contribute $845 billion in lost GDP, more than enough to make these boom times.

Interestingly, the government 'deficit' is over $300 billion. Infrastructure, anyone?

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