GDP Headed to Permanent Contraction by 2023 – Here’s Why | First Rebuttal.
November 18, 2014—I’d like to carry on the theme from my recent article “Interest Rates Cannot Rise – Here’s Why” that garnered some discussion after being posted on Zerohedge. I’m going to show that GDP is also in a trap of decelerating growth although I will state that unlike interest rates the prognosis is treatable for GDP.
However, it will require the Fed to admit its failure and for the government to pull its Keynesian head out of its aristocratic ass. Specifically, the Fed needs to end its market manipulation and corporate tax rates need to come down significantly in addition to offering incentives for hiring and fixed capital investment here in the US.
Let me start by showing that GDP growth has been decelerating for as long as many of us have been alive. If you can remember back to your calculus classes you’d see deceleration of GDP growth as the second derivative of the GDP function. Let’s see what this looks like in practice on the following chart (the data was exported from St. Louis Fed’s Fred in order to show the trend line).
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