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View Diary: How to hide a recession (246 comments)

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  •  phantom GDP (8+ / 0-)

    In a Business Week article, The Real Cost of Offshoring proved how our GDP is overinflated because it counts overseas productivity as domestic.

    It's about 2% delta increase overstatement.

    But the new numbers also require a reassessment of productivity and wages that could add fire to the national debate over the true performance of the economy in President Bush's second term. The official statistics show that productivity, or output per hour, grew at a 1.8% rate over the past three years. But taking the phantom GDP effect into account, the actual rate of productivity growth might be closer to 1.6%--about what it was in the 1980s

    This is very significant for this is actually an issue among economists, more than 1 tried to hide the negative effects of offshore outsourcing on US domestic economy and finally the facts become mainstream.

    Hats off to Susan N. Houseman, the economist who finally did the definitive research.

    by BobOak on Sat Nov 03, 2007 at 01:34:06 PM PDT

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