Last week UKIP Daily reported that British GDP was set to rise, with Iain McKie writing that “In September 2014 George Osborne will pull a rabbit from the hat, and increase the UK’s GDP by 4%, thanks to new accounting procedures announced by the EU today.”
Well the good news is that this newfound bounty won’t be enjoyed only by the UK. This year Greece too will experience a miracle, as will all of the other EU countries! I can confidently assure anyone that this will definitely occur – as long as the eurozone holds together the miracle is assured!
Growth in Greece for 2014 is now forecast to be a whopping 3.6% – far outstripping the bubble growth of the US and UK. Even if Greece requires yet another bailout this year – which seems quite likely – all will be well.
I have yet to find the specific mechanics of this new methodology to see where the double accounting is done, but it seems that by merely adding defence expenditure (which is particularly high in Greece) they will count French GDP (the main suppliers of Greek weapons) as Greek – while still counting it as French – naturally.
As an example: say Greece buys a submarine from France. The French build the submarine and count it as French GDP in the export section, but because the Greeks have to pay for it they also count it in their GDP numbers. In reality it is, of course, a cost and, of course, a submarine depreciates in value, which this takes no account of.
It’s as if the UK were to count the costs of new nuclear power stations as additions to GDP. The work generated and done in the UK, paid as wages, is a legitimate addition to GDP, but to count the expenditure cost as an addition as well is double counting.
Next for statistical manipulation no doubt will be the eurozone unemployment calculation. They could do with some US methodology where despite the numbers in work falling between December 2012 and December 2013 ‘unemployment’ numbers fell. They simply cut people off and then don’t count them as ‘unemployed’ although they are not working (see US Labor Force Participation). The number of people actually working in the US is now back at the same level it was in 1978… yet ‘unemployment’ is only 6.7%. You’ve never had it so good!
As they say there lies, damn lies and statistics.