Bloom of Doom I: British Economy Creeps Out of Recession?
“The Office for National Statistics said Tuesday that gross domestic product in the three months to Dec. 31  increased 0.1% compared with the third quarter. Compared with a year earlier, GDP fell 3.2%. … For the whole of 2009, the economy contracted 4.8%—its biggest output fall on record.” (Emphasis CrisisMaven)
(See more statistical material in our References section!)
As I wrote earlier, this first part is a (dangerous) fallacy (with the latter probably understated): not only is a GDP growth of 0.1 percent within any conceivable margin of error, and probably promulgated only because a clear zero or below would not have allowed to call a premature end to the recession (something any government must want, to show its economic prowess), but also, and this is even more worrying, because GDP deliberately and inevitably contains public spending and any programmes that build bridges to nowhere or that, like “cash for clunkers” in the US, at the same time destroy half the value that they purport “to create”.
So, no, given the irrationally exuberant public spending and bloating of the money supply in the recent two years, GDP must have fallen in real terms in any case, even if unproductive spending is counted, and without it must have fallen probably another 5% year-on-year.
Since in the best of times “saturated” economies such as the UK rarely even manage to grow above 3% (and again, that figure may always have been overstated in recent years as explained due to the bloating of GDP by “hedonically” manipulated CPI “measures“), to make up for a 5% loss “from the top down” you need to grow about 5.5% “from the bottom up”, chances are, that from the time whenever the tide really begins to change (which may be years from now with further 5% drops, see the aftermath of 1929) it will take Britain (and the rest of the world for that matter, except for a few casualties along the way such as China and probably the USofA) double as long, probably ten to twenty years just to get to where Britain was at in, say, 2006!
When you think how Susan Boyle has done more to lift British spirits than a succession of governments and The Beatles and Abba, each less than half a dozen people, have added more value to their national economies than state intervention and even giant subsidised corporations!