Does this prove that politicians, journalists and economists haven’t a fr****ng clue?

The media has been full of speculation about whether Britain will go into a double-dip recession or triple-dip recession. And it seems most politicians, journalists and economists all have an opinion that they’re overly keen to share with us in order to score points against their opponents (politicians), to earn their 80p a word (journalists) or to show how smart they are (economists). All these supposed “experts” use the level of GDP (Gross Domestic Product) to judge whether or not we are in recession. But hold on a minute. Why would you use GDP? It’s completely the wrong measure.

I admit I know about as much about economics as my hamster. Though that is an awful lot more than the (IMHO) worthless, lying, bullying waste of skin that is Ed Balls. But as far as I understand, GDP includes things like retail sales, government spending and private-sector activity such as construction, manufacturing and oil production. So let’s imagine a couple of situations

1. We all rush out tomorrow and buy some super fashionable clothes (actually cheap tat mostly made in China) at GAP or H&M. There will be asurge in retail sales and this will push up GDP. But what we’ve done is actually damaging Britain’s economy. It would have been better if we had used our money to pay down credit card and mortgage debts instead of buying Gap’s crap from China. So while GDP will show the economy is improving, we will in fact have weakened the economy.

2. Second scenario. The government decides to spend 3 billion of our taxes buying a worthless computer system from say Liam Byrne’s former employers – the thieving, tax-avoiding, multimillionares from Accenture. GDP would record this spending as a rise in activity. But in fact the government will just have wasted a few billion that could have been used to reduce the deficit rather than further enriching Accenture’s tax-avoiding partners.

Throughout the Brown Boom of 1997-2007 GDP went up and up and up and we ended up bankrupt. GDP went up because economic incompetents Brown, Balls and Miliband borrowed 400 billion, spent another 320 billion on PFI projects and wasted virtually all of this money. Yet GDP figures showed we were all rich and happy.

If the government cuts spending, that is good. Yet GDP figures would record this as a drop. If we save more and spend less on crap from China, that is good. Yet GDP would ecord this as a drop in economic activity. There is probably a good figure available which genuinely shows if we are in recession or not. But it is not GDP!

The fact that politicians, journalists and economists continually use GDP suggests they don’t understand it and haven’t a fr****ng clue what they are talking about.