"Yes, Virginia, two plus two can equal five. And since we're the U.S. Government, we can tell you that two plus two equals six."Caution: our Governmental system is now on full retard.
Today's GDP report was a complete Orwellian farce. The annualized number for Q2 was reported to be 1.7%. Of course, lost in the shuffle was the second massive downward revision for Q1 GDP, which was revised down again from 1.8% to 1.1% What that means is that on an inflation-adjusted basis the first quarter GDP was negative - i.e. the economy is in a recession.
However today the Government rolled out its massive "revision" in the overall GDP level going all the way back to 1929. In sparing you the ugly details, essentially the net affect of this was to raise the overall GDP level by $551 billion. How, you might ask? The Government went all the way back to 1929 and reclassified all the money spent on "intellectual property products" and reclassified them as "investments" rather than expenses as incurred. So, if you figure out a new way to remove the wrapper from a Hershey bar, the Government decided that 20% of the cost of that Hershey bar was an "investment" in making your life easier, so 20 cents of the dollar spent becomes an "investment" and added to the GDP. While that may seem like an absurd analogy, it really isn't. Here's the BEA's nice marketing flyer on this Orwellian change: LINK
Of today's 1.7% annualized GDP estimate, .15 is attributed to the new "intellectual property products" and .41 is attributed to inventory build. Why are businesses building inventory when consumer demand for everything except basic necessities is declining? If you strip out the unneeded inventory build and erase the intellectual property garbage, the GDP is 1.2%.
Recall that Q1 GDP was originally reported at 2.4%, revised the first time around to 1.8% and now has been taken down 1.1%. Expect the same thing to happen to today's farce of a number. As for the half-trillion dollars added to the overall level of GDP, there's only one reason this was conjured up: it makes the Debt to GDP ratio look not quite as bad. It goes from 105% of GDP to 101%. Brace yourself for a big increase to the debt limit ceiling...
Orwell is laughing his ass off and Atlas just shrugs.