Looking at the numbers from current economic trends we see total GDP (as of last quarter i.e. June 11) in tune of 15 trillion USD and it can be broadly stated to be calculated from the following components
• • Personal Consumption expenditure (10.6 trillion)
• • Gross Private domestic investments(1.8 trillion)
• • Net exports of goods and services (-606 billion)
• • Government consumption expenditures and gross investment(3 trillion)
Now if we say there is a 5 % increase in GDP I assume it is ( 5% of 15 trillion) around 750 billion and will have to be reflected in one of the major components mentioned above .Logically thinking the easy way of achieving this number is to go after Personal consumption expenditure(approx 7.5 % increase) than the Gross private domestic (approx 42% increase). And hence sending money to the main street via all possible schemes (tax rebates , cash for clunkers, first time home buyers credit etc)
My question would be where are we going to see the 5% increase ? Has to be Spending , Spending ..
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