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Friday, May 23, 2014

Italy Puts The "I" in "PIGS"

If you are struggling to boost your GDP in a failing economy, when all else fails, pad the numbers! Evidently, Italy isn't the first country to use "creative accounting" when the GDP number is less than stellar. Sadly, it looks like the United States was the first to add random items to the balance sheet to make them add up to a better total.


According to Slate, back in April of last year, the United States decided to add "intangibles" to the GDP number which increased our economic output by 3% overnight.
 http://www.slate.com/articles/business/moneybox/2013/04/nipa_revisions_bea_will_treat_intangibles_as_capital_goods_and_boost_gdp.html
They added items such as books and movies to the GDP number. The only issue being that they had to estimate the value of these entities. Ca-Ching! I wonder if I need to apply for a loan, if I can add future raises, or future potential income to my salary too? I love this kind of math!


So what about Italy?  I agree with the article below from Zero Hedge.  Italy certainly takes the cake for style, by adding productivity from illegal entities.  I wonder if the USA will follow suit. Hey, at least prostitution, gambling, and now marijuana are legal in some parts of the country.  Desperate times call for desperate measures. Besides, its easier to cook the books than to actually grow an economy these days. Ciao!



http://mobile.bloomberg.com/news/2014-05-22/cocaine-sales-to-boost-italian-gdp-in-boon-for-budget.html

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