That's not to say we don't have too much debt; but it's not only reason for growth, and probably not a significant one (my assertion based on these productivity numbers, I don't have a specific number of the % of GDP based on what you term "financial-jiggery").
Never let it be said that I'm unwilling to return to discussions with actual figures and facts.
US public debt figures in dollars and cents, from 1950 to 2005. - From the US Dept of the Treasury.
US GDP figures, in billions of dollars, from 1947 to 2006.
Now, what do we get from those? Let's just look at the past ten years, mainly because I had to reformat the data for this forum, and it was a tedious job, and going back to the 1980s gave even more depressing figures. Sorry for the formatting, but the forum doesn't do tables, as far as I know.
1995 GDP 7522.5 billion, Debt 4974 billion
1996 GDP 8000.4 billion, Debt 5224.8 billion
1997 GDP 8471.2 billion Debt 5413.1 billion
1998 GDP 8953.8 billion, Debt 5526.2 billion
1999 GDP 9519.5 billion, Debt 5656.3 billion
2000 GDP 9953.6 billion, Debt 5674.2 billion
2001 GDP 10226.3 billion, Debt 5807.5 billion
2002 GDP 10591.1 billion Debt 6228.2 billion
2003 GDP 11219.5 billion, Debt 6783.2 billion
2004 GDP 11970.3 billion Debt 7379.1 billion
2005 GDP 12573.5 billion, Debt 7932.7 billion
In the ten years, the GDP has increased by US$5,051 billion. Public debt has at the same time increased by US$2,959 billion. The debt, then, is 59% the GDP increase in absolute terms.
I would say that 59% is "significant." If a private individual were to increase their income from $7,522 annually to $12,574 annually, we'd congratulate them on their $5,051 increase. We'd be less impressed that their debt went from $4,974 to $7,933, a $2,959 increase. Would you call that "significant"?
Annual GDP growth from 1995 to 2005 averaged 5.3%. Debt grew at 4.8%. These figures are significant because obviously, if your debt is growing faster than your income, then eventually your debt payments will exceed your income. If a private citizen or company's debt payments exceed their income, we declare them bankrupt, and their future prospects are grim. Well, debt's only increasing at 91% the rate of GDP, so you're not bankrupt yet. However, if you have a few bad years in a row, you could be in trouble.
Of course, you may argue that the accumulating debt is not in fact fuelling GDP growth, so it's "not significant." You could argue that, but then the debt looks even worse. If it's not helping your economy grow, and the public's not receiving any more services than before, then where the fuck's it all going?
I note that you mentioned a productivity increase of 3.8%. By comparison, US debt increased by 7.50% from 2004-5, and the GDP by 5%. So productivity growth alone cannot explain the GDP growth.
Someone claims the American economy is crap because even if we have growth, it’s all a sham
A paid job is a paid job, and is not a sham. However, looking longer-term, you have to ask yourselves if it's sustainable. The debt can't go on forever. At some point, it's either paid off or written off. It does not seem reasonable to conclude that it could be paid off within the next generation. Writing it off would be an option, the USA built its nineteenth-century prosperity on written-off railway loans, and torn-up treaties with Amerindians, after all. But given that much of USA debt is foreign, and the USA depends so much on imports, the USA cannot really afford to lose creditworthiness. If, for example, the USA were to tear up all the Chinese-owned Treasury bonds, ridding themselves of about US$900 million of their debt, it seems reasonable to suppose that China might cut back on imports of US goods, and exports to them. Likewise, the 12 million barrels of oil a day the USA buys from outside its borders, countries might start asking for hard currency, rather than Treasury bonds. In the present time and world economic and diplomatic climate, debt writing-off would do the USA more harm than good. Of course, things may change in future. Some war might give the USA the excuse... Not that they'd start one with China, but if it did start, riiiip go the bonds. So much US money being in the hands of foreign countries cannot be entirely a good thing for the USA. It gives them rather a lot of influence over US policy. Were China to sell all its US Treasury bonds tomorrow - and they're all controlled by the government in Beijing, not by private citizens, so it can be done - US mortgage rates would rise a few percentage points, putting many people out of their homes. This must be of concern to the USA in the longer term, as well.
A job is like a home. Any one is better than none, but it's better if it rests on solid foundations, and won't disappear tomorrow.
The GDP is not based on financial jiggery or debt. It is P for Product for a reason, people. The GDP has no ties to the governments budget.
Unfortunately that is not so. "Product" is not all tangible products, nor even private services. GDP is simply the sum of all the money spent in the country. Whether it's $1 million from Exxon to Alaska to clean up an oil spill, $1 million for Bill Gates to rent out a Hawaiin island to get married out, $1 million of roleplaying books, or $1 million in food stamps, is irrelevant. It's all spending, and all adds to GDP. Federal government spending in the USA in 2007 will come from $1,890 billion in revenue, and $423 billion in debt, as noted by
the Whitehouse.
I do not think you can rationally argue that spending of US$2,316 billion, which is about 16% of US GDP, will have no effect on the GDP.
If you don't like how much of the world's product is going to the US, get your governement to stop exports to the US. Simple.
I'm more concerned about Australia's products going to Asia and the EU, where we sell underpriced nonrenewable resources. Exporting primary goods, from nonrenewable resources (iron, coal, and the way we grow is unrenewable, so grain, too), is a very colonial way to live, leads to a Third World economy. No thanks.
Certainly we could usefully disengage from the USA in many other areas, such as keeping them company on whatever war they've decided to lose this decade. Unfortunately, it's difficult to persuade our Prime Minister to remove his tongue from between the US President's buttocks. This situation appears regardless of who is PM, or President. It's simply the unimaginative course they've chosen, sadly.