Friday, February 1, 2013

Paul Krugman Explains the Drop in Q4 Defense Spending

As I have already pointed out, there was a huge increase in government spending, especially military, in the third quarter of 2012, just in time to show a growing economy days before the election.

Here's how Paul Krugman explained the decline in Q4 that followed the curious Q3 spike;:
Most analysts are, rightly, shrugging off the surprise report of an actual decline in 4th quarter GDP. It will probably be revised away, and in any case it’s the result of one-off factors: a drop in inventories and a quirky sharp decline in defense spending.
It's a quirky sharp decline, Paulie, only because of the spending being stuffed into Q3.

1 comment:

  1. 'curious' Q3 = The Obama re-election quarter.

    Must pad the stats to guarantee a re-election. They will do the same in Germany this fall.