Expenditure

The obsession of having a continual increase in GDP may, unfortunately, do more harm than good.

The consideration is simple: There are more than one way to calculate GDP. (All of which should, in theory, give rise to the same value.) By the expenditure approach, GDP is the sum of private consumption, gross investment, government expenditure, and net amount of export.  When people spend less money, investment shrinks, and export is poor, there remains a seemingly secure way to boost up the GDP and do away with recession: The government comes out and spends more money.

Em… How could the government square the balance if tax income is not increased? Simple. Let’s borrow money from other people. (His name is Bond – Treasury Bond.)

Alas, in other words, by raising the debt, they call their future income domestic product – in the present tense. How ingenious.

PS. It is often argued that by increasing the government expenditure, one could start the ball rolling and increase private consumption and gross investment. The idea is nothing more or less than absurd - most of the money falls into the black hole of rich men's pocket.