Two months ago the US suddenly found itself "wealthier" by over $500 billion
in Gross Domestic Product as a result of a simple definition revision
that retroactively added trillions in cumulative gains from, wait for
it, intangibles. More importantly, as Paul Singer explained,
"As part of the revisions, the Bureau of Economic Analysis will change
the way pension payments are counting in GDP. Previous to the change,
when a company paid money into a pension plan, the money was counted as
wages in the GDP calculation. After the change, what companies
have promised to pay in the future, not what they are actually paying,
will be added to GDP. This is fantastic. The bigger the unpayable
promise made to unsuspecting retirees (promises that are not fully
funded), the more GDP supposedly goes up!" As it turns out, it was not just economic "output" that benefited from this definition change.
As today's release of the Fed's very much revised Flow of Funds report
confirmed, US households as of this moment are wealthier by over $3
trillion, just because the re-definition of the Pension Fund line item,
which is no longer counted as "Reserves" but the broader "Entitlements."
End result: whereas Americans last quarter had net worth of
$70.3 trillion, as a result of this revision, they now have $73.5
trillion. Revisionist Definition wealth for everyone!
Unfortunately, "wealth" attained as a result of definition changes can't be spent at places like Wal Mart,
more @http://www.zerohedge.com/news/2013-09-25/rejoice-america-you-are-now-3-trillion-wealthier-due-definition-change
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