Previously we have commented that when all it takes for a country to “hit” its GDP target, is to adjust said definition by adding the benefit of estimated ancillary items as prostitution and drugs, GDP loses all relevancy and meaning in its transformation to an arbitrary, goalseeked policy measurement and validation tool straight out of China’s Department of Truth. After all how else would the Spanish political kleptocracy boast the “favorable” impact of its disastrous policies if it wasn’t for a slew of recent definitional revisions. And yet, all throughout our commentary we were doing so tongue-in-cheek: after all, it is taboo for the very serious economists to discuss the hilarious systemic failures that allow their most prized indicator of “growth” to become a mockery of fringe tinfoil blogs.
At least, it was taboo until now, because moments ago, in an example of “very serious phrasing”, none other than the bank that does god’s work on earth (especially when it means providing off balance sheet financing for the bank of the Holy Spirit), just reported that the reason why China will hit its growth target is because of, drumroll, its fudged GDP. Only Goldman is far more serious when it says all of this, with the result being just too hilarious for words: to wit: “In the coming months, China’s National Bureau of Statistics is to make adjustments to the methodology used to calculate GDP. These adjustments are likely to boost real GDP growth by 0.1-0.2pp, thereby making it easier for the government to reach its goal of ‘around 7.5%’ GDP growth in 2014.“
But wait there’s more, because the biggest adjusted “contributor” to China’s economy will be the retroactive benefit from R&D that previously was treated as a cost rather than an “investment.” Yup:research and development, which in China has a different name: Piracy and Reverse Engineering, only R&D is sexier than P&RE.
Which brings us to the question of the day: have we finally gone full econotard? Or is changing the rules to hit your target, while fabricating the dumbest possible adjustments, now considered very serious economic policy?
Full note from Goldman Sachs, whose humor value is far higher than the author intended:
This post was published at Zero Hedge on 09/02/2014.