RT interviews PCR on the Bubble Economy and the Failure of Laissez Faire Capitalism
PCR section of the program starts at about 2:15 mark and runs to 12:50.
In explaining the difference between GNP and GDP, I misspeak when I say that GDP does not include our negative trade balance. What I meant to say is that GDP does not include
the negative consequences of our trade deficit. Those consequences are the trade surpluses that foreign countries have with the US. As these surpluses are invested in
US income earning assets, the result of US trade deficits is that the US ends up paying more to foreigners on their holdings of US assets than foreigners pay to the US on our
holding of their assets. The negative balance is deducted from GNP, but not from GDP.
After the crossover occurred, the US shifted from reporting GNP to reporting GDP, because GDP was larger.
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts' latest books are The Failure of Laissez Faire Capitalism and The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.