Try and Keep a Straight Face

The geniuses at the BBC love to put their outright stupidity on parade. They're now touting China as coming to save the day for the worldwide economy.

Try to keep a straight face as you read this:

China boom 'cushions world slump'

Global economic growth will slow in 2008 as the credit crunch hits the richest nations, the World Bank says.

But the "resilience" of developing countries will cushion the slowdown, with China still booming, it adds.

Overall, the Bank projects annual world economic growth to slow to 3.3% in 2008, compared with 3.6% in 2007.

Yet it warns that developing country growth, projected at 7.1% this year, could still be derailed by further financial turmoil or over-heating.

I could go on all day about the flaws in logic and grasp of economics in this article, but for the sake of brevity I'll go with the following.

1) Beware of economic data provided by Communist/totalitarian regimes. It tends to be inaccurate to say the least.

2) All we are talking about is a likely slowing of growth around the world. This is not exactly "Buddy can you spare a dime?" time yet.

3) China's economy is much smaller than the U.S. Their GDP is approximately $2.527 trillion or $7,800 per capita. The U.S GDP is $13.675 trillion or $43,444 per capita. This becomes relevant when you read this spin job later in the article.

It expects US growth to slow sharply to 1% in the first half of 2008, but recover quickly by 2009. Overall, the industrialised countries are expected to grow by 2.2% this year, down around 0.5% compared with the previous year.

In contrast, China is expected to grow by more than 10% over the next two years, with India not far behind.

OK, so even taking their numbers at face value, if the U.S. will grow by about 1% in 2008 and China by 5%, run the numbers and you realize that in real dollar terms the U.S. and the worldwide economy will still be better off from the U.S. growth.

China's GDP expanded by 5% is approximately $2.653 trillion or $8,190 per capita. The U.S. GDP expanded by only 1% is still $13.811 trillion or $43,878 per capita. It's like saying that a penny stock going up 5% on the day means more than a $200 stock going up 1%.

Nice to know that the BBC editors are still as dumb as always.