Monday, 23 January 2012
The Worlds Second Biggest Economy
In the past, there have been claims in this blog to the effect that there are in essence three parts to an economy. There is the Taxable, the Alternative, which can take many forms, and the illegal.
It was suggested that the Illegal has been growing steadily and is much larger than we think and has a critical effect on both fiscal policy and government spending.
This notion occurred because in the past the way the UK economy worked and how people managed their budgets and spending was very different.
However, in Zero Hedge an article has appeared that makes my tentative ideas look far too conservative in their estimates.
These experts are saying that it is all far bigger than we think and with major consequences with some intriguing graphics:
So, is it possible that across the world the size of the illegal economies amount in total to the second biggest economy? It would not surprise me.
It is arguable that the bigger the levels of government spending the bigger the opportunities for malpractice, crime and corruption of all sorts. The current row over benefits is indicative of the various disconnects in this field.
Is tonight my night for mugging teenagers?