So to put it another way, those parts of our economy that aren't productive are ,"... government administration and defence, health, education, and commercial and residential property services." !

In a nutshell, unemployment is likely to rise more swiftly and higher than maybe expected, and rather sooner than later...

Andrew J, that is very telling. The USA's productivity is increasing exactly as it should in a recession; ours is not. Incomes falling, are also an inherent part of a recession, which is a painful adjustment to past wrong patterns of investment and production and income.

I read the entire Karl Denninger post you linked to. He says exactly what I was already thinking. The non-measured sector, especially public employees, is inherently parasitical on the rest of the economy. Of course productivity in the private, measured sector will be dropping, as public employees salaries and perks and superannuation grow way out of proportion with the real world. The private sector has to pick up the tab for this, and compete with it for skills and knowledge as well.

There is the explanation to our problem, now what are we going to do about it?

Actually, I can tell you how it ends, and productivity is the least of the red herrings.

try this:

http://www.chrismartenson.com/martensonreport/end-money

AndrewJ is absolutely right - the public bailout of the private sector, globally, has been massive, has to happen again but bigger next time, and is unrepayable. In essence, (sorry Steven, I do harp on) we ran up against the exponential 'doubling' which we couldn't underwrite. The powers that be appear to be cranially bankrupt, and even if they were smart (and I think Merkel is a physics grad, so there's one there somewhere) there are no answers.

Productivity is a deckchair, and it's sliding with exponential rapidity, along with all the rest of them. Just remember, it's not 'too big to fail', but 'too big to survive in a finite arena'.

Given that they will keep printing money frantically, and that there is a finite amount of matter to purchase, money has to keep getting worth less. Their problem is that they have to pump exponentially more money in each round, even at near-zero rates.

Productivity? Anyone who reduces the amount of physical impact they induce, is doing us all a much bigger favour than any eager beaver.

But it's such a minor part of what is happening macro-ly, as to be pretty much irrelevant.

…and considering our fast increasing unemployment rate (7.3%), plus the fact that we import most everything, I’m mystified, why the government doesn’t take steps to support the Private Sector in order to expand and/ or develop new industries.

http://www.henderson.com/sites/henderson/sri/approach/topdowntheme/overv...

Another idea, which would save the country millions.

Walter

30% of Real Estate agents and other bureaucrats should be urgently moved and retrained to work in the Agriculture - and Health sector. Another 20% should be involved in quality manufacturing to cut imports.

Walter

W.Kunz, exactly, there is a whole industry of people doing a job that pretty much does itself, who actually buys a house based on what a real estate agent tells you? how hard is putting pictures of a house on the net and in flyers?
Why do we need whole armies of people doing this job?

Too many service sectors aimed at creaming off others in NZ.

..and why do not more bloggers comment on that ? Are you all Real Estate agents or sitting on a chair all day long- wow incredible!

..except the horses - all imported of course.