I saw that Pikkety book displayed in front of a B&N the other day, is it worth a read? I'm afraid I've reached way past the end of my knowledge so I can hardly reply constructively to you, but this is a good way to put it, thanks for the clarification. And, just for the record regarding this How the hell would he know how much of the world's economy is held offshore if it's held offshore and nobody can see it -.-That's the argument here: GDP does not reflect the rules on the ground accurately enough to dictate policy when it comes to government spending. Whether an action is "intermediary" or not is irrelevant - economics is, again, a closed system and pointing out an externality does not invalidate the externality, in invalidates the model.
1) Between 10 and 20% of the world's economy is socked away where we can't see it in offshore accounts