T Nation

Changes in GDP Measurement Create Growth Out of Thin Air

http://dailycaller.com/2013/04/30/changes-in-gdp-measurement-create-growth-out-of-thin-air/

The successful peddling of bad economics results from the ideological hegemony of raw capitalist ideology.

One of my new favorite quotes.

The interest on the debt is half of what it was during Reagan/Bush.

I think I have posted that a few years ago and it was ridiculed.

I am getting tired of people not acknowledging the obvious.

Let Rome burn.

To the ground.

[quote]orion wrote:
I think I have posted that a few years ago and it was ridiculed.

I am getting tired of people not acknowledging the obvious.

Let Rome burn.

To the ground.

[/quote]

It is getting worse by the day, and I can see where you are coming from. It is just a lot harder to just step back and enjoy the fire when you have a wife and two small children depending on you.

Things get unpredictable during fires.

JEATON, there are no doubts problems with government stats and I would encourage you to check out this site if you aren’t already familiar with it.

http://www.shadowstats.com/

That being said, I have always thought that GDP is a very dubious measure of economic growth.

The problem is in that GDP is simply a measure of the dollar value output of an economy ( the old D=C+I+G+NX) and fails to take into account the quality increases in goods.

A $200 phone from 10 years ago is treated as the same amount of “output” as a $200 phone from today( ignoring inflation for now), when obviously the $200 phone from today provides more value than the one from the past. The $200 figure only measure the phones value at the present time given the present set of consumption options, in this way the phone has a value of $200, but it most definitely does not have a $200 value across time.

This problem always seems to be brushed aside in economics courses, it’s recognized but not really given much thought… and this attitude I have never really understood.

When you consider the above problem you can see that GDP could stay flat ( or even fall) and still be accompanied by increases in the standard of living. The rapid advancement of technology has made this problem all the more relevant.

I bring all this up because I think that this is part of the reason, ostensibly, for the the adjustment.

Another good example - a $500 T.V today is much better than a $2,000 T.V from 15 years ago. Same thing applies to vehicles.

[quote]tmay11 wrote:
JEATON, there are no doubts problems with government stats and I would encourage you to check out this site if you aren’t already familiar with it.

http://www.shadowstats.com/

That being said, I have always thought that GDP is a very dubious measure of economic growth.

The problem is in that GDP is simply a measure of the dollar value output of an economy ( the old D=C+I+G+NX) and fails to take into account the quality increases in goods.

A $200 phone from 10 years ago is treated as the same amount of “output” as a $200 phone from today( ignoring inflation for now), when obviously the $200 phone from today provides more value than the one from the past. The $200 figure only measure the phones value at the present time given the present set of consumption options, in this way the phone has a value of $200, but it most definitely does not have a $200 value across time.

This problem always seems to be brushed aside in economics courses, it’s recognized but not really given much thought… and this attitude I have never really understood.

When you consider the above problem you can see that GDP could stay flat ( or even fall) and still be accompanied by increases in the standard of living. The rapid advancement of technology has made this problem all the more relevant.

I bring all this up because I think that this is part of the reason, ostensibly, for the the adjustment.

Another good example - a $500 T.V today is much better than a $2,000 T.V from 15 years ago. Same thing applies to vehicles.

[/quote]

Good points all.
But here is where my problem lies…quality increases are not something that have appeared just during this administration. Past administrations have dealt with the same issues and either were praised or pummeled for the outcomes.

It just appears more of the same from this administration. If your policy fails, redefine the outcome.

Two small kids…man oh man, who on Earth would even consider having kids in a collapsing economy?
Why can’t we just put a moratorium on births until the economy in the U.S. improves dramatically?
Judging from Jeaton’s relaying of the always flowery and sunny current events, that doesn’t
look that’s gonna happen for another generation…Unless there’s a “shiny happy people” type that relays
good shit here other than the afterlife.

When you can no longer lie about the facts, change the equation.

[quote]JEATON wrote:

[quote]tmay11 wrote:
JEATON, there are no doubts problems with government stats and I would encourage you to check out this site if you aren’t already familiar with it.

http://www.shadowstats.com/

That being said, I have always thought that GDP is a very dubious measure of economic growth.

The problem is in that GDP is simply a measure of the dollar value output of an economy ( the old D=C+I+G+NX) and fails to take into account the quality increases in goods.

A $200 phone from 10 years ago is treated as the same amount of “output” as a $200 phone from today( ignoring inflation for now), when obviously the $200 phone from today provides more value than the one from the past. The $200 figure only measure the phones value at the present time given the present set of consumption options, in this way the phone has a value of $200, but it most definitely does not have a $200 value across time.

This problem always seems to be brushed aside in economics courses, it’s recognized but not really given much thought… and this attitude I have never really understood.

When you consider the above problem you can see that GDP could stay flat ( or even fall) and still be accompanied by increases in the standard of living. The rapid advancement of technology has made this problem all the more relevant.

I bring all this up because I think that this is part of the reason, ostensibly, for the the adjustment.

Another good example - a $500 T.V today is much better than a $2,000 T.V from 15 years ago. Same thing applies to vehicles.

[/quote]

Good points all.
But here is where my problem lies…quality increases are not something that have appeared just during this administration. Past administrations have dealt with the same issues and either were praised or pummeled for the outcomes.

It just appears more of the same from this administration. If your policy fails, redefine the outcome. [/quote]

No doubt.