Despite what doom/gloomers say, economy roars on.
POSTED BY: AURaptor
UPDATED: Thursday, October 23, 2025 22:23
VIEWED: 13580
PAGE 13 of 19
Hey Rue- safe flight. Hope things are good at the other end. Let me know.
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Reality sucks. Especially when it contradicts our cherished ideas.
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Quote:
Originally posted by SignyM:
So in your view, "production" is what an economy should be doing. However, GDP is not a good measure of "standard of living". For example, an economy that produces a lot but exports nearly all of its production would have a low standard of living.
GDP has it's uses to measure standard of living but I agree it is not the best indicator.
http://en.wikipedia.org/wiki/Gdp
GDP per capita is often used as an indicator of standard of living in an economy. While this approach has advantages, many criticisms of GDP focus on its use as a sole indicator of standard of living.
The major advantages to using GDP per capita as an indicator of standard of living are that it is measured frequently, widely and consistently; frequently in that most countries provide information on GDP on a quarterly basis (which allows a user to spot trends more quickly), widely in that some measure of GDP is available for practically every country in the world (allowing crude comparisons between the standard of living in different countries), and consistently in that the technical definitions used within GDP are relatively consistent between countries, and so there can be confidence that the same thing is being measured in each country.
The major disadvantage of using GDP as an indicator of standard of living is that it is not, strictly speaking, a measure of standard of living. GDP is intended to be a measure of particular types of economic activity within a country. Nothing about the definition of GDP suggests that it is necessarily a measure of standard of living. For instance, in an extreme example, a country which exported 100 per cent of its production would still have a high GDP, but a very poor standard of living.
The argument in favour of using GDP is not that it is a good indicator of standard of living, but rather that (all other things being equal) standard of living tends to increase when GDP per capita increases. This makes GDP a proxy for standard of living, rather than a direct measure of it. GDP per capita can also be seen as a proxy of labor productivity. As the productivity of the workers increases, employers must compete for them by paying higher wages. Conversely, if productivity is low, then wages must be low or the businesses will not be able to make a profit.
Quote:
Given that, do you still think GDP is a good measure of "the economy", and why?
I do, because GDP takes more than just production into consideration. GDP also includes consumption and differentiates between net exports and imports. The GDP formula is fairly standardized worldwide so 'apples to apples' comparisons can be made.
Posting to stir stuff up.
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I had to look up how GDP is calculated. (See? I SAID I learned a lot here!) GDP tries real hard not to "double count", as would be the case if you counted production AND consumption. It can either be counted as production OR consumption.
We can measure GDP either by adding up all the money spent by all individuals, the expenditures approach, or by adding up all the money made by all individuals, the income approach. The expenditures approach adds all personal spending, all investment (investment meaning money spent on the things that produce like machines and buildings, etc.), and government spending, and net exports (exports minus imports). The income approach involves adding up all private income. It adds all the money that people earn (which does not count things like government help, etc.) and profits made by companies.
http://library.thinkquest.org/C004323/low/basics4.html
ALSO
GDP measures production, not exchange.... {but} GDP is represented as the sum of consumer spending, housing and business investment, net exports, and government purchases. Behind this accounting facade lurks the truth: GDP is generated by individual labor combined with both proprietors' and business capital, raw materials, energy, and technology in a myriad of different industries. The Bureau of Economic Analysis (the agency within the Department of Commerce that is responsible for GDP statistics) does show these relationships in the input-output tables and in the GDP-by-industry data tables (now produced annually).
http://www.econlib.org/LIBRARY/Enc/GrossDomesticProduct.html
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Reality sucks. Especially when it contradicts our cherished ideas.
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Quote:
Originally posted by rue:
Anyway, I'm gone for the next week.
Thank god. Is it possible to request a plane crash, I'll take inbound or outbound........
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Rap,
How 'bout that economy, eh ?
http://news.yahoo.com/s/ap/20070815/ap_on_bi_go_ec_fi/home_sales; _ylt=A0WTUcPTFsNGaSwAXQys0NUE
Existing home sales fall in 41 states
http://news.yahoo.com/s/nm/20070815/pl_nm/usa_economy_poll_dc; _ylt=AiU5hNYd6bCkUqGh_ke05IOs0NUE
Voters cooling on economic outlook: poll
http://news.yahoo.com/s/nm/20070815/bs_nm/markets_stocks_dc; _ylt=Aqf7SPS.0MKUbolk5TQ_Qq6s0NUE
The Dow industrials have lost nearly 1,000 points in just four weeks
"It was in http://www.fireflyfans.net/thread.asp?b=18&t=20100 where you claimed consumer confidence, existing homes sales and consumer spending, were the marks of a strong economy. SignyM pressed pretty hard for a definitive list from you that you would stick with. After a long, long time you shifted ground citing consumer confidence (again) 'the rate of growth' and the unemployment. When SignyM asked you about your new criteria, you bobbed and weaved, shifted the discussion to how much money (a few) people made during the Great Depression, China's and India's strong economies, threw some kind of slur on Europe, and well, completely abandoned the topic. That was your last point on the issue, on April 29. Only to post a WHOLE NEW THREAD ON THE SAME TOPIC (this one) just two days later.
In this one you shift ground yet agin to the stock markets.
So consumer confidence falls, the market falls, existing home sales fall, and you ... refuse to address the very items you launched.
Why is that?"
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"Global warming - it's not just a fact, it's a choice."
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Thanks Rue. Auraptor has an MO, and that is to bring up a topic, get thoroughly discredited on it and disappear from the thread, only to bring it up again later/ elsewhere. That's why the first thing I did when Auraptor brought up "real growth" (once again) in the "Chiquita banana" thread was to ask him HOW he defined growth. As soon as I asked, he dropped the topic. He probably had bad memeories of being asked detailed questions and being unable to answer.
I've been in his shoes, defending heartfelt positions aginst people who were older and way more politically sophisticated, feeling like I was being misunderstood and misinterpreted at every turn. I can't tell you the number of time But you know what I mean! crossed my lips. But I learned a lot of things- among other things, that what I felt deeply was sometimes quite mistaken.
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Always look upstream.
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Well, I brought this up partly to mess with Rap a little, and partly b/c a similar topic (currency) has come up.
The problem with the way the government is running is not JUST about currency. It's about government spending way out of control going from a surplus to a record deficit in under 4 years. It's about the US economy now able to be extorted by both China and Japan, who own the currency. It's about sweet-deals paid by tax dollars for preferred companies and sectors while the rest - California, minority home owners, people with crushing medical debts, veterans - get shafted. I have to say that's one thing the republicans have done well - they've picked their victims and kept the damage relatively isolated from the 'rest' of society so that most people --- don't give a crap. It's about fudging the books - putting Iraq spending into the "emergency spending bill" year after year rather than in the budget. It's about a failing infrastructure being sold off to foreign interests b/c taxes are considered the greatest evil while greed is the greatest good.
The current US administration and cronies are not so slowly taking the country's economy apart for their own benefit.
Oh, and I thought this from SignyM was worth repeating.
http://www.fireflyfans.net/thread.asp?b=18&t=29694
We're rapidly advancing to third-world status. I know my persistent anti-corporatism prolly bugs a lot of Libertarians, but you know what? Business has had it's shot for decades, especially in health care. With four times as many lobbysists as Congressmen, they've had all the opportunity to create an efficient shining model of free enterprise, and all they've done is prove that venality, corruption, ineffectiveness and greed doesn't work.
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"Global warming - it's not just a fact, it's a choice."
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How about Sentinel Group freezing it's 1.5 Billion dollar fund, because everyone is trying to sell and there are no buyers...All because of the credit crunch....Gotta love when markets are artificially inflated to look good. They will always correct themselves, letting the truth be known...
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Quote:
Originally posted by Hero:
How's the effort to push us into the slavery of godless communism going for you?
Ummmm....what the (explative) year is this anyway?.....godless communism??.
Also...I'm not blaming anyone else for my choices, I'm educated, and I work hard at the best job I could find, but if communism were implemented now it would be a raise for me. I'm on the poor side of that rich poor gap. I bet a lawyer such as yourself is not. Forgive me if I don't lend a ton of credibility to your attempt to minimize said rich poor gap
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"This economy needs something to step up and lead it forward and it looks like the export sector has become the savior" - Joel Narof, chief economist @ Naroff economic Advisers.
Commenting on the 705 billion dollar trade deficit....I'm I the only one that finds this hilarious...
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