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Old 02-27-2018, 07:16 PM
 
Location: Aurora Denveralis
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Quote:
Originally Posted by craigiri View Post
When everyone in this country is taken care of in the right way (based on our GDP), then I'd be a bit more apt to say "busy work is better than no work". But for now there is plenty of REAL work to do.
How about abandoning altogether the idea of a worker-based economy? Far better than millions of ants moving things from one place to another, and back again, just to be "working."

Quote:
BTW, Americans work more hours (by a good margin) than other civilized and industrialized countries. As a result, family and recreational and other time is sacrifices on the same altar - that of GDP.
That's only the tip of the iceberg in human costs. All in the holy name of expanding GDP.
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Old 02-27-2018, 07:58 PM
 
8,504 posts, read 2,389,571 times
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Quote:
Originally Posted by Quietude View Post
How about abandoning altogether the idea of a worker-based economy? Far better than millions of ants moving things from one place to another, and back again, just to be "working."

That's only the tip of the iceberg in human costs. All in the holy name of expanding GDP.
I agree partially. When you consider the amount of time, energy and stress (health!) that it takes to wake up early, drive (alone, usually) in a two ton vehicle over billions of dollars of infrastructure to get to your workplace and then largely each sell things to each other that we could buy online anyway......

Having had a worklife that revolved around productivity and energy, I tend to look at things that way. I lived in the same town as my biz - 5 miles away - and often biked to work. For the last couple decades of my career, I ran a very popular web magazine/forums from my basement...part time.

Even these days in "retirement", I tend to look at the equations of efficiency. If someone wants me to drive one hour each way to attend a 45 minute presentation I am almost a definite no. We purchased vacation (retirement) houses in areas where everything was close by...either by walking, biking or less than 10-15 minutes by car. It is an entirely different way of life.

Now my big problem is family...they are spread all over the country and I fear I am going to have to fly to see them (more than I'd want to energy-wise). In any case, I am definitely adding to the GDP with my home purchases and all this other stuff - my kids having babies will add a LOT more!

I always lamented the "copy machine salesperson" when there were already 20 of them locally and the 21st office opened. Or the office that hires 200 Real Estate Agents when only 30 could possibly make a living based on the sales possibilities.
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Old 02-27-2018, 08:13 PM
 
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High GDP could be a bad thing. It has to do with service sector and price inflation. If a dentist charges $USD9,000 to do one dental implant, while the same dental implant in Taiwan only costs $150, then you see how GDP can be exaggerated. The dentist service income is of part of GDP.
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Old 02-27-2018, 08:23 PM
 
6,817 posts, read 4,410,206 times
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There are really two separate lines of reasoning here.

The first one is concerned with ingredients for material growth. What sort of work, what sort of production, what sort of keeping-busy, really is conducive to material growth? Taking educated people, putting them on a starvation diet, forcing them to dig frozen dirt with their bare hands to build a canal connecting the White Sea and Moscow - as was done in the USSR in the 1930s - is probably not a productive way of employing these people. Sure, it keeps them busy. But there's a staggering opportunity-cost. And the product of their labors - a canal too narrow and shallow for useful shipping - is nugatory. Thus the argument, that mere work, for work's sake, isn't necessarily conducive to economic growth. So then, to cap off this line of reasoning: is GDP-growth really congruent to economic-growth, or is it an inaccurate means of accounting?

The second line of reasoning questions economic growth itself. Let's suppose that we're good little capitalists, and we've figured out labor-management relations, the "right" level of taxation, ratio of public to private investment and the like. Our economy is burgeoning. We all get more stuff, and higher quality stuff, for fewer and fewer hours of labor. To me, it's obvious that this is a good thing. But some would question that. Well, what else ought we to be doing? Engaging in theological disputations? Exploring the galaxy? Having more sex? All fine things, I suppose. But should we be doing them in lieu of pursuing economic growth, or in parallel with it? I mean, it's hard to argue that mere pecuniary rewards are the totality of all that matters. That's not really the crux of this second line of reasoning. Rather, the assertion is that economic growth, beyond some minimal point, is per se foolish.

Well, I'm not entirely sure about the first line of reasoning. GDP isn't congruent to economic growth. But I do think that it correlates pretty well. A society that employs half of its people in digging ditches, and the other half in filling them back up, won't long prosper. But if the ditch-digging/filling is used as a temporary, palliative measure to smooth out troughs in the economic cycle, likely that's actually a good thing. If nothing else, it keeps the shovel-factories productive; and the chiropractors.

As to the second line of reasoning, that materialism is a fool's errand, well, here I disagree quite vehemently. A contemplative life isn't really attainable, unless you already are well-fed, warm, and healthy... and all of that takes money. I love to write poetry, but I hate doing it on an empty stomach.
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Old 02-27-2018, 10:56 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,731,643 times
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Quote:
Originally Posted by craigiri View Post
My "alternative answer" is that efficiency is the name of the game of the present and future and that means more for less. If we spend less, then GDP is less, right?
No. If everyone is working and efficiency (productivity) goes up, then what happens to GDP? It goes up. Real GDP (per worker) can only rise if productivity increases. More production of goods and services per hour of work.

In your example, you are only looking at one variable, and not the whole picture. If you spend less on X then you will spend more on Y.

GDP isn't the greatest measure of economic well being for sure. Like your examples, the less we spend on healthcare, transportation, security, etc for the same service quality, the better off we will be. But GDP isn't an evaluation of specific industries for quality. It's just a measure of overall production.
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Old 02-27-2018, 11:27 PM
 
290 posts, read 347,184 times
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High GDP isn't why we have expensive healthcare. There are plenty of high GDP countries with cheap healthcare.

In past human history, having a high GDP meant survival. A nation that could produce more guns, tanks, catapults, etc or have more of their countrymen in armies rather than farming would usually win in wars. It wasn't the only factor but it was a very important one. We take it for granted today but we Americans don't really think about being invaded or conquered by other nations now and that is really because the US has such a high GDP relative to the rest of the world.

I mean yes, I'd like to have an easy life and not run the rat race. I could fish for a couple hours a day and live in a hut... the simple life. There is an anthropological book that described a culture in the pacific islands hundreds of years ago. That island was peaceful and lived modestly. A simple life fishing, living, enjoying. But there was another island that was crowded and groups formed and fought each other for land and resources. They learned to build efficiently and to create new things, weapons, tools. They learned to conquer or be conquered. Eventually their ships reached the peaceful island and they killed every inhabitant of it. I could mention the title of the book but it does not matter. This is a story repeated again and again throughout human history.

There are still people alive today who remember living through WWII. If you live in a developed nation, you are living in very peaceful time relative to the rest of human history. It has not been that long.
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Old 02-28-2018, 08:28 AM
 
Location: Paranoid State
12,672 posts, read 9,425,981 times
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Quote:
Originally Posted by craigiri View Post
...and yet I cannot understand the USA's current focus on increasing GDP.
GDP per capita is a measure of societal well-being.

Quote:
Originally Posted by craigiri View Post
...I can see why it might be important for a developing country as a way to measure growth. But in a country as developed as ours, it's really hard for me to see increased GDP as a good thing.
Increasing GDP typically entails (a) increasing employment, (b) increasing productivity, (c) increasing returns to shareholders (the largest of which, of course, are public sector pension funds and in aggregate private sector 401K and private pension plans).

All of those are good things, are they not?


Quote:
Originally Posted by craigiri View Post
...

1. We are paying the highest rates in the world for health care - reaching almost 11K per person per year. That money being spent is all GDP, right? So if we had a system that was closer in cost to some country (which get better results, live longer), our GDP would be lower.
Health care in the USA is an example of long-run declining productivity -- which is why the units of health care are priced so high that in aggregate we consume about $11K per person per year. Most of the declining productivity -- output per hour of labor required across the entire health care/health insurance system -- is because of bureaucracy and administration. Count the number of employees at a typical medical clinic: that's the denominator. Now count the number of those employees who do not deliver health care, but rather deal with insurance bureaucracy and administration: that's the numerator. The ratio of those two -- the numerator divided by the denominator -- is a measure of inefficiency, and that ratio has gone up consistently for the past 40+ years.

When that typical medical clinic hires more employees, at the margin they are not doctors or nurse practitioners or physical therapists or x-ray techs; those marginal hires are paper pushers who do not deliver health care goods and services but rather their entire job is focused on getting paid by insurance companies and complying with the various regulatory reporting requirements.

If we could eliminate, say, 50% of the people who are employed by medical clinics and health insurance companies whose sole job is billing and payment and arguing over bills and payment, productivity would go up substantially. The end result would be much higher productivity. That $11K per person per year would then come down.

Note the above means actually firing those people employed by health care/health insurance companies who do not actually deliver health care. What, then, would they do? They are bright and they could go find other work that actually contributes to society. When buggy-whip manufacturing and sales employment plummeted, people found gainful employment in other sectors of the economyl.

Quote:
Originally Posted by craigiri View Post
...2. If I trade in my Subaru for a Prius (even trade) and get 2X the MPG, I will buy 1/2 as much gasoline this year. That will lower GDP (when taken times tens of millions of vehicles).
In your example, the fraction of disposable income allocated to gasoline purchase shrinks a bit. That doesn't reduce total disposable income. It frees up a bit so that it can be (a) consumed by purchasing something else, or (b) saved (invested) for future consumption.

Note in the real world, when gasoline prices spike, casual restaurants frequently discover a decrease in demand reflected in their earning statements and analyst calls. When gasoline prices plummet, casual restaurants typically see an increase in customer traffic.

This type of change in consumption at the micro level occurs all the time as people change their consumption behaviour in response to changes in individual prices and income.

Quote:
Originally Posted by craigiri View Post
...3. If our "Security State" which has grown massively in the last 15 years...was cut down to the true size needed without watching every word and action of every square miles in the entire world (and every sq ft in this country) - this would also lower GDP.
I agree with you there. It is tempting to say your scenario would free up government spending to be spent on something else; that would be true at the state and local level, but the federal level is its own beast where aggregate federal expenditures are not constrained by a budget.

Quote:
Originally Posted by craigiri View Post
...4. If, instead of owning a tablet, computer and smart phone ($4K not so long ago) I own just a large Phablet, GDP is cut down as well as electric use (GDP also). In fact, every efficient device we all own cuts down the amount we pay for the fuel(s), and therefore lowers GDP.
See my response on gasoline prices. As people consume less electricity on electronics and consume less on tablets, computers & smart phones, that frees up that consumer discretionary purchase money to be (a) spent on something else, or (b) saved/invested to support future consumption.

Quote:
Originally Posted by craigiri View Post
...5. If Trump gives away 1.5 Trillion dollars out of debt and deficit, some of that money will be spent on things which increase GDP. But there is no "other" side of the equation for the debt, deficit and interest on all of it.
Trump doesn't give away anything; he's discovered there are limits to what a President can do by Executive Order. Congress, in its wisdom, does. If you don't like what Congress does, vote them out & vote in someone else. There are only 435 voting members in the House of Representatives, and another 100 voting members of the Senate. Vote them out.

Quote:
Originally Posted by craigiri View Post
...Again, my takes is that the future (in the entire world, let alone the US) belongs to the efficient...and, almost by nature, efficiency means more for less.
Efficiency means more output for less input, where input includes labor, capital, raw goods, parts, etc. Note the Walmart Effect and the Amazon Effect - their innovation is efficiency in distribution and logistics rather manufacturing efficiency

Productivity, means more output for less labor input.

And I agree with you : efficiency is a key strategic advantage for many (but not all!) businesses.
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Old 02-28-2018, 08:30 AM
 
Location: Paranoid State
12,672 posts, read 9,425,981 times
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Quote:
Originally Posted by Quietude View Post
We are already paying a steep global cost for unrestrained economic growth.
Straw man, of course. The world has not had unrestrained economic growth for a century. Nice try. Play again and maybe you'll get lucky.
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Old 02-28-2018, 08:43 AM
 
Location: Paranoid State
12,672 posts, read 9,425,981 times
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Quote:
Originally Posted by 6oo9 View Post
High GDP could be a bad thing. It has to do with service sector and price inflation. If a dentist charges $USD9,000 to do one dental implant, while the same dental implant in Taiwan only costs $150, then you see how GDP can be exaggerated. The dentist service income is of part of GDP.
Going from individual sub-markets such as the market for dental implants to GDP is a big leap. Economics is the study of the allocation of scarce resources in a world of unlimited wants and desires. People react to changes in prices by consuming more or less of something, and in response, consuming more or less of something else. Therefore, you can't just look at a change in demand in one sub-market (dental implants) and conclude there is a change in GDP. The change in demand in one sub-market is one piece, but changes in demand for everything else must be taken into account.
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Old 02-28-2018, 08:45 AM
 
Location: Paranoid State
12,672 posts, read 9,425,981 times
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Quote:
Originally Posted by rruff View Post
No. If everyone is working and efficiency (productivity) goes up, then what happens to GDP? It goes up. Real GDP (per worker) can only rise if productivity increases. More production of goods and services per hour of work.

In your example, you are only looking at one variable, and not the whole picture. If you spend less on X then you will spend more on Y.

GDP isn't the greatest measure of economic well being for sure. Like your examples, the less we spend on healthcare, transportation, security, etc for the same service quality, the better off we will be. But GDP isn't an evaluation of specific industries for quality. It's just a measure of overall production.
Can't rep you again -- but you're more eloquent and brief than I am.
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