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There is a famous speech from long ago by Bobby Kennedy ... and, of course, most are familiar with the famous speech given by IKE detailing what the Military Industrial Complex money SHOULD BE BUYING (schools, hospitals, etc.).
I'm fairly good at understanding economics - owned and ran businesses for 40 years. In addition, I am well versed in history and current events...and yet I cannot understand the USA's current focus on increasing GDP. 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. ... If we spend less, then GDP is less, right? ... 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. There are many other similar situations in our everyday lives - cooking at home and watching Netflix lowers GDP vastly over eating and drinking at a local establishment and then catching a movie. IMHO, not only does efficiency save money and resources, but it creates a better society overall (less traffic, pollution, waste, etc.).
Craigiri, GDP describe the size of the pie being divided; all of the goods and services we produce.
GDP is less informative unless we consider GDP per capita.
The median wage gives us a good picture as to how that pie's being sliced. Median wage or individuals persons or families' incomes give insights as to how that aggregate wealth is or is not being distributed among us.
As you stated. how efficiently we are served by our expenditures is among the critical economic factors. If a city believes that it's more important to retain a professional ballclub rather than improve their schools and fix potholes, that's their priorities. We can hope to replace but cannot re-spend our spent dollars.
Annual trade deficits are always detrimental to their nation's GDP. Lesser GDP reflects upon numbers of jobs and unemployment is also reflected upon GDP.
IMO the low purchasing powers of USA's median wage has and is of greater economic detriment than has our chronic annual trade deficits. But there's no doubt that both the lesser purchasing powers of wages, and/or lesser numbers of jobs, and/or lesser exports than imports all are economically detrimental.
People maintaining fish aquariums are aware their environments are delicate balances of factors that will kill their fish if not properly maintained.
GDP is among the critical factors regardless of the nation's stage of economic development. It is not of lesser importance to economically more developed nations.
Craigiri, GDP describe the size of the pie being divided; all of the goods and services we produce.
GDP is less informative unless we consider GDP per capita.
The median wage gives us a good picture as to how that pie's being sliced. Median wage or individuals persons or families' incomes give insights as to how that aggregate wealth is or is not being distributed among us.
GDP is among the critical factors regardless of the nation's stage of economic development. It is not of lesser importance to economically more developed nations.
Respectfully, Supposn
All good, but can you give the True/False on my basic statements:
1. Medical care at 2X the price of the rest of the world = higher GDP (with no benefit to The People except some corporations and highly paid employees...very few).
2. The Security State at 2X the cost it was - the total is almost incalculable - I heard it's about 35% of DOMESTIC spending now (gubment) as well as the 700+ Billion spent on the Pentagon and Energy Dept (nukes, etc.).
3. Doesn't the 1.5 Trillion that Trump is adding to debt and deficit increase the GDP (assume most of it is spent by citizens or as income to corporations, therefore their shareholders.
This is my Main Point. In a fair world where we were not in hock and paying proper prices for goods and services, GDP could be used year after year with some consistency. But when gas was $4 a gallon and cars got 14 MPG - we spent a lot more (and gas stations, oil company and others ) made a lot more GDP.
Again, the point is that if we fixed medical care and spent a trillion less per year, GDP would go down, right?
If this is all true (or most of it), GDP represents how much we are overpaying....at least after a certain point. Trump can borrow 2 Trillion more and put it in our paychecks and magically increase GDP, right?
All good, but can you give the True/False on my basic statements:
1. Medical care at 2X the price of the rest of the world = higher GDP (with no benefit to The People except some corporations and highly paid employees...very few).
2. The Security State at 2X the cost it was - the total is almost incalculable - I heard it's about 35% of DOMESTIC spending now (gubment) as well as the 700+ Billion spent on the Pentagon and Energy Dept (nukes, etc.).
3. Doesn't the 1.5 Trillion that Trump is adding to debt and deficit increase the GDP (assume most of it is spent by citizens or as income to corporations, therefore their shareholders.
This is my Main Point. In a fair world where we were not in hock and paying proper prices for goods and services, GDP could be used year after year with some consistency. But when gas was $4 a gallon and cars got 14 MPG - we spent a lot more (and gas stations, oil company and others ) made a lot more GDP.
Again, the point is that if we fixed medical care and spent a trillion less per year, GDP would go down, right?
If this is all true (or most of it), GDP represents how much we are overpaying....at least after a certain point. Trump can borrow 2 Trillion more and put it in our paychecks and magically increase GDP, right?
Craigiri, our nation's priorities are determined by “We, the people of the United Statesâ€. We voters have permitted our government to devote resources and strive to step on our moon and move our devices throughout our solar system. We could not do so if we did not produce sufficient goods and services to finance those adventures.
Apparently many believe we voters have not demanded that government make public health a sufficiently greater national priority. On the contrary, one of the major political party's striving to reduce government's concern for public health.
Certainly, USA's public health will not improve if we reduce our production of goods and services; but the right wing of the Republican Party contends that our public health would not be reduced and possibly be improved if our government strived less and devoted fewer resources to public health. Is that your position?
You seem critical of our government's efforts and devotion of production on behalf of military security; but the same right wing of the Republican party advocates we spend more effort and resources for military purposes.
Regarding your questioning if “1.5 Trillion that Trump is adding to debt and deficit†increases USA's GDP, the answer is yes but only to the extent that it induces production of greater goods and services; (i.e. services derived from persons, or commercial or government enterprises are all services contributing to calculation of GDP).
Both public and private debts and the costs of financial interests are transfers of wealth not contributing to calculation of GDP; corporate profits are also transfers of wealth not contributing to calculation of GDP.
The purely economic points (as opposed to the social ones) can be summarized thus:
1. Suppose that you and I each wash our own respective cars. Our cars, once dirty, now become clean. We spent time on the washing of our cars, but because we did it in our respective driveways, on our personal time, no money was charged. There was no palpable impact on GDP. But was anything of value produced? Did the economy grow?
2. In the alternative, you wash my car, and I wash yours. We each charge one another $5 for our respective labor. Now was there impact on GDP? Now did the economy grow?
3. In scenario (2), we each declare our respective $5 as income, and pay income-tax on it. Same two questions.
4. In yet another scenario, our two cars initially are clean. I then walk up to yours, with a bucket of slop, and throw said slop onto your car, making it dirty. You do likewise with my car, necessitating that both cars be washed. Same two questions.
5. Finally, in one more scenario, we each take our cars to the car-wash... a local retail business... and pay said business $5 for the car-wash. Again, same two questions.
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).
This is assuming everyone could use a Prius or full electric car like Tesla. I have only seen a couple Prius here in my area, and they were tourists in the summer time, and have never seen a Tesla.
Go to any parking lot and see about 75% of all vehicles will be a medium size or larger SUV or a
Crew Cab Pickup (4 door), all with AWD or 4X4. And the DMV not very long ago, said not one Tesla is registered in the state. Reason, in winter the cold diminishes the range by 60%, and again it is diminished when you have to go up a steep hill or mountain. I could not get to a city 50 miles, or 90 miles in the other direction, and return home.
Today the Pickup is the hot seller around the country, and even the wealthy are replacing their big sedans with Pickups, and large SUVs.
Today the Pickup is the hot seller around the country...
"Today"? Pickups went from about 5% of the market in the early 1970s to over 50% by... about 1980, might be slightly later than that. And have never really subsided.
Many factors, but mostly because those earliest generations were exempt from most smog and safety regulations, making them lighter, cheaper and "sportier" than nearly all cars. (At, of course, the cost of higher emissions - which were ignored because "it was such a small market segment and would punish the poor working man who depended on his pick'em'up") and safety lapses that undoubtedly killed a few extra tens of thousands (cabs would crush like eggshells... often with the teenaged driver inside).
(Fun Fact 1: In 1978, the fastest quarter-mile time for a production American vehicle belonged to... Dodge's "Lil' Red Truck," a factory hot-rod shortbed.)
(Fun Fact 2: the first generation of minivans conformed to... light truck safety standards. Sure, pack in the whole family... Why do you think it took so long for makers to start touting safety ratings? They didn't want anyone to notice the ones still being paid off had the safety of an apple crate.)
But back to GDP, higher of which is good no matter what the human/population cost, right?
This is assuming everyone could use a Prius or full electric car like Tesla. I have only seen a couple Prius here in my area, and they were tourists in the summer time, and have never seen a Tesla.
Go to any parking lot and see about 75% of all vehicles will be a medium size or larger SUV or a
Crew Cab Pickup (4 door), all with AWD or 4X4. And the DMV not very long ago, said not one Tesla is registered in the state. Reason, in winter the cold diminishes the range by 60%, and again it is diminished when you have to go up a steep hill or mountain. I could not get to a city 50 miles, or 90 miles in the other direction, and return home.
Today the Pickup is the hot seller around the country, and even the wealthy are replacing their big sedans with Pickups, and large SUVs.
Most people - the VAST Majority, can use a Prius or Electric car. Of course, there are also hybrid SUV's and electric trucks...just around the corner (soon).
I've lived long enough to see that when gas gets cheap everyone goes out and buys big vehicles. They are like little children at an "all you can eat" ice cream setup. When gas was high SUVs were not selling at all. Remember - Hummer went out of business!
Despite your claims, gasoline use has headed downwards for the first time in modern history. This effectively means that even if some are buying low MPG vehicles, they are driving their other care most of the time.
"Go to any Parking lot"? Where? In "progressive" areas you will hardly ever see a big SUV and most all pickups have a landscape or other trailer attaches to them. After all, who wants to shoehorn some big behemoth into parking spaces, smaller lots, smaller streets, etc.
Where we live in New England there are vast amounts of hybrids and high MPG cars...and it snows...a LOT. There are even quite a few all-electric cars and charging stations. People often buy them as their 2nd car. Believe it or not, a LOT (most) people rarely wander very far from home. My entire working life was spent 5 miles from my house. The beach, considered far, was 46 miles of flat land driving. Most of the big retail stuff was anywhere about 7 miles away. Same goes for these days - the big
(Fun Fact 2: the first generation of minivans conformed to... light truck safety standards. Sure, pack in the whole family... Why do you think it took so long for makers to start touting safety ratings? They didn't want anyone to notice the ones still being paid off had the safety of an apple crate.)
We owned a LOT of minivans and small Subarus (station wages) and always looked up the safety ratings. No way we would have bought any of them if they weren't at least 4 stars.
Your "fun facts" are funny - just like the "fun facts" given above that any parking lot is gonna be filled with trucks and SUV's. Sure, at the Country Music Bar.....but not where I hang out.
In many places in New England, a nice car is considered "showing off" and among those of Yankee Mentality that is a mortal sin. Yet here in Florida, my friend pulls up in his Maserati and no one gives it a second look.
Fact - if you want to take about Fact, the fact is that people and places are different. Add up all the cars and minivans and tiny pickups and car-chassis suvs (good MPG) in the top 40 sellers and they tend to blow away pick-me-up sales....much more so, though, when gas is expensive.
My thinking is that gas has often been double the price within short spans of years - so I would never buy a low MPG SUV, Car or Truck unless I needed it 100% for work...or, I hardly ever drove it. I have many other things I'd rather spend money on than a loaded Truck and twice as much gas.
Back to GDP - this is proving my point! People who buy a 50K loaded SUV with horrible gas mileage are adding to GDP, and yet they are arguably making quality of life worse for others (can't see past them on the road, can't back out safely in parking lots next to them, higher demand for gas = higher prices eventually). Perfect example. More CO and CO2 also, etc.
Our country is not better off when people drive bigger vehicles...IMHO, but that's only one small part of this.
Back to GDP - this is proving my point! People who buy a 50K loaded SUV with horrible gas mileage are adding to GDP, and yet they are arguably making quality of life worse for others (can't see past them on the road, can't back out safely in parking lots next to them, higher demand for gas = higher prices eventually). Perfect example. More CO and CO2 also, etc.
I answered you before. What people spend on one thing is money they don't have for another. All the inefficient and stupid expenses we have do not add to GDP. They do lower our effective living standard but they have nothing to do with GDP.
Real GDP per capita can only rise if productivity (or work hours) increases. Real goods and services produced per hour of work.
IReal GDP per capita can only rise if productivity (or work hours) increases. Real goods and services produced per hour of work.
Okay, no argument. What we've kicked around is that some large percentage of this productivity will be due to automation, soon to edge into whatever everyone wants to call the next tier of wetware replacement, and not human sweat and toil. But the assumption is that this "productivity" will continue.
So in that respect, what difference does a fairly arbitrary index like GDP mean? It seems to me to be tied to how deep a pool of sweat we generated. If we don't sweat any more, if "productivity" is in the hands of machines and a steadily shrinking pool of human overseers, what relevance does it have to the overall economy?
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