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Depreciation SOUNDS like it's related to things "wearing out". It's not. It's a way that expenditures are spread, in accounting terms, over multiple years, for those things that are long lasting and will be used for multiple years.
But if they did not wear out they would last FOREVER rather than multiple years.
I’m still a bit unclear about what your point is with this thread, but what I’m addressing with depreciation is far from simply an issue of semantics.
I am talking about the economics profession ignoring the depreciation of durable consumer goods since WWII with the NDP or NNP equation.
Before 1990:
NNP = GNP - Depreciation
After 1990:
NDP = GDP - Depreciation
Durable Consumer Goods like cars, refrigerators and air conditioners have been added to GDP/NDP since WWII. They wear out and get trashed. But the economics profession hardly talks about NDP though we are constantly bombarded with
I am talking about the economics profession ignoring the depreciation of durable consumer goods since WWII with the NDP or NNP equation.
Before 1990:
NNP = GNP - Depreciation
After 1990:
NDP = GDP - Depreciation
Durable Consumer Goods like cars, refrigerators and air conditioners have been added to GDP/NDP since WWII. They wear out and get trashed. But the economics profession hardly talks about NDP though we are constantly bombarded with
Regarding depreciation of consumer goods, what difference does it make? If you buy something cheap or not well made it wears out quickly. If you buy something more expensive and well made it may last a lifetime. But in any case, unless it's a business expense there is no provision in the tax codes to depreciate the item. Why should there be? That would be like getting your money back on everything you buy through tax credits. In business, depreciation is used to alter the value of your net worth, and expense items over time. There's no real use for that when it comes to personal finances. I too don't understand the OP's point.
Are you saying that consumers do not have Net Worth?
Why shouldn't accounting/finance be mandatory in the schools? Are we deliberately producing dumb consumers?
This is not the 1950s any more. The world population is triple what it was back then. What does making garbage do for pollution and CO2?
You think running a planet of SEVEN BILLION PEOPLE on defective algebra makes sense?
And then we have had nuclear arsenals pointed at each other by people arguing about economic ideologies even though it appears that neither of the opponents can do algebra.
Then there is the issue of how much demand side depreciation is the result of unnecessary manufacturing due to planned obsolescence.
You think running a planet of SEVEN BILLION PEOPLE on defective algebra makes sense?
And then we have had nuclear arsenals pointed at each other by people arguing about economic ideologies even though it appears that neither of the opponents can do algebra.
Then there is the issue of how much demand side depreciation is the result of unnecessary manufacturing due to planned obsolescence.
Which brings in planned obsolescence deniers.
Nobody is running a planet of SEVEN BILLION PEOPLE.
Anyway, how do you figure incorporating depreciation into the equation would benefit anyone?
Are you saying that consumers do not have Net Worth?
Why shouldn't accounting/finance be mandatory in the schools? Are we deliberately producing dumb consumers?
This is not the 1950s any more. The world population is triple what it was back then. What does making garbage do for pollution and CO2?
Well of course consumers have net worth. But what would calculating it do? How does that improve anything? What is the tangible benefit of doing that?
I learned accounting and finance. I also learned art history and political science. In fact I installed computerized accounting systems in a few businesses so I had to understand their manual bookkeeping systems to do so. My wife took bookkeeping in high school. None of that affected us as consumers. You don't have to know double entry bookkeeping to buy a TV or a car or a house. It really doesn't matter what you learn in school. The exercise of learning is what is taught. It could be French or Chemistry or spot welding or carpentry.
We do make a tremendous amount of garbage, especially in disposable boxes and paper products and plastic bottles and containers, etc. But do you know what the world's number one product in terms of quantity and volume is? It's poop. Every living thing poops. In fact if I were viewing the world from another part of the galaxy I would draw the conclusion that all living beings exist only to fertilize the planet with poop on a continual basis. But no one calculates the value of this essential product of human life and the life of the planet. Why isn't the National Poop Product mentioned by economists?
To the people thinking individuals should get depreciation for their consumer purchases, those people aren’t deploying assets in the pursuit of profit with risk of loss. Why would you get rewarded with a tax deduction?
I am not talking about a tax deduction.
I am talking about the economists in every country computing GDP and NDP while ignoring the depreciation of durable consumer goods. Should they treat air conditioners like bananas?
Notice that they do not mention NDP much to all of us peons.
Nobody is running a planet of SEVEN BILLION PEOPLE.
Anyway, how do you figure incorporating depreciation into the equation would benefit anyone?
Collectively the human race is running the planet.
Some morons have more influence than others.
Trump seems to be able to pull the strings of some nitwits.
How many people take Economics 101 every year. I suspect some of them would find it interesting that the NDP equation has been incorrect for 75 years.
Of course all of the people blathering about education for the last 75 years should explain why accounting hasn't made sense.
Adam Smith said, "read, write, and ACCOUNT".
Have you heard of that book Wealth of Nations?
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