Posted on 06/27/2008 11:15:35 AM PDT by The_Republican
The left has been saying this for at least 5 consequtive quarters.
You are right. The economy has never been better. It’s just a VLWC plot.
It's never been better for me. Instead of wringing my hands, I'm growing my income: up 40% in the last year.
When the sky does fall will it hurt?
Exxons profits are not GDP. If Exxon sells more oil in the US that is GDP, but with flat total spending, consumption somewhere else will drop, since the total quantity of expenditures cannot change with a fixed quantity of money (velocity assumed unchanged by rising oil prices). It is only when the FED creates more money that inflation kicks in.
Is Drudge, where this appeared, part of the left?
You’re right. It’s over. Time to start shooting our own food and prying the siding off neighbor’s houses to build forts with.
You don't keep up well with the times do you?
Here's why the 1% growth is so significant. They've been telling people the same thing you're trying to tell me for a year now. And they STILL can't get negative growth...in fact the number has been revised UPWARD from .6% to 1%.
Beginning stages? LOL. You may think you are saying something new but it has been the same thing repeated now for over a year...they were hoping the doom hype would snowball into a full blown recession and it hasn't worked. But you (like the frog I might add) sit stupefied in the lukewarm slop of MSM propoganda.
In addition the rebate checks are terrifying the fear-meisters. The checks are now being received en masse. Wait and see what happens to retail.
LOL.
Government can never legislate away business cycles, and they will never be able to.
Gotcha! Your world is the only one that counts. If your economy is up then everybody’s economy is up. You are the only person who counts. Gotcha!
This is like the posts I would get from people in Seattle saying “our house went up 10%” last year. The entire nation is down 15% on average, but because 3 cities went up last year, the blind people in those 3 cities think that real estate is still going up.
Now I completely understand you. Because you are doing better financially, there can’t be a recession and all is well for everybody. Gotcha. That’s a very blind view of the world, “what is true for me must be true for all.”
Its beats "I'm doing great, everyone I know is doing great, but I'm worried about the guy down the street. He's doing great, too, but I'm worried because CNN tells me it's the worst economy in 50 years."
You lost me. You have a clearer understanding of economics than I do and I’m confused by your statement “since the total quantity of expenditures cannot change with a fixed quantity of money.”
Doesn’t this presume that all money is being spent at all times. If I have $10,000 in my mattress and then spend it on purchases, did I not just cause GDP to grow by $10,000 as producers have to ramp up capacity to replace the goods I purchased?
If GDP is dependent only on the “fixed quantity of money” then GDP would exactly mirror monetary growth, period, end of discussion. What if inflation goes to 1000% and everything costs 10 times as much money? GDP doesn’t change since it is only based on a “fixed quantity of money”.
If everybody in the nation starts putting 10% of their income in their mattresses, are you saying GDP isn’t affected because the fixed quantity of money is still the same?
You know what you meant but you lost me and I don’t know what you meant. Anything you can add to help me understand what you meant would be sincerely appreciated. Thanks.
I thought GDP was the sum total of all money moving around in the system, cash, credit, bonds, notes, and all the money on the sidelines doesn’t count. So I thought GDP is what comes from all of the people consuming and all the businesses investing. I didn’t think saving counted toward GDP, so more saving = less GDP. I also thought that GDP was adjusted for inflation, so the higher inflation the lower reported GDP is.
I guess I need a lesson on how they calculate GDP and if I agree with the reasonableness of how they calculate it.
Happens every Republican quarter:
(unemployment figures revised downward...shhhh )
Nope. It is the annual sum of the quantities of goods and services x their prices. If output is at a maximum for the capital and labor available, then quantity cannot change and so more money means higher prices which means inflation.
What I was asking was this... I don’t know how to ask the question, so let me ramble on and if you can still follow my logic here, let me know if my beliefs are right or wrong...
Here is a scenario... Lets say the number of gallons of gasoline sold in the USA stays the same, but the price of gasoline doubles, then the amount of money people spend on gasoline has doubled.
Is this increase in money spent on gasoline considered an increase in GDP? My understanding is that it is.
Next... Since the cost of gasoline (energy) is not included in core inflation, the inflationary rise in spending due to the doubling of gasoline prices is not used to downwardly adjust GDP.
Therefore, when gas prices soar, GDP is reported up and is not adjusted for inflation since energy is outside the core inflation.
To me this artificially raises GDP from the increased revenues retailers get from food and fuel inflation, while that same inflation is not corrected in this increase. So GDP is stated to be up but in fact it is not actually up since the stated increase in GDP is actually due to inflationary forces, NOT increased productivity, but those inflationary forces are wrong.
If I haven’t lost you yet, is my belief generally correct or am I completely off base here.
My entire point is that people continue to say we are not in a recession ONLY because the official government numbers continue to indicate that GDP is still growing. But I contend that GDP is NOT growing, because the government is failing to account for inflationary forces that are responsible for the cost increases they are reporting as GDP growth.
Have I lost you?
GDP isn't adjusted using core inflation. They use something called the Implicit Price Deflator (or GDP deflator).
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