U.S. Bogus GDP Economic Growth Statistics - More Government Manipulation

Gary Gately writes: America's about to become more wealthy - on paper, at least.

That's because the way the country's gross domestic product, or U.S. GDP, is measured will change significantly come July 31, enough to boost the closely watched economic barometer by 3%, or $400 billion.

That translates to the equivalent of about $1,500 more worth of goods and services per person in the United States.

The U.S. Commerce Department's Bureau of Economic Analysis claims the changes will allow for more consistent comparisons with data for the economies of other nations.

What the revised U.S. GDP, which will apply retroactively to 1929, will really do is make the country look healthier than it actually is.

"What it speaks to in my mind is the oldest of all games: It's administrative whitewash," Money Morning Chief Investment Strategist Keith Fitz-Gerald said. "If reality doesn't fit your statistics, you adjust your statistics and say, 'Let's make everybody feel good about what we're doing by readjusting the calculations.'"

Three changes in the way the BEA calculates GDP will account for most of the difference: research and development will be counted as a capital investment instead of as a cost of making goods; investment in artistic originals like books, TV shows and movies will be counted as fixed investments; money that pension plans promise to pay retirees will be counted as wages.

Fitz-Gerald said to think of it this way: What if a publicly traded company were to restate its earnings - dating to 1929?

post the numbers that compare 0 to Hoover’s, and they look about the same, I’m sure some googling will pull it up to post.
Don’t have time to do it today, am cleaning old house to get it on the market, and must leave soon.

Glad I am finally out of the cesspit of Memphis and into Tipton Co, lower taxes, lower car ins lower house ins. Nice neighbors too.

This is TOTAL CRAP. Ok, R and D could be counted as a capital investment and a contributor to GDP but only if you take all previous R and D and depreciate them over time and subtract from GDP which is the way it should be done and this would probably reduce GDP. TV shows and movies lose copyright protection after 75 years and almost all of them except for a few lose all value after 5-10 years. Even top shows like I love Lucy and Bewitched have near zero value today. TV shows and movies can not be treated as fixed investments. Now original physical art pieces that can not be reproduced like a Monet or Renoir should be treated as fixed investment. And finally last and definitely worst is having future pension payments counted as today's wages is the most outrageous of the three changes. The next step is to count future dividends as today's income and add that to GDP as well. Maybe paying for college adds to future wages and count the future wages in CURRENT GDP. Bottom line: Future pension payments count in future GDP, not current GDP. If you want to count them in CURRENT GDP then you need to pay CURRENT TAXES ON THEM. If you want to count future pension payments as income today, you need to pay taxes on them. But we know hell will freeze over before that happens.

This is TOTAL CRAP.

Ok, R and D could be counted as a capital investment and a contributor to GDP but only if you take all previous R and D and depreciate them over time and subtract from GDP which is the way it should be done and this would probably reduce GDP.

TV shows and movies lose copyright protection after 75 years and almost all of them except for a few lose all value after 5-10 years. Even top shows like I love Lucy and Bewitched have near zero value today. TV shows and movies can not be treated as fixed investments. Now original physical art pieces that can not be reproduced like a Monet or Renoir should be treated as fixed investment.

And finally last and definitely worst is having future pension payments counted as today's wages is the most outrageous of the three changes. The next step is to count future dividends as today's income and add that to GDP as well. Maybe paying for college adds to future wages and count the future wages in CURRENT GDP.

Bottom line: Future pension payments count in future GDP, not current GDP. If you want to count them in CURRENT GDP then you need to pay CURRENT TAXES ON THEM. If you want to count future pension payments as income today, you need to pay taxes on them. But we know hell will freeze over before that happens.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.