gross domestic product

britannica.com ^ | Peter Bondarenko

[ConservativeInPA]

gross domestic product (GDP), total market value of the goods and services produced by a country’s economy during a specified period of time. It includes all final goods and services—that is, those that are produced by the economic agents located in that country regardless of their ownership and that are not resold in any form. It is used throughout the world as the main measure of output and economic activity.

In economics, the final users of goods and services are divided into three main groups: households, businesses, and the government. One way gross domestic product (GDP) is calculated—known as the expenditure approach—is by adding the expenditures made by those three groups of users. Accordingly, GDP is defined by the following formula:

GDP = Consumption + Investment + Government Spending + Net Exports

or more succinctly as

GDP = C + I + G + NX

where consumption (C) represents private-consumption expenditures by households and nonprofit organizations, investment (I) refers to business expenditures by businesses and home purchases by households, government spending (G) denotes expenditures on goods and services by the government, and net exports (NX) represents a nation’s exports minus its imports.

[ConservativeInPA]

With yesterday's GDP numbers, it is wise to review the calculation of GDP and what it really means to the economy. Two major variables stick out like a sore thumb; G and NX. We know government spending (G) is at an all time high, thus bolstering GDP. Everything else, is significantly down.

If we the GDP to go in the right direction we need reverse the trend in G and NX, plus bolster I. Less G leads to significantly more American businesses, which have greater expenditures and export more goods and services. This is simple to understand. Less government means less regulation thus creating an environment for businesses to prosper.

Sounds like MAGA to me.

[PGR88]

The standard definition of GDP is a crappy one

Government produces nothing. It merely re-allocates consumption or investment that would have been done elsewhere.

OR in the case of our present situation, it merely “prints money” in the form of monetized debt, to steal others resources through debasement.

[Starboard]

Being heavily influenced by political considerations rather than rational economic ones, G often contributes to misallocation of resources, monumental waste, duplication of effort, and malinvestment. Perhaps it should have a negative sign in the calculation. ;).

[Bishop_Malachi]

In theory, government provides (”produces”) services which are needed by at least some segment of the population. That’s why they are allowed to be part of the equation. Now I’ll admit that government services are not constrained by the same efficiency pressures that goods and services produced in the free market are. Goverment gets to take what it wants through taxation (and in the Federal Government’s case, printing and borrowing money) in order to remain solvent. Market institutions have no such luxury and that’s why they are forced to operate by profit motive. Oddly enough the problem can be democracy. Once a large group of people’s incomes and benefits are tied to government, market forces get replaced by political forces...we can see the effects of that on our own economoy now....to the negative.

[ConservativeInPA]

Well put!