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Nickelless
Administrator
USA
5580 Posts |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
 Posted - 10/30/2009 : 06:25:31
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cash for clunkers, etc.
will not last.
did you know that government expenditures are included in GDP regardless of any benefit they create? |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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Nickelless
Administrator
USA
5580 Posts |
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El Dee
Penny Hoarding Member
USA
547 Posts |
Posted - 10/30/2009 : 09:38:20
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"Clunkers" pumped up GDP by pulling future sales into 3rd quarter GDP.
Without it, watch 4th quarter GDP go back down to 0% or even negative. |
Trust the government? Ask an Indian. |
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vrbsroma
Penny Collector Member
394 Posts |
Posted - 10/30/2009 : 12:00:14
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Thanks to government accounting practices, the GDP and CPI are no longer an accurate measures of, well... anything! They're completely artificially inflated numbers. But, then again, you could say that for any accounting system if you know how to manipulate it. Context matters most, so if you can't explain it, then it may not be so.
Inflation, on the same token, is artificially deflated, which makes TIPS a shoddy investment vehicle, and denies fair cost-of-living salary increases. |
As far as I know, it is stated "In God We Trust" on the US dollar. How can I trust this currency if I do not believe in God?
Possession is nine-tenths of the law.
When I give my two cents, they're always copper! |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 10/30/2009 : 12:55:57
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quote:
Originally posted by El Dee
"Clunkers" pumped up GDP by pulling future sales into 3rd quarter GDP.
Without it, watch 4th quarter GDP go back down to 0% or even negative.
another sound insight. give this man a cigar. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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keys
Penny Collector Member
383 Posts |
Posted - 10/31/2009 : 08:29:04
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Remember how the CPI was adjusted to reflect hedonic changes to consumers spending habits? (the e-CON-omists substituted hamburger for steak since fewer were buying steak, not because steak fell out of favor but because it was getting too expensive.)
Now the CPI is as stretchable as a rubber band. It must be nice to have a yardstick that can stretch as far as a mile. |
I change with the times-
but like silver coins found in your change
I stay the same.
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The United States of America started out as the new Republic of Rome.
Will The United States of America end up as the New Imperial Rome? |
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keys
Penny Collector Member
383 Posts |
Posted - 10/31/2009 : 19:24:33
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The GDP examined from another point of view-
You must be logged in to see this link.
A Look Behind GDP
By Kevin Brekke
Yesterday the Bureau of Economic Analysis (BEA) released the advance GDP numbers for 3Q09, and they showed the economy grew at an estimated annual rate of 3.5%. But, like the saying goes about drowning in a lake with an average depth of three feet, it’s what lies beneath the surface that requires our attention. And so it is with GDP announcements. I took a look at the full report and charts, and here’s what they reveal:
Motor vehicle output added 1.66 percentage points to the Q3 change in real GDP. The report concedes that the jump in output is the result of the Cash for Clunkers program. For the previous quarter, motor vehicle output added just 0.19 percentage points to the second-quarter GDP change.
The change in non-farm inventories added 0.91 percentage points to the third-quarter change in real GDP, the largest amount since 4Q05. This figure is way above the historical Q3 trend for inventory change, and reflects inventory replenishing after the last three consecutive quarters saw hefty declines.
Personal consumption expenditures added 2.36 percentage points to the Q3 change in real GDP.
Personal consumption expenditures increased 3.4% from the prior quarter.
Personal income (wages and salaries) declined slightly from the prior quarter.
The first two items above are one-offs and will not likely be repeated next quarter.
Just for fun, let’s see what the number would have been without these extraordinary events.
Reducing the 3.5% advance GDP number by the approximately 1.47% artificial boost from the Clunkers scheme (1.66% - 0.19%), and 0.66% for inventory build-up (third-quarter trend is roughly 0.25%), gives us a rounded figure of 1.4%.
But wait, the BEA shows in another impressive chart that the average revision from the advance GDP (what was just reported) to the final (what will be reported in two months) is ±1.3%. So the “un-juiced” number we just calculated is almost within the margin for error. One guess not subject to error is that 4Q09 GDP, unless Washington rolls out some other spending-inducing programs, is almost certain to be far lower.
The personal consumption figure indicates that consumer spending accounted for 67% of GDP – down from the bubble years’ high of 70%, but still lofty nonetheless.
How are consumers maintaining their spending in the face of high unemployment? Look at the last two items above: Personal consumption climbed while personal income fell. The only way to fill that gap is to borrow – more debt. Old habits do indeed seem hard to kick.
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More debt=more credit card usage, more pawning of valuables and tools to make ends meet, more eBay selling. |
I change with the times-
but like silver coins found in your change
I stay the same.
*****************
The United States of America started out as the new Republic of Rome.
Will The United States of America end up as the New Imperial Rome? |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 10/31/2009 : 23:10:29
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quote:
Originally posted by keys
Remember how the CPI was adjusted to reflect hedonic changes to consumers spending habits? (the e-CON-omists substituted hamburger for steak since fewer were buying steak, not because steak fell out of favor but because it was getting too expensive.)
Now the CPI is as stretchable as a rubber band. It must be nice to have a yardstick that can stretch as far as a mile.
Just wait until we're all eating Soylent Green, the "GDP" will be through the roof! 
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Meltdown 101: Why did GDP rise – and will it last?
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