there are tons of ways to manipulate data that doesnt go along with your “biden economy is worse ever” narrative.
rapid growth no matter how you slice it.
Allan
That’s true and i love these isolated deep dives but lets play the game then
2018 Q3
https://www.bea.gov/system/files/2019-03/gdp4q18_3rd_1.pdf
GDP - 3.4
Line 40 - 2.33
Line 50 - .44
So out of 3.4 - 2.77 was government growth and changes in private invetories!!!
Line 16 - .13
Line 17 - .54
This is a fun game!
It is pretty standard fare to examine how much of the paper GDP growth was just
- diminished savings rates
- gun to the head forced spending by government, and
- increased inventories
It is sophomore year econ stuff, every business major learned it and it is the red meat many economists have complained about for decades.
Hold a gun to someone’s head.
Force him to pay a subsidy to build EV charging stations so rich people can get their toys cheaper.
Declare “Hey I grew the economy.”
The aspects of what I did that are even remotely inventive is pointing out that much of the (ahem) “growth” in medical spending and housing costs are not meaningful growth.
I am not saying they are inventive or problematic.
I am saying that based on your assessment many positive and high number GDPs can be attacked by boiling down to the minutia.
It does not make you wrong.
These are not minutia.
Decades ago yeah maybe.
These days the government shovels money to the poor, to windmills, to EV charging stations etc. etc. and claims the economy is growing and then counts that a GDP growth.
(You know that $5,000 toilet seats grow the economy 100x more than $50 toilet seats right? )
Imagine a centrally planned economy in the old USSR.
Every time they take a dollar out of the bank and spend it, they can claim “look we grew the economy.” Every time they put a dollar in the bank they are forced to say “I’m sorry Comrade. The economy is shrinking.”
It’s a broken window fallacy, a book=keeping entry, not legit GDP growth.
2 Likes
If these numbers signify minimal growth. Based on me randomly picking a q3 2018 gdp table, when was the growth real?
Yes I get it you said these days and government so I know you are not just picking today but a general time.
So when were the numbers real?
With GDP at 4.9 with unemployment numbers where they are.
What economic factors can we compare during these times as compared to say four years ago then 8 years ago that we can confidently say that those times were booms or if not booms just good times.
It was not minimal
4.26% our of the so-called 4.9% (annualized) GDP growth was just paper entries such as
- families drawing down their savings and
- government spending money
Nothing minimal about that.
2.77 oif the so called 3.2 annullized GDP growth in Q3 2018
When was it correct? or actually high?
-
(minor aside: I checked your numbers against the tables and they did not seem to match. Maybe you’re looking at the wrong table.)
-
To answer your question:
If those numbers are accurate would be roughly the same as happened this time, and yes, I consider it high. -
To help you understand what is happening:
Prior to the 1970s a lot of numbers (GDP etc.) were reported in nominal terms only, (without adjusting for inflation.) For decades a very large subset of economists and political types kept saying “Hey that number is meaningless. You have to adjust for inflation.” Eventually that subset won.
Same deal here.
- In wartime, the government “steals” a billion dollars from the economy and uses it to build a battleship and then declares "look the economy grew by the price of a battle ship.
- Today, Joe Biden “steals” $200b for Chips, and $300b for “Inflation reduction act” and $1.2 trillion for an “infrastructure act” and then declares “I’m a genius. I grew the economy by $200b + $300b + $1.2t. See the economy is rock solid!”
I’ll double check thank you.
I don’t disagree with the rest of your post my question is more about how can we calculate when the economy is acytially good other than feelings. Thats not me being an ass either.
It’s just in any given economy things will be things will be good. The government will spend our money and tell us the economy is growing. (I don’t actually have a problem with that last part).
But what are the actual indicators that truly show us that the economy is strong and that it is not a facade. I have a feeling that they don’t actually exist.
Well right now, we simply report GDP and if one “questionable category” changes a lot that usually gets mentioned in the second paragraph. (Like in the 1950s and 60s with inflation.) That is what should have happened this time.
The headline 4.9% (annualized) GDP growth included
- 1.4% in diminished savings and diminished debt paying
- 0.79% in increased gov’t spending
- etc.
A variety of alternatives to GDP accounting have been proposed (the US used to use GNP, which counts the production of US owned factories overseas and US owned oil wells overseas etc…)
If you simply “Google” the phrase “alternatives to GDP” you will get several lists of several proposals each hoping we will add or subtract imaginary dollars based on the value of ozone destruction, the value of same sex bathrooms etc… (Obviously those are politicized garbage not worth discussion.)
- Austrian economist Murray Rothbard suggested we should simply remove all gov’t spending from the GDP.
2, Austrian economist Mark Skousen wants intermediate goods, such as inventories treated differently.
- I’ve seen other blog-type suggestions that we should treat increases/decreases in private savings accounts the way we treat intermediate goods. (Which makes a lot of sense to me.)
