Monday, December 13, 2010

The outrageous and misguided views that people buy into

Certain commentators are running around saying things like, “The US economy (GDP) is a ‘phony’ economy because all we really measure is what we consume.”

That’s right; GDP measures what we consume; but everything that is consumed is also produced. Therefore, consumption and production are one in the same, just as is income and consumption or, income and product.

However, if you said that to those commentators they’d say, “Yes but, the United States doesm't produce anything.”

Another completely ridiculous statement.

When GDP is calculated imports are SUBTRACTED OUT OF THE TOTAL because we are measuring gross DOMESTIC product! And even with imports subtracted the number that is left is $14.8 Trillion! That’s not only a very big number, it's also everything that is consumed (AND PRODUCED) domestically, as in Gross DOMESTIC Product or.

The people who make these crazy statements are people who aren’t interested in the truth. They are people who don’t want YOU to know the truth either. They only want to continue spewing their misguided ideology and dogma.


Mike Sandifer said...

Yeah, US manufacturing output has risen linearly for decades. Automation is responsible for most of the job losses in this sector.

These people are anti-science and anti-empirical drones with economic educations earned by watching CNBC and Fox Business.

And I love those who want to compare The US fiscal situation to that of households, claiming that a public debt ratio of less than 100% is dangerous. I guess they don't realize that most families have mortgages at 3x or more income, along with car loans, credit cards, and student loans, in some cases. Yet, the vast majority of these loans have always been repaid, even now.

Add to that the fact that we have the largest tax base in the world and can use monetary stimulus, and their debt phobia's even more ridiculous.

These people don't even bother to think through their perspectives.

Ugh said...

I'm sorry but when you look at the label on nearly every hard good you buy, say at Walmart and it says Made in China, it's causes the average person to say "gee it seems nothing is made here anymore". This is especially true when you buy something with the logo of a venerable American company on it.

I know a lot of things are made here. America has a huge manufacturing base, but the perception is that we're losing it bit by bit. You can't blame people for being dismayed. Things change and change is hard and people lash out. Maybe the talking heads should know better, but none of you can tell me you haven't felt it too.