Religion, Politics and World Events They make great dinner conversation, don't you think? plus Political Film

US GDP is about to get a lot bigger

Old 04-23-13, 09:03 AM
  #1  
DVD Talk Legend
Thread Starter
 
Join Date: Jan 2000
Posts: 16,173
US GDP is about to get a lot bigger

Surprised this one isn't here yet

http://money.msn.com/now/post.aspx?p...a-e5064e018f16


US GDP is about to get a lot bigger

The economy will grow by 3% in July because of a shift in how the government measures output, especially of intangible assets.
By Bruce Kennedy 20 hours ago


Starting in July, the U.S. gross domestic product will officially jump by 3%. The change isn't due to some miraculous economic event but rather from a shift in the way the government looks at statistics in the digital age.


Brent Moulton, an associate director at the Commerce Department's Bureau of Economic Analysis, says the revised benchmark economic number will take into account billions of dollars in intangible assets that have previously been left out.

"We’re capitalizing research and development," Moulton told the Financial Times, "and also this category referred to as entertainment, literary and artistic originals, which would be things like motion picture originals, long-lasting television programs, books and sound recordings."


For example, according to the FT, the output of iPads produced by Apple (AAPL +0.40%) is currently included in GDP, but the R&D needed to create those iPads isn't. With the changeover this summer, R&D will now be considered an investment and will add to the overall measured size of the economy.


Shortfalls in defined-benefit pension plans will also be reevaluated. "We will now show a liability for underfunded plans, which particularly has large ramifications for the government sector," said Moulton, "where both at the state level and the federal level we have large underfunded plan."


The revisions will make the U.S. one of the first countries to adopt a new international standard for tallying up GDP figures.


Other BEA officials say the changes aren't expected to alter views of economic trends and cycles over the past several years -- but they're not sure how the revised data and methodology will affect the future.


"We are carrying these major changes all the way back in time -- which for us means to 1929," Moulton told the FT, "so we are essentially rewriting economic history."


The new accounting will apparently add the equivalent of a country the size of Belgium to the international economy. And it might also, according to Management Today, prompt other countries to follow Washington's lead because "the U.S. provides the de facto standard for GDP measurement around the globe."

Perhaps I have missed something and one of the resident geniuses here can explain to me why this is necessary?

In the iPad example cited in the article, R&D costs are already recovered in the sale of the item (business always prices to recover R&D, otherwise they fail), so why do we need to count R&D twice?

Seems like a way to just confuse the general public on the GDP numbers.

"Strategery"
4KRG is offline  
Old 04-23-13, 10:02 AM
  #2  
DVD Talk Limited Edition
 
Join Date: May 2001
Location: Nashville TN
Posts: 7,318
Re: US GDP is about to get a lot bigger

It's no different how unemployment numbers are cooked up now. it's going down not because of the economy getting better but because actual jobs are gone, people leaving the workforce, given up are taking part-time work. Using the same data, job figures and sources from 4yrs ago today the actual unemployment would be closer to 11%+.

I'm sure by summer the economy outlook according to the medai will be bright and getting better...just like they've said the last four years. It's like when the get on the tube and are just giddy gas prices are falling to a low of 3.45 a gallon....never mentioning at all that four years ago it was closer to $2.50. Welcome to the new norm.
K&AJones is offline  
Old 04-23-13, 10:55 AM
  #3  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,676
Re: US GDP is about to get a lot bigger

Originally Posted by 4KRG View Post
Seems like a way to just confuse the general public on the GDP numbers.
The higher the GDP, the lower the deficit/debt appears as a percentage of it. And people are pushing to lower government spending back to a more traditional percentage of GDP. How do you do that without cutting spending?
X is offline  
Old 04-23-13, 12:55 PM
  #4  
DVD Talk Legend
 
Nick Danger's Avatar
 
Join Date: Mar 2001
Location: Albuquerque
Posts: 21,563
Re: US GDP is about to get a lot bigger

Opened this thread to make an assertion, but X already made it in the second response.
Nick Danger is offline  
Old 04-23-13, 01:04 PM
  #5  
DVD Talk God
 
kvrdave's Avatar
 
Join Date: Aug 1999
Location: Pacific NW
Posts: 86,200
Re: US GDP is about to get a lot bigger

Nice to see they are at least going to count underfunded pensions. Sorry California.
kvrdave is offline  
Old 04-23-13, 10:18 PM
  #6  
DVD Talk Ultimate Edition
 
BKenn01's Avatar
 
Join Date: Jun 2005
Location: Big Blue Nation!
Posts: 4,497
Re: US GDP is about to get a lot bigger

Originally Posted by X View Post
The higher the GDP, the lower the deficit/debt appears as a percentage of it. And people are pushing to lower government spending back to a more traditional percentage of GDP. How do you do that without cutting spending?
Rearranging the deck chairs on the Titanic......
BKenn01 is offline  
Old 04-25-13, 09:26 AM
  #7  
DVD Talk Legend
 
Join Date: Jun 2000
Location: NYC
Posts: 17,018
Re: US GDP is about to get a lot bigger

If only there were some way to get all the Republicans in one thread...
Breakfast with Girls is offline  
Old 04-25-13, 10:39 AM
  #8  
DVD Talk Legend
Thread Starter
 
Join Date: Jan 2000
Posts: 16,173
Re: US GDP is about to get a lot bigger

I do find it interesting that no Obama supporters have come in here to try and explain this bullshit


This looks like the best explanation so far

Originally Posted by X View Post
The higher the GDP, the lower the deficit/debt appears as a percentage of it. And people are pushing to lower government spending back to a more traditional percentage of GDP. How do you do that without cutting spending?
4KRG is offline  
Old 04-25-13, 10:52 AM
  #9  
drc
Senior Member
 
Join Date: Oct 2001
Location: Illinois
Posts: 949
Re: US GDP is about to get a lot bigger

Are we supposed to keep the same method of calculating GDP until the end of time? If the calculation is somehow antiquated for the modern economy, are we never allowed to change it? I don't see what the big deal is.
drc is offline  
Old 04-25-13, 10:59 AM
  #10  
DVD Talk God
 
kvrdave's Avatar
 
Join Date: Aug 1999
Location: Pacific NW
Posts: 86,200
Re: US GDP is about to get a lot bigger

It is similar to tweaking the unemployment numbers. It is done to make it appear as though unemployment is not as bad as it really is. This looks like it will essentially do the same.
kvrdave is offline  
Old 04-25-13, 11:02 AM
  #11  
DVD Talk Hero
 
Join Date: Feb 2000
Location: Rosemount, MN
Posts: 30,063
Re: US GDP is about to get a lot bigger

Originally Posted by 4KRG View Post
I do find it interesting that no Obama supporters have come in here to try and explain this bullshit
I don't. Doesn't really seem like anyone is interested in a discussion. You obviously have it all figured out anyway.
Draven is offline  
Old 04-25-13, 11:19 AM
  #12  
DVD Talk Legend
Thread Starter
 
Join Date: Jan 2000
Posts: 16,173
Re: US GDP is about to get a lot bigger

yep, simply more Obama smoke and mirrors, glad you agree

/close thread
4KRG is offline  
Old 04-25-13, 11:30 AM
  #13  
DVD Talk God
 
kvrdave's Avatar
 
Join Date: Aug 1999
Location: Pacific NW
Posts: 86,200
Re: US GDP is about to get a lot bigger

I don't know how much you can put on Obama. I can't think of any president who would be happy with the inclusion of underfunded pensions, etc. Maybe that was the compromise, or maybe there was demand for that, and so they included it with fluffy good stuff for their numbers. I don't know.
kvrdave is offline  
Old 04-25-13, 11:52 AM
  #14  
DVD Talk Hero
 
Join Date: Feb 2000
Location: Rosemount, MN
Posts: 30,063
Re: US GDP is about to get a lot bigger

Originally Posted by 4KRG View Post
yep, simply more Obama smoke and mirrors, glad you agree

/close thread
The reason I don't engage is simple: I don't know enough about the topic to offer any defense to it.

But I also know that there are plenty of smart people on both sides of these issues and I don't think many of them make these decisions to be evil or deceitful. I'm sure they have reasons that make sense to them.

Because I don't feel like becoming a financial expert today, I'm not ready to try to work those reasons out. And the direction of the thread seems to be "Obama sucks and here's proof" so what's the point of wading into that?
Draven is offline  
Old 04-25-13, 12:04 PM
  #15  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,676
Re: US GDP is about to get a lot bigger

It appears the reasoning for the change in GDP definition may be worse than we even imagined in this thread...

In the 21st century, however, GDP accounts are in some ways wanting. Driven by concern for the environment, some economists are reconsidering the productive power of land -- or nature. Echoing Petty’s discovery about the value of labor, a 1997 study by professor Robert Costanza estimated that nature provides goods and services worth trillions of dollars annually to the world economy.

Current GDP measures only account for legal transactions in the money economy, not stocks of wealth or unpaid work. Rainforests felled for timber boost GDP, but an intact rainforest counts for nothing, despite the work it does absorbing carbon dioxide and sustaining the water cycle. We are beginning to feel the costs of such omissions.

In 2012, the United Nations adopted a new international standard to give “natural capital” equal status to GDP. Just as GDP emerged during the 1930s in response to great crises, so alternate measures are now being developed in response to the environmental crisis. Deciding what to include in national accounts by definition requires some judgment calls. So take the latest GDP figure for what it is: a human construct, not a comprehensive -- or fully objective -- measurement.

http://www.bloomberg.com/news/2013-0...d-results.html
X is offline  
Old 04-25-13, 12:08 PM
  #16  
DVD Talk God
 
kvrdave's Avatar
 
Join Date: Aug 1999
Location: Pacific NW
Posts: 86,200
Re: US GDP is about to get a lot bigger



Fucking hippies.
kvrdave is offline  
Old 04-28-13, 04:52 PM
  #17  
DVD Talk Godfather
 
DVD Polizei's Avatar
 
Join Date: Jan 2002
Posts: 51,938
Re: US GDP is about to get a lot bigger

Originally Posted by K&AJones View Post
It's no different how unemployment numbers are cooked up now. it's going down not because of the economy getting better but because actual jobs are gone, people leaving the workforce, given up are taking part-time work. Using the same data, job figures and sources from 4yrs ago today the actual unemployment would be closer to 11%+.

I'm sure by summer the economy outlook according to the medai will be bright and getting better...just like they've said the last four years. It's like when the get on the tube and are just giddy gas prices are falling to a low of 3.45 a gallon....never mentioning at all that four years ago it was closer to $2.50. Welcome to the new norm.
+1. These guys are more cyclical in their patterns than my washing machine.
DVD Polizei is offline  
Old 04-28-13, 07:12 PM
  #18  
DVD Talk Ultimate Edition
 
BKenn01's Avatar
 
Join Date: Jun 2005
Location: Big Blue Nation!
Posts: 4,497
Re: US GDP is about to get a lot bigger

Originally Posted by Draven View Post
The reason I don't engage is simple: I don't know enough about the topic to offer any defense to it.

But I also know that there are plenty of smart people on both sides of these issues and I don't think many of them make these decisions to be evil or deceitful. I'm sure they have reasons that make sense to them.

Because I don't feel like becoming a financial expert today, I'm not ready to try to work those reasons out. And the direction of the thread seems to be "Obama sucks and here's proof" so what's the point of wading into that?
I thought that had already been established.....
BKenn01 is offline  
Old 04-28-13, 08:04 PM
  #19  
DVD Talk Legend
 
Dr Mabuse's Avatar
 
Join Date: Jun 2007
Location: 75 clicks above the Do Lung bridge...
Posts: 18,950
Re: US GDP is about to get a lot bigger

This is nothing new or particularly notable. For the last 3+ decades the definition of terms in the 'official' economic reporting from the government have been changed in many ways so politicians can lie to the public about how 'great' we are doing, or maybe better said hide how bad we are doing, so they can get re-elected, make speeches, and cover up the ways the wealthy are literally wrecking the US and its economy.

When I have posted about the facts of such here for the last few years, that the 'official' numbers are made up nonsense, the responses generally range from rationalizing(like a post or two in this thread, what a surprise) at best, to the majority of people who are completely ignorant and think I'm posting about 'conspiracy theories' or some stupid crap like that.

This isn't an 'Obama' thing btw, if that's the best one can make of it. It's a 'the last 30+ years across the the political spectrum' thing.

I got similar reactions a few years back when I posted that the super rich pay less than half the tax rate of the average working class person. Rationalized to outright denial and claims of 'it couldn't be true'. Until it was documented widely in the last presidential election, then people started coming up with new lines of BS to not face the obvious truth of how rigged the game is in this country.

We have such a well-informed populace...

Dr Mabuse is offline  
Old 04-28-13, 08:12 PM
  #20  
DVD Talk Hero
 
JasonF's Avatar
 
Join Date: Jul 2001
Location: Washington, DC
Posts: 39,071
Re: US GDP is about to get a lot bigger

Originally Posted by 4KRG View Post
I do find it interesting that no Obama supporters have come in here to try and explain this bullshit
Given how thoughtful and open to discussion you and the rest of the conservatives around here usually are, I share your surprise.
JasonF is offline  
Old 04-28-13, 08:39 PM
  #21  
DVD Talk Godfather
 
DVD Polizei's Avatar
 
Join Date: Jan 2002
Posts: 51,938
Re: US GDP is about to get a lot bigger

One of the few times I agree with Dr Mabuse.

In addition, the US is basically lying to as many people as who will believe it. As long as the majority believe it, then regardless if it's a lie...it's a working policy. However, once China calls the US on their bullshit and wants a lot more interest on their loans to us, we'll see how the US Government responds.
DVD Polizei is offline  
Old 04-28-13, 09:20 PM
  #22  
DVD Talk Legend
 
PhantomStranger's Avatar
 
Join Date: Feb 2007
Location: The Phantom Zone
Posts: 20,852
Re: US GDP is about to get a lot bigger

If you repeat a lie long enough, it becomes truth. Most of the economic statistics promoted by the Federal government in recent decades are little more than tools to pacify portions of the population.
PhantomStranger is offline  
Old 04-28-13, 09:21 PM
  #23  
DVD Talk Ultimate Edition
 
BKenn01's Avatar
 
Join Date: Jun 2005
Location: Big Blue Nation!
Posts: 4,497
Re: US GDP is about to get a lot bigger

Originally Posted by 4KRG View Post
I do find it interesting that no Obama supporters have come in here to try and explain this bullshit


This looks like the best explanation so far
That's because its kind of like what Obamacare is becoming "Indefensible". This is exactly what it is, cooking the books. To be fair he isn't the first to do it and wont be the last.
BKenn01 is offline  
Old 04-28-13, 09:46 PM
  #24  
Banned
 
Join Date: Apr 2011
Location: Cambridge, Ontario
Posts: 116
Re: US GDP is about to get a lot bigger

Originally Posted by DVD Polizei View Post
One of the few times I agree with Dr Mabuse.

In addition, the US is basically lying to as many people as who will believe it. As long as the majority believe it, then regardless if it's a lie...it's a working policy.
I don't think most of us believe it. I know I don't believe very much of anything the government says.

I just know there's absolutely nothing I can do about it.
darkblue is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Thread Tools
Search this Thread

Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.