GDP, median wage and the trade deficit

Discussion in 'Economy' started by Supposn, Jul 26, 2009.

  1. Supposn
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    Supposn Senior Member

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    Many fault GDP because it doesn’t differentiate between spending for whiskey or lap dances rather than life saving drugs or class room instruction. Unfortunately we have not yet devised a statistic superior to the GDP that will objectively describe national production of wealth.

    The ratio of per capita GDP and median wage indicates the extent of that wealth’s distribution among the nation’s population. That is why the GDP and median wage are among, (if not the) nation’s most significant economic statistics.

    There have been numerous instances of increased stock market indices with no relative growth of median wage. In such cases the boost to the economy is always unsustainable. Only when the median wage increases do most other economic and financial indices, (our entire economy) achieves sustainable growth.

    My interest in USA’s global trade deficit is due to its detriment to the GDP. Trade deficit’s detriment to the GDP far exceeds the amount of the deficit itself.

    Respectfully, Supposn
     
  2. Toro
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    Toro Diamond Member

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    One way to reduce the trade deficit is to have a mind-bending recession. Like we're having now. The recession must be a good thing according to the logic in the OP, then.
     
  3. Supposn
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    Supposn Senior Member

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    Excerpted from new topic posted on 27Jul 09, entitled
    "Warren Buffett's concept to (significantly) reduce USA's trade deficit".

    "Warren Buffett co-authored a concept that was the basis of Senators Dorgan and Feingold’s 2006 bill to significantly reduce USA’s trade deficit of goods. Trade deficit’s detriment to the GDP greatly exceeds the amount of the deficit itself. What’s detrimental to the GDP is also generally detrimental to the median wage.

    I urge browsing the paragraph sub-titles within the world wide web site
    of USA-Trade-Deficit.Blogspot.Com .
    and reading those titled paragraphs that catch your interest".

    Excerpted from teh reffered web site:
    "*** Conclusions.

    Buffett’s concept is a restriction upon pure free trade but it is certainly pure free enterprise. The market (rather than government) driven proposal grants government no policy discretion and would certainly decrease USA’s trade deficit.

    It's advantageous to any domestic producer competing with foreign goods within or beyond our borders. It would also induce the aggregate sum of our imports plus exports to increase.

    All of this would significantly increase our GDP which in turn induces increasing median wage. Unlike temporary trillion dollar economic stimulus, this will not increase present and future debts or taxes.

    I'm aware of no existing or proposed trade policy that would accomplish all of this with no net government expense, less government intervention and less increased prices of imported goods”.

    Respectfully, Supposn
     

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