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anybody got a link to this alleged sampling?
Hmmm it's been a few years since I studied the NIPAs (National Income and Products Accounts) that make up the GDP. BEA doesn't collect any data themselves, they get their info from other agencies. Most of the info on private consumption comes from BLS and Census. Government spending and receipts are admin data for Fed gov, not sure about the info for state and local. Import and Export are measured by Commerce department.
Accusations of "cooking the books" are just claims from people who either don't understand or disagree with the definitions and/or methodology. Of course definitions and methodologies are debatable and are debated all the time and changed once someone's argument becomes convincing, but only people who have no idea what they're talking about think there's only one possible correct definition/method for anything.
Nonsense denying limits of error much less the compounding of cumulative error is cooking the books. A flat statement of GDP is X is a deliberate lie intended to mislead.
For all I know he is simply stating what he believes to be true and he does give his reasons for taking a different position. There are also economists who claim systemic overstatement of GDP and defend their reasons for doing so. I consider neither side to be tin hat in this debate. I do consider official statements that X is GDP and if you say different you are wrong to be lying.Nonsense denying limits of error much less the compounding of cumulative error is cooking the books. A flat statement of GDP is X is a deliberate lie intended to mislead.
You really think that Willie? I mean yeah GDP may be a very imperfect stat, but if it is compiled exactly the same way month in and month out what's the rub?
What does John Williams have to say about GDP?
Alternate Gross Domestic Product Chart
He says that the government is understating GDP by about 4%.
For all I know he is simply stating what he believes to be true and he does give his reasons for taking a different position. There are also economists who claim systemic overstatement of GDP and defend their reasons for doing so. I consider neither side to be tin hat in this debate. I do consider official statements that X is GDP and if you say different you are wrong to be lying.Nonsense denying limits of error much less the compounding of cumulative error is cooking the books. A flat statement of GDP is X is a deliberate lie intended to mislead.
You really think that Willie? I mean yeah GDP may be a very imperfect stat, but if it is compiled exactly the same way month in and month out what's the rub?
What does John Williams have to say about GDP?
Alternate Gross Domestic Product Chart
He says that the government is understating GDP by about 4%.
I got an error rate of 5%, Williams gets an error rate of 4%. That he gets a persistent +4% error I attribute to his target market: Fortune 500 executives and bank analysts. Most of the economists that find persistent overstatement error have a target market of union organizers and journalists. There is not much market at this time for making legitimate arguments that the NBER or the Treasury overstates in some years and understates in other years. What these differences do heavily imply is that the various sub-accounts do contain identifiable bias and that the bias is not being corrected or for that matter are even being addressed in a coherent fashion. That's why I say the books are being cooked to keep the salaries and reputations of those doing the accounting high.
All true but having an income statement without a balance sheet which is what GDP is, is curious and the lack of cashflow numbers is unhelpful as well. Just the omission of consumption debt service is enough to make GDP figures nearly worthless as an income statement. There is a very good reason why all three of those documents are required in annual reports it makes fraud or in this case error easier to detect.
All true but having an income statement without a balance sheet which is what GDP is, is curious and the lack of cashflow numbers is unhelpful as well. Just the omission of consumption debt service is enough to make GDP figures nearly worthless as an income statement. There is a very good reason why all three of those documents are required in annual reports it makes fraud or in this case error easier to detect.
All true but having an income statement without a balance sheet which is what GDP is, is curious and the lack of cashflow numbers is unhelpful as well. Just the omission of consumption debt service is enough to make GDP figures nearly worthless as an income statement. There is a very good reason why all three of those documents are required in annual reports it makes fraud or in this case error easier to detect.
all the more reason why it is a pisspoor index to measure the health of our economy.
Thank you a legitimate criticism. I should have spotted the revenue without cost statements problem and didn't.All true but having an income statement without a balance sheet which is what GDP is, is curious and the lack of cashflow numbers is unhelpful as well. Just the omission of consumption debt service is enough to make GDP figures nearly worthless as an income statement. There is a very good reason why all three of those documents are required in annual reports it makes fraud or in this case error easier to detect.
That is a very good point, GDP being an income statement without a balance sheet. However GDP isn't even an income statement, it's a sales report. It doesn't signify income, only revenue. But as long as the methodology is consistent, it is a good indicator of a trend.
Then there is another wrinkle though, that is the effect these economic reports have on the economy in general. Then there is the changing standards for defining a recession in the first place.
All true but having an income statement without a balance sheet which is what GDP is, is curious and the lack of cashflow numbers is unhelpful as well. Just the omission of consumption debt service is enough to make GDP figures nearly worthless as an income statement. There is a very good reason why all three of those documents are required in annual reports it makes fraud or in this case error easier to detect.
all the more reason why it is a pisspoor index to measure the health of our economy.
What is your alternative?
Aggregation of net worth is inaccurate - my house is "worth" less than I owe on it, but the loan on my house is worth every single penny of the amount owed because I have never and will never miss a payment.
All true but having an income statement without a balance sheet which is what GDP is, is curious and the lack of cashflow numbers is unhelpful as well. Just the omission of consumption debt service is enough to make GDP figures nearly worthless as an income statement. There is a very good reason why all three of those documents are required in annual reports it makes fraud or in this case error easier to detect.
It failed to generate significant private sector growth which is more long term. The people who passed it were hoping it would generate a bigger blip and things would be better before this election, but they knew what they were doing would not spawn significant private sector growth. Or if they did not know that, they are fools.
Well maybe. Conventional wisdom says that the economy always grows interupted by short periods of correction. Boom and bust. The ageless natural cycle of economies, like winter/summer.
I think a lot of very smart economists haven't yet come to terms with "this time is different". Krugman for one.
All true but having an income statement without a balance sheet which is what GDP is, is curious and the lack of cashflow numbers is unhelpful as well. Just the omission of consumption debt service is enough to make GDP figures nearly worthless as an income statement. There is a very good reason why all three of those documents are required in annual reports it makes fraud or in this case error easier to detect.
