Recession Ended June 2009

So how did they cook GDP data, Neubarth?

I have been over this many times. This time I will just say that people should look for their selves. The constituent parts of GDP tabulate spending. Government spending qualifies and can take negative GDP and make it positive in a quarter with just a few billions spend in the right places. Go get the definition of GDP and you will see for yourself.

The government spending money, especially in the unfunded fasion in which they are doing now, gives us false capital input numbers thus artificially inflating the GDP.
 
The fact that government spending is added to GDP is what makes GDP suspect. Government spending should be subtracted from GDP to get a more accurate figure.
 
The way these thing are measured has not changed. The recession is officially over. Go out and buy a house or two.....:lol:

Now just sit back and watch the downward revisions to the GDP roll in.....after November of course!
 
they aren't false numbers.

Your right they are the real numbers, its just those numbers have some government made filler in them which I described ;).

False is the wrong word. They are artificially inflated numbers.

I can't understand the distinction that seems so compelling to a number of others.

GDP has always included government spending, deficit and otherwise as a central part of it's calculation.

Whatever the point is you failed to convey it or convince me.

GDP is what it is:



Definition
Gross Domestic Product. The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

Read more: GDP Definition

I fully agree that is the wrong index to use to track our economic health. I wish there was another index that was more on point.

But we use recessions to define economic downturn and define those recessions according to GDP.
 
So they didn't cook the GDP data?
Actually it is impossible not to cook the books to some degree, the question is whether the cooking was: done with malicious intent, due to incompetence or a reasonably well executed compromise. I tend to lean to well meaning incompetence in both the creation and use of GDP numbers as being the culprit. But Neubarth's argument goes back to the creation of the GDP=C+ (X-M) + I + G equation with C being consumption, X being exports, M being imports, I being net investment and G being government spending. Those aggregate variables hide a load of information.
 
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well I invited him twice to point out that loaded info.

He shrunk away. Mere deficit spending or stimulus doesn't amount to a skewed GDP accounting.
 
So they didn't cook the GDP data?
Actually it is impossible not to cook the books to some degree, the question is whether the cooking was: done with malicious intent, due to incompetence or a reasonably well executed compromise. I tend to lean to well meaning incompetence in both the creation and use of GDP numbers as being the culprit. But Neubarth's argument goes back to the creation of the GDP=C+ (X-M) + I + G equation with C being consumption, X being exports, M being imports, I being net investment and G being government spending. Those aggregate variables hide a load of information.

"Cook" implies wrongdoing. They are statistically sampling.
 
Ended a year ago did it? Tell that to the 40 million on food stamps and the millions of poor dregs without a job much less any hope for a job.
 
So they didn't cook the GDP data?
Actually it is impossible not to cook the books to some degree, the question is whether the cooking was: done with malicious intent, due to incompetence or a reasonably well executed compromise. I tend to lean to well meaning incompetence in both the creation and use of GDP numbers as being the culprit. But Neubarth's argument goes back to the creation of the GDP=C+ (X-M) + I + G equation with C being consumption, X being exports, M being imports, I being net investment and G being government spending. Those aggregate variables hide a load of information.

"Cook" implies wrongdoing. They are statistically sampling.
True but it is impossible to avoid either deliberate error in accounting or reporting with such an unwieldy aggregate.

Hedonics has given the tinhats a huge field to play in. Electric typewriters are in no way comparable to word processors and figuring out the actual value of the newest big thing from Apple, Google, Intel or Microsoft is flat out impossible. However published GDP numbers do just that in inflation adjustments which is wrong accounting and therefore book cooking. This may very well be the best way of doing things but it is knowingly sacrificing Generally Accepted Accounting Principles in hopes of making the published GDP figures more useful to policy makers as at Enron but hopefully without the intentional fraud.

Likewise the depreciation guesstimate in net investment requires a restatement of previous years when inflation and/or innovation changes replacement value but that would require an annual restatement of US GDP for every year going back to 1958 which was the last deflationary year. I seriously doubt that the data from 1979 is in good enough shape to do this much less 20 years earlier.

Yeah, I am being picky but the GDP deflator is based on such errors not existing, which they do. A random error walk can be as low as humanly possible within the available budget for data gathering and still cause the range of possible values to be +100%/-50% of the published numbers in what, 6 years? (I am using +/- 5% for the five components of GDP or 30 years at +/- 1% per component.) That is a huge range of possible outcomes and definitely causes support for CT posts. A more detailed GDP equation and more mention of degree of confidence is desperately needed.
 
Your right they are the real numbers, its just those numbers have some government made filler in them which I described ;).

False is the wrong word. They are artificially inflated numbers.

I can't understand the distinction that seems so compelling to a number of others.

GDP has always included government spending, deficit and otherwise as a central part of it's calculation.

Whatever the point is you failed to convey it or convince me.

GDP is what it is:



Definition
Gross Domestic Product. The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

Read more: GDP Definition

I fully agree that is the wrong index to use to track our economic health. I wish there was another index that was more on point.

But we use recessions to define economic downturn and define those recessions according to GDP.
See the part I made big. The government, by creating huge unfunded spending budgets by adding to the debt has artificially inflated GDP for years...however the accelerated rate of government spending over the last 2 years has had a greater impact on GDP than normal.
 
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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.
 
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.

When GDP data is stated as X +/- Y% it is presumably an attempt to tell the truth as best as is known. GDP data is not stated in a form that can be treated as even an approximation of the truth as far as the publishers can determine it.
 

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