Trade deficits are ALWAYS detrimental to their nations’ GDPs.

[itfitzme]

Since 2003, consumption has fallen.

You might need a different chart to show that's the case.

Yeah, that one doesn't really do the trick.

i was going with this one.

% GDP is a good proxy for real dollars per capita. GDP increases with population so it takes that out. And $/$ gets rid of the nominal dollar issue.

The fact that employment and the labor force has trended down since about 2000 is the underlying issue. Not only has real income declined, but even more so, employment has declined as well. It suggests there was a serious change in about 2000.

So far as I can tell, the major fundamental change is apparent in gasoline prices which went from flat to trending upward in about 2000.

Do you have a source for those numbers?
I've always heard consumption was at least 70% of GDP.

You are right. I didn't like it either. And, I don't like the the %GDP approach anyways. It could be simply that other components went up. It's a ratio issue. So I went after it as straight up GDP(2005) per capita.

The decline in consumer spending isn't as drastic as the %GDP suggests. There is another reason that %GDP can decline, because something else went up.

When we look at GDP(2005)-Consumption on a per capita, per civilian population, and per worker basis, it looks like this;

Consumption did begin to decelerate in the 2001 time frame, for per worker and civilian population. Curiously, for per capita, it didn't begin to decelerate until 2005. That deserves some explaination.

So, at least, the deceleration in the 2001 time frame is consistent with the declining real income across all quintiles.

And, I suppose, that's okay. It's not important that real incomes had declined across the board and per worker consumption has only slowed down.

 

[Widdekind]

What percentage of the total net trade deficit has gone into financing the national debt and what percentage of the national debt has been financed by foreign investments in t-bills?

through 2011, the cumulative trade deficit, for the US, has reached $8.5T (raw nominal dollars) -- exactly equalling total foreign held debt ("total credit market assets held by foreigners, excluding corporate equity"), against the US. Of that $8.5T, $5T is US federal government debt. In terms of national income accounting flows (C+I+G+NX = C+S+T), USD are flowing abroad for net imports (trade deficit, -NX); and then flowing back in as loans ("substitute taxes") financing government (budget deficit, G-T).

Some of those USD may return, too, for buying US assets (business stock equities), outside of GDP accounting, for only new final goods & services. $6T of US corporate equities are not held by "households & non-profit organizations"; some fraction of the same could be held by foreigners.

 

[Widdekind]

employment and the labor force has trended down since about 2000.

Employment, as a percentage of population, has only declined, due to recessions; the "Great Recession" of 2008 had a huge impact, from which the US economy has not yet recovered:

 

[EdwardBaiamonte]

Since 2003, consumption has fallen.

"NPD DisplaySearch says that 3D should see a whopping 90 percent increase this year, for a total of 46 million units. The report does expect North America to be the leading 3D shipment region by 2014, with 3D becoming a standard feature on screen sizes above 40 inches"

"In 2011, U.S. airlines carried 16% more traffic than in 2000 while using 2.3 billion fewer ... In 2011, US airlines flew at 241.2 billion revenue passenger miles in

"Nearly 110 million people in the U.S. owned smartphones during the three months ending in May, up 5 percent versus February. Google Android ranked as the top smartphone platform with 50.9 percent market share (up 0.8 percentage points). Five years after the release of the first iPhone, Apple’s share of the smartphone market reached 31.9 percent in May"

Keep going. After you've listed all tens of thousands of products on the US market, included both quantity and price indexes, you will have duplicated the GDP.

Come back when you're done and we can discuss macro-economics instead of micro-economics.

So does that mean that ever higher consumption of 3D TVs, smart phones, and airline flights is a sign that we are consuming less, not more???

If all those things were being consumed less would that mean we were actually consuming more?

 

[Rshermr]

"NPD DisplaySearch says that 3D should see a whopping 90 percent increase this year, for a total of 46 million units. The report does expect North America to be the leading 3D shipment region by 2014, with 3D becoming a standard feature on screen sizes above 40 inches"

"In 2011, U.S. airlines carried 16% more traffic than in 2000 while using 2.3 billion fewer ... In 2011, US airlines flew at 241.2 billion revenue passenger miles in

"Nearly 110 million people in the U.S. owned smartphones during the three months ending in May, up 5 percent versus February. Google Android ranked as the top smartphone platform with 50.9 percent market share (up 0.8 percentage points). Five years after the release of the first iPhone, Apple’s share of the smartphone market reached 31.9 percent in May"

Keep going. After you've listed all tens of thousands of products on the US market, included both quantity and price indexes, you will have duplicated the GDP.

Come back when you're done and we can discuss macro-economics instead of micro-economics.

So does that mean that ever higher consumption of 3D TVs, smart phones, and airline flights is a sign that we are consuming less, not more???

If all those things were being consumed less would that mean we were actually consuming more?

Ed, it simply means that you are a tea party dogma slinger who does not have the mental capacity to understand that listing a few consumables makes any point at all. You are making a fool of yourself (actually, that may be incorrect. Not sure a fool can make himself a fool. Somehow seems redundant).

 

[itfitzme]

employment and the labor force has trended down since about 2000.

Employment, as a percentage of population, has only declined, due to recessions; the "Great Recession" of 2008 had a huge impact, from which the US economy has not yet recovered:

Surely you can see that the long term trend, since 2000, has continued downward, never reaching the 2000 level, even though it began to in about 2003. And, sure, from '05 to '06 the employment ratio trended positive, but it was a half decade away from ever reaching the 2000 level, if in fact, it was really headed that way.

More significantly, look at the labor force ratio. It also maxes out at 2000, then begins a downward trend. The LF barely increased from '05 to '06.

Labor Force and Employment as a percentage of Civilian Population;

I know it is a bit weak, but if you extend the 2000 to 2004/05 trends for LF and employment ratio, the current levels is where that trend was going. But still, you can't not notice that before 2000, the long trend was up, then after 2000, it was down. (Really, don't make me have to draw arrows and re-upload the thing.)

Lets face it, the '05 to '06 employment increase was on the whole housing bubble industry, a "recovery" that was "artificial". I think everyone agrees it was a bit artificial. Take that housing bubble and the employment that resulted from it and the trend is downward.

Then, when we look at a number of different economic performance indicators and they all show this curious shift in about 2000 to 2003. Gas prices, consumer credit, government spending all shift in 2000. (I posted these in some other thread). Also, the shift in age group makeup of the LF began in 2000, with the under 25 year age group declining with each seasonal cycle and the over 55 group increasing.

The income quintiles are one of them with all quintiles beginning to trend downward since about 2000. (I posted this earlier in the thread.)

The income is per household, not personal. So it may be that the decline in income is due to the shift in labor force. Each household now supports more individuals, clearly.

That alone necessitates a decline in consumption. Less money, less consumption. And consumption began to decelerate in about 2000. (I'm working of differentiating the components. It will be interesting to see what has declined the most. Is it goods? Is it services?)

Then, there are others that began to shift trend a bit before and after 2000. The housing bubble is once of them. It began in about '03. I suggest it was solely responsible for the small "recovery" in employment ratio that we saw in '03 to '06.

I'm trying to see if I can make anything out of NX/worker. It's not so clear if something can be made out of it. It really started to trend in about '97, hesitating in 2000, then continuing downward to a peak in Sept-'06.

NX always falls back before a recession. In just NX terms, that is clear. It is really curious that NX/worker picked back up again from Dec-'07 to Sept-'08 then fell back massively to Jun-'09. I can't figure out what to make of that.

The NX/Worker thing doesn't present a clearly definitive shift in 2000. But then, we are lucky if any particular indicator shows a definitive shift. Two is just a coincidence.

When three, four, even five line up, along with some that lead and others that lag a bit, it seems to indicate something going on. That NX/worker led 2000 a bit, by about three years, may be just a leading indication of the overall process.

 

[Widdekind]

employment and the labor force has trended down since about 2000.

Employment, as a percentage of population, has only declined, due to recessions; the "Great Recession" of 2008 had a huge impact, from which the US economy has not yet recovered:

Surely you can see that the long term trend, since 2000, has continued downward, never reaching the 2000 level, even though it began to in about 2003. And, sure, from '05 to '06 the employment ratio trended positive, but it was a half decade away from ever reaching the 2000 level, if in fact, it was really headed that way.

the 2008 recession cut short the recovery, under Pres. Bush; the US economy, impacted by 2001 & 2008, has yet to regain lost ground. But the effects of specific recessions cannot be attributed to the economy, in general.

 

[itfitzme]

Employment, as a percentage of population, has only declined, due to recessions; the "Great Recession" of 2008 had a huge impact, from which the US economy has not yet recovered:

Surely you can see that the long term trend, since 2000, has continued downward, never reaching the 2000 level, even though it began to in about 2003. And, sure, from '05 to '06 the employment ratio trended positive, but it was a half decade away from ever reaching the 2000 level, if in fact, it was really headed that way.

the 2008 recession cut short the recovery, under Pres. Bush; the US economy, impacted by 2001 & 2008, has yet to regain lost ground. But the effects of specific recessions cannot be attributed to the economy, in general.

That is pure supposition. The reality is that it didn't recover. The reality is that the economy was trending upward before 2000, broken up by specific business cycles and then it trended downward, broken up by a business cycle.

We can either follow the peaks up then down, or the troughs up then down, which ever.

On the way up, the troughs and peaks are higher then the previous troughs and peaks. On the way down, the trough and peak is lower then the previous trough and peak.

Either way, it was trending down before the housing bubble and ended even further down after the housing bubble.

"has yet to regain lost ground" is pure speculation. It didn't, period.

I would have gotten to work, but I ran out of gas. But I was going to get gas and I would have made it to work, but I ran out of gas. The reality is, I didn't get gas, I ran out, and I didn't get to work.

We can't interspers a description of what happened with suppositions of what might have happened if only what happened hadn't happened.

 

[Widdekind]

The raw ratio of "employment level (plus continuing unemployment claims)" to "total population" has risen since the 1960s, stabilizing near 50%, and only dipping a few points in 2008:

 

[itfitzme]

The raw ratio of "employment level (plus continuing unemployment claims)" to "total population" has risen since the 1960s, stabilizing near 50%, and only dipping a few points in 2008:

What is it without the continuing unemployment claims?

 

[EdwardBaiamonte]

Well, clearly, we were purchasing too much in 2003. Good thing our consumption has fallen off to pre-2003 levels.

Moron

"In 2011, U.S. airlines carried 16% more traffic than in 2000 while using 2.3 billion fewer ... In 2011, US airlines flew at 241.2 billion revenue passenger miles in "...

yep, pretty soon we'll be closing the airports because Republican policies have been screwing the middle class just like the Marxists say.

you don't get very far being a perceptual geek but a conceptual moron do you??

Meaningless hyperbole using a point industry.

you mean the point industry that caused a huge explosion in TV's, smart phones, and airline travel is a sign that the middle class is disappearing as the Marxist liberals would hope?


Maybe they are getting the money from their food budget? But wait, American are fatter than ever??

 

[itfitzme]

"In 2011, U.S. airlines carried 16% more traffic than in 2000 while using 2.3 billion fewer ... In 2011, US airlines flew at 241.2 billion revenue passenger miles in "...

yep, pretty soon we'll be closing the airports because Republican policies have been screwing the middle class just like the Marxists say.

you don't get very far being a perceptual geek but a conceptual moron do you??

Meaningless hyperbole using a point industry.

you mean the point industry that caused a huge explosion in TV's, smart phones, and airline travel is a sign that the middle class is disappearing as the Marxist liberals would hope?


Maybe they are getting the money from their food budget? But wait, American are fatter than ever??

This is a perfect example of what an idiot you are.

First off, I have never said anything about Marxism or liberals. I have no interest in what the "liberals" or "Marixists" would hope.

Second, I have never said anything about the disappearing middle class. All I presented was the US Census household income data, noting that it has a) begun to deline since 2000 b) that the spread has become more skewed over time, c) that this skew is apparent in that house hold incomes fall less and gain more ground for the higher quintiles d) that, interestingly enough, the lowest quintile has seen a bit higher gain then the second quintile.

You seriously need to get some medical help.

 

[EdwardBaiamonte]

First off, I have never said anything about Marxism or liberals. I have no interest in what the "liberals" or "Marixists" would hope.

too stupid; in the beginning you presented yourself as an impartial economic scientist. When that didn't work you debated as a open liberal. Now yu're back to pretending you're objective with no interest???? Joke??

Second, I have never said anything about the disappearing middle class. All I presented was the US Census household income data, noting that it has a) begun to deline since 2000

how odd, that is the basic liberal theme too!!!

b) that the spread has become more skewed over time, c) that this skew is apparent in that house hold incomes fall less and gain more ground for the higher quintiles d) that, interestingly enough, the lowest quintile has seen a bit higher gain then the second quintile.

and i pointed that most middle class Americans are now buying tons of new stuff that they could never afford like smart phones, 3D TVs, airline tickets, and food.

Plus the quintiles are always changing so as to make comparisons meaningless. For example, we have had a explosion of poor single mothers forming a new bottom quintile thanks to liberal programs and at the same time we have had a explosions of 2 income families with both adults having MA's or Phd's and so big combined upper quintile incomes.
And, we have had many liberal programs driving middle class jobs off shore!!

Welcome to Econ 101, liberal!!


You seriously need to get some medical help.[/QUOTE]

 

[Widdekind]

The raw ratio of "employment level (plus continuing unemployment claims)" to "total population" has risen since the 1960s, stabilizing near 50%, and only dipping a few points in 2008:

What is it without the continuing unemployment claims?

solid blue line (UE) vs. dashed blue line (UE+claims); the difference has been consistently about 1%

 

[itfitzme]

The raw ratio of "employment level (plus continuing unemployment claims)" to "total population" has risen since the 1960s, stabilizing near 50%, and only dipping a few points in 2008:

What is it without the continuing unemployment claims?

solid blue line (UE) vs. dashed blue line (UE+claims); the difference has been consistently about 1%

That's what I thought. The consistency of 1% is interesting.

More curious is that is it a bit different then the BLS CPS data which is [employment level]/[civilian non-institutionalized population].

Why would the Fed data come out significantly different? What population data are they using?

 

[Widdekind]

Why would the Fed data come out significantly different? What population data are they using?

The more volatile ratio divides by a smaller number, not the whole population, but only the "working age" population 15+. Less misleading would be "employment-to-working-age-population-ratio":

The employment-to-population ratio is defined as the proportion of an economy’s working-age population that is employed... For most economies, the working-age population is defined as persons aged 15 years and older

The WA population represents "every able-bodied potential worker" in society. Assembling all the stats:

total population = WA population + kids
= (labor force + not in labor force) + kids
= ([employed + unemployed] + not in labor force) + kids
= working + looking + drinking + kids​

UE are those of working age, who are "in the labor force", which means actively wanting work. They're banging on business' doors, asking for jobs, but w/o success. Crudely, "not in the labor force" means "lazy lay-abouts (on welfare)" (trying to keep things simple & plain).

Conceptually crucial are "levels" (thousands of persons) and "rates" (%). For example,

E (thousands) = working
UE (thousands) = looking

UE (%) = looking / (working + looking)
= UE / (E + UE)
= UE / L​

UE rates relate the total supply of labor (L) offered to businesses, to the amount of labor offered but not hired (UE). UE reflects the ratio of demand to supply of labor. So, UE reflects the going wage for labor -- when the UE rate increases, businesses are refusing more of their applicants; businesses are being "choosier"; labor is relatively abundant; labor is over-supplied relative to demand; wages fall. Lower wages means less consumption, less spending, lower GDP (Okun's Law).

The UE (%) is actually a better predictor of real GDP than raw E (thousands). Sometimes, the E level can rise, whilst the E rate falls (UE rate rises). When mathematical push comes to statistical shove, rising UE rates (falling E rates) "win", and outputs fall, even though the E level rose slightly. Businesses did hire a few new people; but businesses were swamped with applicants they couldn't hire; L was over-supplied relative to demand; businesses could make more demands; wages & spending fell.

In the 1960s, rising UE rates correlated to falling outputs 3:1 (+1% UE ---> -3% real GDP). In the 2000s, that correlation weakened to 2:1 (+1% UE ---> -2% real GDP). Today, welfare pumps money into the public's pockets, even without being hired & working. When UE rates rise, wages fall, as before. But spending is boosted by "free government welfare money". So spending stays higher, and outputs stay higher to meet the higher demand. Public welfare does seem to boost aggregate demand.

According to wikipedia, Federal Reserve Chairman Bernanke (and a colleague) noted the weakened correlation in 2005; i'm not the expert, my "welfare explanation" is not official




OECD Glossary of Statistical Terms - Employment to population ratio Definition
Okun's law - Wikipedia, the free encyclopedia




Logically, the E rate is the best statistic. The E rate is the ratio of labor demanded (workers), to labor supplied (workers + lookers), which is the fundamental "demand to supply" ratio underpinning all economic analysis. Every price, including the price of labor (wages), represents a ratio of demand to supply. Once you recognize that the E rate is that ratio; then you understand that rising E rates will prompt rising wages. Policies should not "reduce UE" (double negative), but "boost E". That will boost jobs & wages & spending & GDP. Utilizing the E rate looks at the economics "up-side up". Society wants to find ways to motivate more demand for labor; higher E rates; higher wages. Society shouldn't "fight UE" by "preventing businesses from firing people"; but "boost E" by incentivizing hiring. Anything that gets in the way of business expansion, and gets in the way of hiring, restricts demand for labor, and reduces wages.

 

[itfitzme]

Why would the Fed data come out significantly different? What population data are they using?

The more volatile ratio divides by a smaller number, not the whole population, but only the "working age" population 15+. Less misleading would be "employment-to-working-age-population-ratio":

The employment-to-population ratio is defined as the proportion of an economy’s working-age population that is employed... For most economies, the working-age population is defined as persons aged 15 years and older

The WA population represents "every able-bodied potential worker" in society. Assembling all the stats:

total population = WA population + kids..

.....Crudely, "not in the labor force" means "lazy lay-abouts (on welfare)" ...


...

But spending is boosted by "free government welfare money". So spending stays higher, and outputs stay higher to meet the higher demand. Public welfare does seem to boost aggregate demand.

...

​

That really doesn't answer the question. I didn't need a lecture on what the labor force consists of, or how employment is calculated. It was some good stuff, but doesn't answer the question.

Now that I have a bit of time, let me restate...

I've got this from the BLS CPS data. When it comes to employment, they would be the go to source.

Labor Force and Employment as a percentage of Civilian Population;

So you have the following from the Fed Graphs. It seems a good match to the BLS CPS data

Then you have this one.

It is generally similar but has a bit different presentation of what happened after 2000, with the 2003 peak reaching the same level as the 2000 peak.

So I am asking, what is it then showing? Why is it not matching the CPS BLS data or the first Fed Graph that you presented?

From the looks of it, in the first one you have employment over civilian non-institutionalized population of working age. The second is employment over some other population, "total population", institutionalized, incarcerated, military?, illegal?, kids, etc..

So I am asking, describe the difference between the two populations such that it accounts for the difference. More directly, what does it mean the EmpLevel/TotPop > EmpLevel/CPop after 2000 and why do I care?

----

On a side note:

"Crudely, "not in the labor force" means "lazy lay-abouts (on welfare)"

Not in the labor force would be retired, stay at home moms/dads, taking care of family, discouraged, in school, would take a job if offered and, as you say lazy. There are a host or reasons for NILF that are due to finding more utility in not working an official job or running a business as a contractor. Choosing to label the entire group according to one sub-group mis-represents that group.

Maybe it is, maybe it isn't. But there are more "valid" reasons for finding utility in staying at home. Without differentiating the absolute levels to demonstrate that the group is best represented by one particular sub-group, the only reasonable label is exactly what it is, "not in the labor force".​

 

[itfitzme]

First off, I have never said anything about Marxism or liberals. I have no interest in what the "liberals" or "Marixists" would hope.

too stupid; in the beginning you presented yourself as an impartial economic scientist. When that didn't work you debated as a open liberal. Now yu're back to pretending you're objective with no interest???? Joke??

Second, I have never said anything about the disappearing middle class. All I presented was the US Census household income data, noting that it has a) begun to deline since 2000

how odd, that is the basic liberal theme too!!!

b) that the spread has become more skewed over time, c) that this skew is apparent in that house hold incomes fall less and gain more ground for the higher quintiles d) that, interestingly enough, the lowest quintile has seen a bit higher gain then the second quintile.

and i pointed that most middle class Americans are now buying tons of new stuff that they could never afford like smart phones, 3D TVs, airline tickets, and food.

Plus the quintiles are always changing so as to make comparisons meaningless. For example, we have had a explosion of poor single mothers forming a new bottom quintile thanks to liberal programs and at the same time we have had a explosions of 2 income families with both adults having MA's or Phd's and so big combined upper quintile incomes.
And, we have had many liberal programs driving middle class jobs off shore!!

Welcome to Econ 101, liberal!!


You seriously need to get some medical help.

[/QUOTE]

Yeah, I've also said that it only makes sense if taxes are lowered, then companies have more money to invest in supplies to they can meet untapped demand. Didn't hear you calling me a conservative.

I have read Widdekind referring to the "goven't gun" and not in the labor force as lazy welfare, and yet you call him "liberal".

If the "liberals" refer to an increasing income inequality and the data supports it, then guess what, they are right.

If "conservatives" refer to lower taxes as increasing GDP and the data supports it, then guess what, they are right.

Welcome to sanity.

The problem you have is you can't tell the difference between reality and your fantasy world of "I'm a conservative, fighting for all that is right and good." You aren't a conservative, referring to you as such would be an insult to Widdekind and other intelligent people that have a conservative leaning. You are just a fucking insane idiot that has latched on to conservatism because your dad beat you and your mother.

 

[itfitzme]

I get the same effect for Employment Level vs. Total Population. It doesn't show the same downward trend of peak employment since 2000.

So, what's the difference? Fewer children? Are we saying that less of the non-institutionalized population is working because there are fewer children?

What is it that accounts for Cpop/TotPop getting larger? That is CPop/(CPop+Children+Inmates+Insane).

Is there a causality in there, that the employment ratio has fallen because there are relatively less Children+Inmates+Insane? Is that, perhaps, simply a baby boom/echo/trough effect?

Another way to do it is not-Cpop to Cpop ratio. That is (Children+Inmates+Insane)/CPop.

It peaked in 1993. And, along with the change in gasoline prices shifting to an upward trend in 2000, that gives two fundamental changes. The gasoline price rise would be, at first, attributed to higher demand.

Can we say that EmpLevel/Cpop has fallen because (Children+Inmates+Insane) has fallen and oil prices have risen?

 

[EdwardBaiamonte]

Yeah, I've also said that it only makes sense if taxes are lowered, then companies have more money to invest in supplies to they can meet untapped demand. Didn't hear you calling me a conservative.

it?????? what is it??????????????????????

If the "liberals" refer to an increasing income inequality and the data supports it, then guess what, they are right.

they may be right, but more more importantly they are wrong about the cause (stupid liberal programs) and cure (more stupid liberal programs).

If "conservatives" refer to lower taxes as increasing GDP and the data supports it, then guess what, they are right.

data is mostly meaningless without the conceptual IQ one must have to understand it.

The problem you have is you can't tell the difference between reality and your fantasy world of "I'm a conservative, fighting for all that is right and good."

of course if that was true you would not be so afraid to point out your best example to make your poist for the whole world to see. What does your fear tell you.

You aren't a conservative, referring to you as such would be an insult to Widdekind and other intelligent people that have a conservative leaning.

Of course if i was not a conservative/ libertarian you would not be so afraid to point out your best example to make your point for the whole world to see. What does your fear tell you about your character and about liberalism??

You are just a fucking insane idiot that has latched on to conservatism because your dad beat you and your mother.

then I should be easy to defeat in debate. Why not show your best example of having done that or admit you lack the IQ to do so??