Economic illiteracy re: the GDP figure

[gfm7175]

The GDP number is an extremely misleading number to people who don't understand how it is calculated nor what it means beyond the surface level. Our economy is currently in the toilet right now. We are actually in an economic depression atm and have been in one since the covid lockdowns. But, but, but GDP is rising!! That's a GOOD thing, right??

Let me explain why that number isn't actually what one thinks it is by way of a short example. Remember that the GDP value is based on dollars, which are subject to inflation, and no, inflation is not "factored into" the GDP number.

BEFORE: 1,000 widgets @ $1.00/widget = $1,000.00 value of economy
AFTER: 686 widgets @ $1.50/widget = $1,029.00 value of economy

The more common (uninformed) reaction: YAYYYYY!!! THE ECONOMY IS GRAND!!!!! +2.9% GDP!!!!!

My (informed) reaction: Wow, the economy sure suuuuuuucks right now... the price of widgets has increased by 50% and the production of widgets is down 31.4%.

That's, in a nutshell, what's happening right now, and that's NOT a good thing. The dollar is being inflated by the federal government "printing money" without any corresponding increase in wealth, and prices are increasing due to the World Economic Forum's "green energy" agenda (aka the war against feasible fuels) which is based on their wacky fundamentalist-style religion of Climate Change. This is causing energy/gas prices to skyrocket, which is causing the prices of everything else to skyrocket.

The "America Last" agenda of Joe Biden's handlers (Marxism) SUCKS BALLS and is only causing poverty and death... Please note that this "America Last" agenda is the very same national level economic agenda of RINOs and members of the RNC club and the politicians who they fund (this includes Ron DeSantis). The "America First" agenda of Donald Trump (MAGA) is what we need to return back to, as it resulted in an increased QOL for everyone throughout his term (until Demonkkkrats drummed up fear mongering in the name of covid)... DONALD TRUMP FOR 2024 PRESIDENT!!!! I digress.

Here's a couple of follow up questions to anyone who thinks that the economy is great right now ---> If the economy is soooo great right now, then why are big tech companies currently laying off employees to the tune of tens of thousands of them? Amazon just laid off 18,000 employees, for example...

If the economy is soooooooo great right now, then why were retailers laying off employees during the holidays when they are usually ramping up for increased demand by hiring a bunch of additional help?

In the real world, outside of the latest manipulative GDP number, people are currently paying more to get less groceries, paying more to heat their homes at a lower thermostat setting, paying more to drive their vehicle less miles, and etc etc...

 

[Dekster]

The GDP number is an extremely misleading number to people who don't understand how it is calculated nor what it means beyond the surface level. Our economy is currently in the toilet right now. We are actually in an economic depression atm and have been in one since the covid lockdowns. But, but, but GDP is rising!! That's a GOOD thing, right??

Let me explain why that number isn't actually what one thinks it is by way of a short example. Remember that the GDP value is based on dollars, which are subject to inflation, and no, inflation is not "factored into" the GDP number.

BEFORE: 1,000 widgets @ $1.00/widget = $1,000.00 value of economy
AFTER: 686 widgets @ $1.50/widget = $1,029.00 value of economy

The more common (uninformed) reaction: YAYYYYY!!! THE ECONOMY IS GRAND!!!!! +2.9% GDP!!!!!

My (informed) reaction: Wow, the economy sure suuuuuuucks right now... the price of widgets has increased by 50% and the production of widgets is down 31.4%.

That's, in a nutshell, what's happening right now, and that's NOT a good thing. The dollar is being inflated by the federal government "printing money" without any corresponding increase in wealth, and prices are increasing due to the World Economic Forum's "green energy" agenda (aka the war against feasible fuels) which is based on their wacky fundamentalist-style religion of Climate Change. This is causing energy/gas prices to skyrocket, which is causing the prices of everything else to skyrocket.

The "America Last" agenda of Joe Biden's handlers (Marxism) SUCKS BALLS and is only causing poverty and death... Please note that this "America Last" agenda is the very same national level economic agenda of RINOs and members of the RNC club and the politicians who they fund (this includes Ron DeSantis). The "America First" agenda of Donald Trump (MAGA) is what we need to return back to, as it resulted in an increased QOL for everyone throughout his term (until Demonkkkrats drummed up fear mongering in the name of covid)... DONALD TRUMP FOR 2024 PRESIDENT!!!! I digress.

Here's a couple of follow up questions to anyone who thinks that the economy is great right now ---> If the economy is soooo great right now, then why are big tech companies currently laying off employees to the tune of tens of thousands of them? Amazon just laid off 18,000 employees, for example...

If the economy is soooooooo great right now, then why were retailers laying off employees during the holidays when they are usually ramping up for increased demand by hiring a bunch of additional help?

In the real world, outside of the latest manipulative GDP number, people are currently paying more to get less groceries, paying more to heat their homes at a lower thermostat setting, paying more to drive their vehicle less miles, and etc etc...

Your analysis is only one using nominal GDP, not real GDP which uses a price deflator to make it a more relevant tool for comparison. Anyway, we are definitely heading into a recession. Personal consumption was down in December, interest rates on mortgages are starting to come off their recent highs (and rumor is that there is about to be a massive wave of deferred foreclosures coming through the pipeline), and used vehicle prices are softening, though not yet to pre-pandemic levels.

 

[gfm7175]

Your analysis is only one using nominal GDP, not real GDP which uses a price deflator to make it a more relevant tool for comparison.

The only real difference between 'nominal' and 'real' GDP is that 'nominal' doesn't attempt to adjust for inflation meanwhile 'real' attempts to (and ultimately fails to) adjust for inflation, leaving it as nothing more than a number that is based upon an inflation rate that is so much lower than what is actually being experienced in the real world. IOW, only a very small fraction of inflation is actually being "accounted for" in a 'real GDP' value.

What is being seen in these recent GDP numbers is merely the increased valuation of goods/services, NOT any sort of increase in actual output. Actual outputs are falling (hence why employees are being laid off).

Anyway, we are definitely heading into a recession.

We're long past "heading into" ... We've already been in an economic depression for years now (since the covid lockdowns), with no end in sight as the energy policies that are directly causing it are being doubled down on.

Personal consumption was down in December,

Yup. Not good.

interest rates on mortgages are starting to come off their recent highs (and rumor is that there is about to be a massive wave of deferred foreclosures coming through the pipeline),

They won't come down to a decent rate anytime soon, as the FED is still pretending that "consumer demand" is "too high". IOW, the FED continues to pretend that "massive consumer demand" is the issue rather than the "war against feasible fuels" in the name of Climate Change.

and used vehicle prices are softening, though not yet to pre-pandemic levels.

I hope they become reasonable again. We'll see.

 

[Toddsterpatriot]

The GDP number is an extremely misleading number to people who don't understand how it is calculated nor what it means beyond the surface level. Our economy is currently in the toilet right now. We are actually in an economic depression atm and have been in one since the covid lockdowns. But, but, but GDP is rising!! That's a GOOD thing, right??

Let me explain why that number isn't actually what one thinks it is by way of a short example. Remember that the GDP value is based on dollars, which are subject to inflation, and no, inflation is not "factored into" the GDP number.

BEFORE: 1,000 widgets @ $1.00/widget = $1,000.00 value of economy
AFTER: 686 widgets @ $1.50/widget = $1,029.00 value of economy

The more common (uninformed) reaction: YAYYYYY!!! THE ECONOMY IS GRAND!!!!! +2.9% GDP!!!!!

My (informed) reaction: Wow, the economy sure suuuuuuucks right now... the price of widgets has increased by 50% and the production of widgets is down 31.4%.

That's, in a nutshell, what's happening right now, and that's NOT a good thing. The dollar is being inflated by the federal government "printing money" without any corresponding increase in wealth, and prices are increasing due to the World Economic Forum's "green energy" agenda (aka the war against feasible fuels) which is based on their wacky fundamentalist-style religion of Climate Change. This is causing energy/gas prices to skyrocket, which is causing the prices of everything else to skyrocket.

The "America Last" agenda of Joe Biden's handlers (Marxism) SUCKS BALLS and is only causing poverty and death... Please note that this "America Last" agenda is the very same national level economic agenda of RINOs and members of the RNC club and the politicians who they fund (this includes Ron DeSantis). The "America First" agenda of Donald Trump (MAGA) is what we need to return back to, as it resulted in an increased QOL for everyone throughout his term (until Demonkkkrats drummed up fear mongering in the name of covid)... DONALD TRUMP FOR 2024 PRESIDENT!!!! I digress.

Here's a couple of follow up questions to anyone who thinks that the economy is great right now ---> If the economy is soooo great right now, then why are big tech companies currently laying off employees to the tune of tens of thousands of them? Amazon just laid off 18,000 employees, for example...

If the economy is soooooooo great right now, then why were retailers laying off employees during the holidays when they are usually ramping up for increased demand by hiring a bunch of additional help?

In the real world, outside of the latest manipulative GDP number, people are currently paying more to get less groceries, paying more to heat their homes at a lower thermostat setting, paying more to drive their vehicle less miles, and etc etc...

Remember that the GDP value is based on dollars, which are subject to inflation, and no, inflation is not "factored into" the GDP number.

Inflation is factored into "Real GDP".

 

[gfm7175]

Inflation is factored into "Real GDP".

No it isn't. While the BEA does attempt to "factor inflation in", they ultimately fail at it.

A severe inflationary cycle such as this one greatly skews the GDP value, as I have demonstrated in my OP in order to explain in simple terms what is happening right now. The BEA, in their failed attempt to "factor inflation in", will use a rate that is MUCH lower than what is actually being experienced (e.g., they used 5.5% for the 4th Q of 2022).

Meanwhile, Dow Chemical (during that same period) incurred a 39% increase in costs to process and produce raw materials (this is at the beginning of the supply chain) and their output dropped 4%. That number is much closer to the situation that people are actually facing (not a much smaller 5.5%), so like I said, the 'real GDP' value does NOT actually account for inflation (even though it tries to).

The bottom line is this: Our economy SUCKS right now, regardless of a positive or a negative GDP value... When you go to the grocery store and you fill up your cart and you are paying X% more for your groceries, do you also have a corresponding X% more foodstuff inside of your cart? Only the same amount as before?? Maybe even less than you did before? --- Answer: You left with the same, or less, foodstuff than you did beforehand, even though you are paying X% more than beforehand for that foodstuff.

What is causing all of this?? It is being directly caused by the national energy policies of Joe Biden's handlers (which other "Western" countries such as Canada and Germany are also implementing). Their war on feasible fuels (in the name of "climate change") is hitting people's pocketbooks HARD because it is causing the increased fuel prices that are causing the increased prices of everything else. But no, let's keep on pretending that "massive consumer demand" is driving this inflationary issue and that increasing interest rates, making it even harder yet on people, is going to "fix it"... hahahahahahahahaha

In reality, this economic pain is simply a "means to an end". Since feasible fuels (coal, oil, natural gas) are now "evil", and unfeasible fuels (wind, solar) are now "good", that means that an economy of the scale that you and I are currently accustomed to will no longer be able to be maintained (iow, it must shrink in size). Thus, the FED interest rate move, disguised as an attempt to combat inflation, is actually being done with purposeful intent to SHRINK the economy down to a size that wind/solar fuels can actually handle. Widespread increases in poverty, unemployment, homelessness, sickness, death, ... ... ...??? Simply a "means to an end"... ALL HAIL THE GODDESS CLIMATE!!!!!!

 

[Toddsterpatriot]

No it isn't. While the BEA does attempt to "factor inflation in", they ultimately fail at it.

A severe inflationary cycle such as this one greatly skews the GDP value, as I have demonstrated in my OP in order to explain in simple terms what is happening right now. The BEA, in their failed attempt to "factor inflation in", will use a rate that is MUCH lower than what is actually being experienced (e.g., they used 5.5% for the 4th Q of 2022).

Meanwhile, Dow Chemical (during that same period) incurred a 39% increase in costs to process and produce raw materials (this is at the beginning of the supply chain) and their output dropped 4%. That number is much closer to the situation that people are actually facing (not a much smaller 5.5%), so like I said, the 'real GDP' value does NOT actually account for inflation (even though it tries to).

The bottom line is this: Our economy SUCKS right now, regardless of a positive or a negative GDP value... When you go to the grocery store and you fill up your cart and you are paying X% more for your groceries, do you also have a corresponding X% more foodstuff inside of your cart? Only the same amount as before?? Maybe even less than you did before? --- Answer: You left with the same, or less, foodstuff than you did beforehand, even though you are paying X% more than beforehand for that foodstuff.

What is causing all of this?? It is being directly caused by the national energy policies of Joe Biden's handlers (which other "Western" countries such as Canada and Germany are also implementing). Their war on feasible fuels (in the name of "climate change") is hitting people's pocketbooks HARD because it is causing the increased fuel prices that are causing the increased prices of everything else. But no, let's keep on pretending that "massive consumer demand" is driving this inflationary issue and that increasing interest rates, making it even harder yet on people, is going to "fix it"... hahahahahahahahaha

In reality, this economic pain is simply a "means to an end". Since feasible fuels (coal, oil, natural gas) are now "evil", and unfeasible fuels (wind, solar) are now "good", that means that an economy of the scale that you and I are currently accustomed to will no longer be able to be maintained (iow, it must shrink in size). Thus, the FED interest rate move, disguised as an attempt to combat inflation, is actually being done with purposeful intent to SHRINK the economy down to a size that wind/solar fuels can actually handle. Widespread increases in poverty, unemployment, homelessness, sickness, death, ... ... ...??? Simply a "means to an end"... ALL HAIL THE GODDESS CLIMATE!!!!!!

No it isn't.

Yes it is.

While the BEA does attempt to "factor inflation in", they ultimately fail at it

Why? What number do they use? What number should they use?

 

[gfm7175]

No it isn't.

Yes it is.

While the BEA does attempt to "factor inflation in", they ultimately fail at it

Why? What number do they use? What number should they use?

No it's not, and I already explained how it's not.

Your questions are RQAAs (repetitive question already answered). They were all answered in my prior post. If those sorts of questions continue, they will be met with a simple 'RQAA' response.

 

[Toddsterpatriot]

No it's not, and I already explained how it's not.

Your questions are RQAAs (repetitive question already answered). They were all answered in my prior post. If those sorts of questions continue, they will be met with a simple 'RQAA' response.

Where is the "real inflation number"?