Deficit Continues to Shrink

[punked]

lol. You have no clue what GDP is.

GDP is all the spending that takes place in a nation. Public or Private. It is blind it doesn't matter if the spending is on oil pipe line bursts or on food for the poor. It is just a number that represents how much money changed hands in that country.

Edited July 31, 2012 by punked

[Bonam]

GDP is all the spending that takes place in a nation. Public or Private. It is blind it doesn't matter if the spending is on pipe line bursts or on food for the poor. It is just a number that represents how much money changed hands in that country.

That's actually an incorrect definition. GDP is the market value of goods and services produced in the nation. It is not the "spending" in that nation.

[punked]

That's actually an incorrect definition. GDP is the market value of goods and services produced in the nation. It is not the "spending" in that nation.

That really isn't true. An oil spill that doesn't happen doesn't contribute to the GDP of a nation even if the market value of an oil spill would costs 100 Billion to clean up. That oil clean up does however contribute to the GDP if that oil spill does happen. So you must spend on something for it to contribute to that countries GDP number.

A playbook which is in stock for 600 dollars and there is a million of them wont count for that amount unless it is bought for that amount. When the price is slashed so people SPEND money on it to 250 it will be the 250 that counts toward the GDP.

Edited July 31, 2012 by punked

[madmax]

Awesome strawman. Nobody here has suggested that.

LMAO... taste of your own medicine..you are the strawman king when it comes to Greece...

[madmax]

I've been nervous for about 30 years now, Max!

I started to believe way back in the early 80's that we were headed for economic trouble. I had been in the new Computer chip age for only a couple of years and we had entered a recession. Business managers began to do the business things to ride out the storm. So did finance ministers and other politicians.

We saw a lot of unexpected things happen in the economy during those times. We had interest rates go through the roof - 22% mortgges! Traditional government actions toward reducing unemployment didn't seem to work.

I began to see some parallels with what I was seeing in the market I served. The world was changing! We were still going through the same cycles but the details were changing. Yet the way "the powers that be" attempted to deal with things did not.

I watched secretary pools disappear! The computer was eliminating a huge number of jobs. The government seemed blissfully unaware of how things were changing. They would do the same old things to try to stimulate employment but the trend for the computer to eliminate clerical jobs was fighting them and winning by a landslide! The same thing was happening with accounting.

I saw this with the production line in factories, in the office staff and almost everywhere I looked. As I said, the government didn't see it. For that matter, a lot of business managers didn't either and I watched their firms go under.

I was reminded of Hitler's invasion of Poland. He understood the new technology of warfare and launched his blitzkrieg. The Poles responded with cavalry - troops on horses against tanks.

The same situation seemed to be at play in society and its economy. Everybody was using the tools they had used for decades if not centuries - tools that had become obsolete with the newfangled technology.

"Trickle down economics" was also an old fashioned concept. Perhaps it is still true as an academic idea but new changes meant that businesses were doing different things with stimulus handouts. The trickle thus became not even a drip but just a damp seep on the ground! Government needs to understand these changes better and put stimulus money perhaps into different areas, with new strings on the money so that business has to spend it in ways that would increase that trickle!

Up until the mid 70's, a politician could spend his entire life in Parliament and when he finally went home things were not all that different from when he had left. The rate of change was slower and he didn't get too out of touch. After the mid 70's he was like Bill & Ted's Napoleon, dragged into the late 20th century. He loved that water slide but he had absolutely no idea of how to build one!

It took about 15 years before re-training programs not just came on the scene but were focused on jobs for the new economy. At first, they were aimed at those vanished secretarial pools!

I'm pointing out a difference here Max between the validity of a concept and the way it is applied. I still believe in "trickle down", but not when it's applied by old guys, unaware of the specifics of how the world has changed and using the tools they were taught years ago, before revolutionary technologies made it not just a new ball game but a new TYPE of game!

Love the History Lesson... I remember alot of it...

[madmax]

The nice thing about corporations, especially in a competitive environment, is that long term incompetence is unsustainable. Privately, it most certainly is and we see it regularly.

A lot of the time, however, this is not due to any inefficiencies in the private model vs the public model, but rather due to the fact that the corporation isn't going to endlessly underwrite huge losses year after year, like Ontario Hydro did. 7-10% of your energy bill here is spent paying back the debt the public company accumulated over 14 years ago prior to privitization....

I think that's more fact than anything. These countries, however, are small, homogenized (by race, climate, background etc) and are far from the paradises that they're popularly made out to be.

FYI

no disagreement... It follows true with what I was highlighting...just more detailed.... but it is the realities we deal with.

And yes, I also concur with your assessment of Northern Europe.

Only pointing out that it works for them.

We are in the middle between the two polars and I believe that is the balance this country requires. Mixed ..

[madmax]

And what do you think they are consuming? The goods and services produced by the private sector.

A service can be delivered and paid for by the consumer in Public or Private to create GDP.

Hydro, Insurance, HealthCare... anything where public and private models crossover or have exclusive control.

[Moonbox]

Yep economist in the US made predictions based on a 2 Trillion dollar stimulus. They saw a 800 Billion dollar one, gee I wonder why those numbers never matched up? You don't get to cut the knees out from under the stimulus then declare it a failure.

You're getting confused. I said that the REAL unemployment numbers ended up being higher than the estimated unemployment based on ZERO stimulus. To be clear, they estimated what unemployment would look like assuming they spent NOTHING on stimulus. As it turned out, that worst-case unemployment scenario was nowhere near as bad as the actual unemployment numbers ended up being, which makes it next to impossible to evaluate how effective the spending was.

GDP is all the spending that takes place in a nation. Public or Private. It is blind it doesn't matter if the spending is on oil pipe line bursts or on food for the poor. It is just a number that represents how much money changed hands in that country.

punked that REALLY not what GDP is. You're right that private/public doesn't really matter, but please look up the definition of GDP for future arguments' sake. It's silly to argue to use terms you don't even have a basic understanding of.

Edited July 31, 2012 by Moonbox

[Moonbox]

We are in the middle between the two polars and I believe that is the balance this country requires. Mixed ..

That's something that you and I have agreed on for a long time. When I follow American election campaigns, I lose more and more faith in the human race.

You only need to watch an American election campaign to see passionately people defend the right to be sodomized by the upper class.

Edited July 31, 2012 by Moonbox

[WWWTT]

lol. You have no clue what GDP is.

I did not realize that I was describing what Gross Domestic Product was as you have suggested?

But here's a shot and you tell me what you think buddy.

GDP is one of the indicators used to gauge the strength of a countries/province/regions economy.

It can be measured in two ways.

Income approach-adding up what everyone earned in one year(total compensation to employees,gross profit for incorporated and non incorporated firms,taxes less subsidies)

Expenditure approach(most common)-adding up what everyone spent in one year(total consumption,investment,government spending,net exports)

Does that help you any?

WWWTT

[CPCFTW]

A service can be delivered and paid for by the consumer in Public or Private to create GDP.

Hydro, Insurance, HealthCare... anything where public and private models crossover or have exclusive control.

And that's why I made the distinction that the only part of GDP growth that matters is the part generated by the private sector. We could borrow 1% of our GDP from China and pay for every Canadian to get a free massages, but that doesn't make that 1% GDP growth a good thing.

Government services are paid for by taxing the private sector and borrowing money. If we are reducing government services (cutting public sector jobs), and reducing borrowing (reducing the deficit), but GDP is still growing, I think it can be argued that our economy is doing quite well.

But my main point was to disrupt the lefty circle-jerk over a 1-mo GDP growth number. For you lefties, here is a good resource for you to start following economic indicators so you don't look so foolish next time:

http://www.forexfactory.com/#detail=41945

[CPCFTW]

I did not realize that I was describing what Gross Domestic Product was as you have suggested?

But here's a shot and you tell me what you think buddy.

GDP is one of the indicators used to gauge the strength of a countries/province/regions economy.

It can be measured in two ways.

Income approach-adding up what everyone earned in one year(total compensation to employees,gross profit for incorporated and non incorporated firms,taxes less subsidies)

Expenditure approach(most common)-adding up what everyone spent in one year(total consumption,investment,government spending,net exports)

Does that help you any?

WWWTT

It's good of you to read up on GDP this time before responding. Good job!

Now that you may understand what GDP is, think carefully about how I said "Gdp growth generated by the private sector is what really matters in the long term".

Now look at the bold above and try to think critically for once in your life (please avoid going to rabble.ca to "groupthink" this) and reconcile what I said with the bolded.

I'll help you: if private sector spending and investment accounted for a 0.3% increase in GDP growth, but reduced government spending reduced that number to 0.1%, would that necessarily be bad?

[WWWTT]

"Gdp growth generated by the private sector is what really matters in the long term".

I have never seen the consumer referred to as the "private sector" before.

From my stand point this term is given to distinguish between crown corporation/government and non crown/non government.But never the general public or consumer.

WWWTT

[CPCFTW]

I have never seen the consumer referred to as the "private sector" before.

From my stand point this term is given to distinguish between crown corporation/government and non crown/non government.But never the general public or consumer.

WWWTT

You're the only person discussing the consumer. Consumer spending is not the only component of GDP (although it is a large component).

But if you still need me to hold your hand through this... I'll do my best:

A. Consumer spending through the private sector

(eg. an employee of Telus paying his internet and tv bills, buying food, going to a movie, buying a car)

= + personal consumption part of the GDP equation

= good component of GDP growth

B. Consumer spending through the public sector

(eg. a TDSB teacher paying his internet and tv bills, buying food, going to a movie, buying a car)

= + personal consumption + government consumption part of the GDP equation

= not necessarily desirable components of GDP growth

Why? Because the government only borrowed from China or increased taxes on the private sector consumer to pay for the "growth". In the long run, only GDP growth generated by Consumer A is sustainable growth.

Caveat: even consumer A GDP growth is unsustainable if it is financed through too much consumer debt.

Edited August 1, 2012 by CPCFTW

[WWWTT]

private sector consumer

Hey there's a new one!

If you feel need to educate everyone on the subject,I am sure there are a few here that are willing to read your comments.

WWWTT

[CPCFTW]

Hey there's a new one!

If you feel need to educate everyone on the subject,I am sure there are a few here that are willing to read your comments.

WWWTT

Quite the substantive response...

It will be pretty evident to any readers that you are in over your head, so you are just using your heart to argue (which is usually the case with you).

Thank you for recording this evidence in the annals of the internet's series of tubes.

Edited August 1, 2012 by CPCFTW

[mentalfloss]

Looks like another shitty month of mediocre economic performance.

[punked]

You're the only person discussing the consumer. Consumer spending is not the only component of GDP (although it is a large component).

But if you still need me to hold your hand through this... I'll do my best:

A. Consumer spending through the private sector

(eg. an employee of Telus paying his internet and tv bills, buying food, going to a movie, buying a car)

= + personal consumption part of the GDP equation

= good component of GDP growth

B. Consumer spending through the public sector

(eg. a TDSB teacher paying his internet and tv bills, buying food, going to a movie, buying a car)

= + personal consumption + government consumption part of the GDP equation

= not necessarily desirable components of GDP growth

Why? Because the government only borrowed from China or increased taxes on the private sector consumer to pay for the "growth". In the long run, only GDP growth generated by Consumer A is sustainable growth.

Caveat: even consumer A GDP growth is unsustainable if it is financed through too much consumer debt.

You might need to tell growing low debt countries like Norway that public sector GDP doesn't count because they seem to be making a real good go of having high public sector GDP with out borrowing it all from China. In fact in Norway 30% of all companies are owned and run by the government.

[Moonbox]

Hey there's a new one!

If you feel need to educate everyone on the subject,I am sure there are a few here that are willing to read your comments.

First off, you didn't know what GDP meant, nor did punked. You made this VERY clear by your previous posts. What you might find funny, however, is that CPC FTW doesn't understand it very well either, which is really funny because he's sniping at you for it.

[punked]

First off, you didn't know what GDP meant, nor did punked. You made this VERY clear by your previous posts. What you might find funny, however, is that CPC FTW doesn't understand it very well either, which is really funny because he's sniping at you for it.

Nope sorry I stick by my definition of GDP. While simplified, I did that for a reason. While I did not include exports or imports I didn't see the need, in the context of this argument. Want to point out why I was wrong?

I used the Expenditure measure of GDP calculation. However that should be the same as Output measure and Income measure. It is just the simplest way to define the term.

Edited August 1, 2012 by punked

[Signals.Cpl]

Sorry but the list is too lengthy and I have no time.I think we are done with this subject for now.But I am sure there others here that will continue to debate this one with you.

I asked you to name SOME of them and you could not what does that say? It says the "lengthy list" does not exist.

By the way,the NDP is not the liberals.Nor does the NDP bear any responsibility for the actions of the previous liberal government!

Yes, but instead of blaming the Liberals for the increase military spending you blame the Conservatives for inheriting a war and arming the military to the minimum level needed to fight said war.

If you got a beef with the previous liberal government then I might very well agree with you!

WWWTT

My beef is with people who blame the conservatives for the actions and decisions of the previous government, arming the CF was a necessity yet instead of blaming the liberals for nearly destroying the military while sending getting involved in multiple PK missions and a war you blame the conservatives for investing in the military to fight the war they inherited, as if they had a choice in the matter.

[Signals.Cpl]

I doubt this is quite true, unless you honestly beliueve that the principled conservatives really, really care about the Forces, while the other parties just don't give a damn if they live or die.

It sounds unlikely.

Look at the 1990's and tell me the Liberals care for the military. Cut the budget, cut the number yet increase operational tempo. And no I don’t believe that the conservatives care about the military, the difference was that they were willing to spend the money needed to fight the war rather than go the "cheaper" way and bring more casualties home. I don’t think the NDP would have been happy anyway keep the military starving and bring more casualties home and they (NDP) would cry about the uncaring Conservatives, increase the budget and cut the casualties they (NDP) cry about the extra cost.

[cybercoma]

Look at the 1990's and tell me the Liberals care for the military. Cut the budget, cut the number yet increase operational tempo. And no I don’t believe that the conservatives care about the military, the difference was that they were willing to spend the money needed to fight the war rather than go the "cheaper" way and bring more casualties home. I don’t think the NDP would have been happy anyway keep the military starving and bring more casualties home and they (NDP) would cry about the uncaring Conservatives, increase the budget and cut the casualties they (NDP) cry about the extra cost.

It started a hell of a lot earlier than the Liberals in the 1980s and Mulroney didn't do much about it either. Our entire foreign service was gutted, while this myth that we are some sort of peacekeeping saviours of the world was perpetuated. It's all outlined in While Canada Slept: How We Lost Our Place in the World by Andrew Cohen.

[Shady]

It started a hell of a lot earlier than the Liberals in the 1980s and Mulroney didn't do much about it either. Our entire foreign service was gutted, while this myth that we are some sort of peacekeeping saviours of the world was perpetuated. It's all outlined in While Canada Slept: How We Lost Our Place in the World by Andrew Cohen.

We haven't lost our place in the world. That's one of Saint Jack's political talking points. That was part of the reason his letter to Canadians was so offensive.

[Moonbox]

Nope sorry I stick by my definition of GDP. While simplified, I did that for a reason. While I did not include exports or imports I didn't see the need, in the context of this argument. Want to point out why I was wrong?

Sure thing.

GDP is all the spending that takes place in a nation. Public or Private. It is blind it doesn't matter if the spending is on oil pipe line bursts or on food for the poor. It is just a number that represents how much money changed hands in that country.

Everything italicized there is wrong. You said you're referring to the expenditure approach, which is fine, but you're still completely wrong about how it's calculated. Pick whatever method you want, but you still only calculate the cost of final goods and services produced. If you add all of the spending, like you suggested, you're double counting everything, or worse. When you calculate the GDP value for Bombardier jet for example, you're only counting how much it finally cost for Bombardier to assemble and build the jet. You're not adding the original raw material cost, the cost to produce parts AND the final cost of the jet, because that's already all factored in to the final cost. Saying:

GDP is all the spending that takes place in a nation.

shows you don't really understand the term. That's fine. Most people don't. Just acknowledge it and move on though. Don't go google the definition and come back like you did here:

I used the Expenditure measure of GDP calculation. However that should be the same as Output measure and Income measure. It is just the simplest way to define the term.

because you're still misinterpreting it and it looks silly.