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Fight_n_back Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 01:48 AM
Original message
Serious question for DU econimists...
Is the "growth" the US economy shows reasonable given the amount of defecit spending we are doing? In other words, anyone can have a "recovery" by borrowing staggering sums of money but is the US recovery commensurate with the amounts of borrowed funds being pumped into the economy?

How can I find out something like this woth out learning how to figure it out myself?
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SendTheGOPPacking Donating Member (227 posts) Send PM | Profile | Ignore Sun Mar-21-04 01:50 AM
Response to Original message
1. What's an econimist?
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Fight_n_back Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 01:54 AM
Response to Reply #1
3. In other words
you can't answer the question so you decided to focus on a typo...your parents must be very proud.
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SendTheGOPPacking Donating Member (227 posts) Send PM | Profile | Ignore Sun Mar-21-04 02:04 AM
Response to Reply #3
4. Sorry -
I couldn't resist.

I didn't mean to offend.
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rockymountaindem Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 01:52 AM
Response to Original message
2. Check out "Had Enough" by Carville.
He had a great graph in there about past economic recoveries vs this one. It's pretty bad when you look at it. Bush* lies like a rug.
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dakota_democrat Donating Member (334 posts) Send PM | Profile | Ignore Sun Mar-21-04 02:14 AM
Response to Original message
5. Well, you can look at it this way first
National GDP is a sum of four figures: the nation's consumption, investment (which is putting money into the stock market/savings accounts and what-not, as well as capital investment in factories and company equipment), government spending, and net exports (often a negative drain because our imports is significantly greater than our exports).

Obviously, looking at this, there's no direct connection between GDP and employment, which is why the GDP has increased without a decrease in unemployment. This is why the Repugs point at the GDP and say the economy's fine, because it's the only real number they can use to say the economy's not in the tank. The fact of the matter is that too many people correlate the economy with having a job, and in the 21st century, that's not true. The economy's alright; the job market's shit. The job market's what the * administration needs to be working on, but the job market doesn't generate corporate profits, so they don't care.
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Fight_n_back Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 04:43 AM
Response to Reply #5
7. Then I would be interested
in seeing the percentages of those categories. Since government spending is so incredibley huge and consumption is also bigger than ever, it would stand to reason that investment is not high.

Which would mena that we will ahve nothing to show for this "recovery". It is paper thin.

Are we in for really deep shit? Like, soon?
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TreasonousBastard Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 03:51 AM
Response to Original message
6. Unfortunately...
most of the people, including me, who would put numbers together or try to explain it, are full of shit.

So, you have to learn a little about economics yourself, so you can be full of shit too. But, at least then you know where it came from.

Everyone fudges the numbers and picks definitions they like to prove a point. Economics is called the "dismal science" for a reason.

Slightly more seriously, and confusingly... yes, borrowed money does affect the GDP and growth figures. But, so do the increased gas prices, inventory restoration, productivity increases, tax rebates, mortgage rates, mutual fund profittaking, and a whole bunch of other things.

Most of the Federal debt is going to pay for retiring old Federal notes, with their interest, and some of it is paying for current deficits. So, the massive debt really isn't buying much new that wouldn't be bought anyway. Except for Shrub's wars, which seem to be paid for by reducing other Federal services.

Private debt, like maxing out credit cards and home equity loans, probably has more to do with growth than public debt. There's a few billion there that goes to buy stuff. And, the exceptional quarter we had last year was due almost entirely to the 90 billion in tax rebate/bribe checks that went out. Commercial debt gets really hairy to explain in terms of GDP and I'm not going there for now. Suffice it to say that without debt, business would come to a complete standstill.

The simplest definition of GDP is the total of goods and products sold domestically. What's happening now is that we are able to sell more goods and services at high prices with fewer people involved, and many working are making less money. That's increased productivity, and would normally be considered a good thing, except that too many people are out of work, and too many more aren't being paid as much as they are worth.

It's a really scary situation, and don't believe anyone who has a simple answer.

My personal belief is that we are at a crossroad where the world economy is undergoing a huge adjustment. The US has been consuming about 25% of the world's resources for at least the past half century, and Europe, Japan and a few other countries have hogged much of the rest, although not quite as much as we have.

There are over 3 billion Indians and Chinese who are fast catching up to western consumption rates, and we are about to see interesting times as they compete for resources along with our jobs.

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NuttyFluffers Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 08:22 AM
Response to Reply #6
8. there is no love lost for me on Economics as a discipline
Edited on Sun Mar-21-04 08:25 AM by NuttyFluffers
i repsect business class and social science classes more becase they come closer to the messy truth of economic forces than all the number crunching i've had to do in econ. classes.

been steeped hard in scientific method and math (with a healthy love of critical thinking, poetry, and social sciences - just like everyone, y'know ;) ) i found it so hard to cope with economics. up was down on wednesdays when you wore plaid... it made no sense. they produced numbers and then if the product made them sad they said, well let's go back to the problem and take out stuff that probably makes the answer so depressing. i'm so not lying here. my class almost had a revolt with the intellectuals in it. the only thing that saved the teacher is that we were apoplectic throughout his speech long enough for class to be over. we finished it for credits, but that's just it. it's just a class for credit.

an example: remember how consumption+investments+gov't spending+exports was tallied up? the equation stands as C+I+G+ the reason X is in brackets is because it is the first thing you can drop from the equation if the result is 'an unpleasant number.' if i did that in a science class, or a population study in any other social science, I'd be fired so fast that the chalk would still be spinning in the air as my ass hits the asphalt outside campus. and that's just the easiest example. it is not a 'dark science' it is a ludicrous science (all apologies to those who got degrees in it - don't diss you, just your entire field of study you've dedicated your life to, nothing personal ;) ).

what you are seeing economically is absolute folly. several articles i've recently come across (a few op-ed pieces) are commenting that foreign employed labor is not tabulated into the productivity equation. and yet they are marvelling how american productivity is at its highest recorded levels ever... must be the steroids... fools. production is still as high as ever, and the # of workers you add to the equation is lower, even though the people involved is the same or higher, and you are suprised by the following result showing that american productivity is shooting through the roof?

best advice i can give: read about the simplistic basics of supply and demand, learn business terminologies, and learn about human nature. after that trust your gut and you'll out-perform and out-predict just about any economist you come across. only the rare few, those willing to go against grain funnily enough, are worth listening to. and i wouldn't trust this administration's economic advisors as far as a paralyzed child can throw them.

...that little common sense gut feeling you have that says we are in a very bad situation economically? trust that. that one is right.
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newyawker99 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 02:06 PM
Response to Reply #8
9. Hi NuttyFluffers!!
Welcome to DU!! :toast:
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kentuck Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-21-04 02:20 PM
Response to Original message
10. I'm not sure Keynes would agree with the amount spent....
and he invented the theory. It seems we should be doing a lot better, but of course, this Adminsistration has an economic policy that contradicts all previous theories : Cut taxes and raise spending at the same time and run huge historic deficits??????????/
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