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US GDP "growth": $7 borrowed to get $1 in growth (Page 2)
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Originally Posted by Big Mac
I can refute hyteckit's preposterous replies to my challenge with the following words: Spending percentage of GDP. Look it up, hyteckit. Historically we've run 18%-20% budgets as percentage of GDP, but now it's at 24%.
hyteckit, you're objectively, absolutely wrong. We have a spending crisis, not a revenue problem. Unless you want to challenge the statistics, there's absolutely nothing you can say to the contrary that will change that fact. I expect an apology.
You are wrong and you called me names.
But you want an apology?
Where are your facts buddy?
Reagan supply-side voodoo economics. Tax cuts, tax cuts, tax cuts. More debt, more debt, more debt.
YouTube - ‪What They Won't Tell You about the National Debt‬‏
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Bush Tax Cuts == Job Killer
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Originally Posted by Athens
Hi reply?
Athens, why waste time posting this. You know it's a spelling mistake and it should be, "His reply".
So do you have a reply to him?
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Bush Tax Cuts == Job Killer
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We are in this mess because of Reagan supply-side voodoo economics.
Tax cuts, tax cuts, tax cuts. More debt. more debt, more debt. All started with Reagan.
Debt as a % of GDP
We are able to pay down our debt during WWII with increase government spending and tax rates of up to 80% - 90% for top earners.
Spending was over 50% in GDP during 1944 to 1945.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Would you guys say that Clinton's policies were productive for the economy, or was he just extremely lucky?
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I love how turtle said his thread was not about deficits.
The whole article he link to was an argument made on the basis of deficits.
I mean, 80% of the article was about the deficit, which the author calls it deficit, debt, or money borrowed.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Can turtle and big mac stop pretending they actually know anything about economics.
Calling people names and calling economics 'voodoo' is a sure sign that they don't know anything.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Originally Posted by hyteckit
Can turtle and big mac stop pretending they actually know anything about economics.
Calling people names and calling economics 'voodoo' is a sure sign that they don't know anything.
You do realize that there are multiple ways to look at economics, right? Their way is not necessarily "wrong".
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Originally Posted by freudling
Athens, why waste time posting this. You know it's a spelling mistake and it should be, "His reply".
So do you have a reply to him?
Actually now I didn't see it as His as a mistake lol but makes sense now.
And I don't have a reply really. Not at this time more research required, but as I see it now fractional reserve systems create money out of thin air with debt thus a majority of the money supply isn't based on products and services but of debt. Debt = money and money = debt. If all debt was paid off the money supply would be greatly shrunk but since there isn't enough Money to pay off all debt its a moot point.
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Originally Posted by besson3c
You do realize that there are multiple ways to look at economics, right? Their way is not necessarily "wrong".
Yes, there are multiple ways of looking at data.
But turtle and big mac is wrong because they are interpreting data incorrectly. So is the author of the article turtle link to.
Look at turtle's response to OAW. It's Keynesian voodoo for saying:
2. GDP typically goes down during economic downturns because well ... it's an economic downturn.
HAHA... Keynesian voodoo. That's like saying it gets hot in the summer as the temperatures go up is Keynesian voodoo.
I think there's big lack of understanding of GDP. Which is why I'm saying turtle and big mac knows nothing about economics.
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Last edited by hyteckit; Jun 3, 2011 at 05:56 PM.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Originally Posted by hyteckit
Yes, there are multiple ways of looking at data.
But turtle and big mac is wrong because they are interpreting data incorrectly. So is the author of the article turtle link to.
Look at turtle's response to OAW. It's Keynesian voodoo for saying:
2. GDP typically goes down during economic downturns because well ... it's an economic downturn.
HAHA... Keynesian voodoo. That's like saying it gets hot in the summer as the temperatures go up is Keynesian voodoo.
I think there's big lack of understanding of GDP. Which is why I'm saying turtle and big mac knows nothing about economics.
Which is why I'm pasting in comments from a friend of mine who has a PhD in Economics from Purdue, and is an Economist by trade. He'll be the first to tell you that Economics is somewhat bullshit. But he knows his stuff, and is also a Professor of Economics in his spare time.
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Originally Posted by freudling
Which is why I'm pasting in comments from a friend of mine who has a PhD in Economics from Purdue, and is an Economist by trade. He'll be the first to tell you that Economics is somewhat bullshit. But he knows his stuff, and is also a Professor of Economics in his spare time.
You can say Keynesian is BS or Reaganomics is BS. But the basic economic principles still applies.
GDP is still GDP, doesn't matter what economic school of thought you follow.
Economic theories are hard to test because you can't run the test in a lab in a controlled environment. You usually just look at historical data and draw your own conclusions based on basic economic principles.
However, you can't say the article wasn't about deficits when the whole premise of the argument was based on deficits, as turtle would like to argue.
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Last edited by hyteckit; Jun 3, 2011 at 06:32 PM.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Originally Posted by hyteckit
If revenues were higher, we wouldn't have a massive deficit spending problem would we?
Government spending after WWII + 80-90% tax rate on the wealthy is your panacea for recovery? We've got the government spending after WWII covered and knowing how that turned out... why should I believe the additional revenues generated from the above increases in taxes on the rich would have any greater an impact? In other words, if the government needs more money after that, then what? Lower tax rates? Engage pro-growth economic policies that remove the shackles of government busy-bodies? The answer is yes. Even Clinton understood that the worker-bees also like to consume.
BTW - How much money do you want the next (R) Administration to have anyway?
What problem did we have under Pres. Clinton? A massive surplus spending problem? Haha..
This is nothing more than a shameless apologetic for an economic philosophy that has infused a massive sum of money into the economy only to watch anemic growth at best (on paper) and the very real and indefensible declines in housing numbers along with consumer confidence and employment.
You're saying "let's give 'em more" and I'm asking you why?
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Originally Posted by ebuddy
Government spending after WWII + 80-90% tax rate on the wealthy is your panacea for recovery? We've got the government spending after WWII covered and knowing how that turned out... why should I believe the additional revenues generated from the above increases in taxes on the rich would have any greater an impact? In other words, if the government needs more money after that, then what? Lower tax rates? Engage pro-growth economic policies that remove the shackles of government busy-bodies? The answer is yes. Even Clinton understood that the worker-bees also like to consume.
BTW - How much money do you want the next (R) Administration to have anyway?
No one said not to reduce spending. I obviously advocate to cut $200 to $300 billion from the defense budget. End the freaking wars already.
But it's silly to say we don't have a revenue problem.
Originally Posted by ebuddy
This is nothing more than a shameless apologetic for an economic philosophy that has infused a massive sum of money into the economy only to watch anemic growth at best (on paper) and the very real and indefensible declines in housing numbers along with consumer confidence and employment.
You're saying "let's give 'em more" and I'm asking you why?
Revenue problem = "decline in housing numbers along with consumer confidence and employment."
See, even you can see we have a revenue problem. Revenue generated from taxes on sales, on employment, and on property are in decline.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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The point is that I've, through an Economist friend, already "debunked" the idea that the OP advanced: that the US government borrowed trillions to boost their GDP. Based on his comments, that's impossible and a misunderstanding of how economics works, even in the US.
As for the graph that Andy8 just posted, looks like revenues are recovering, and the gap closing between it and the deficit. So I don't see the debt as doom and gloom: their does appear to be economic recovery.
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Originally Posted by Andy8
Nice graph. Maybe there should be one from the 1940's to the 1970's to show how we paid off the deficit.
So it looks like we have a spending problem under Pres. Reagan and a Revenue problem under Pres. Bush.
Then in 2008 to 2009, we have the housing crash, job losses, auto & big bank bailouts, and big stimulus package that lead to both a spending problem and revenue problem.
Seems like the sensible thing to do is go back to the tax rates before Pres. Bush to increase revenues and end the wars to reduce spending.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Originally Posted by freudling
The point is that I've, through an Economist friend, already "debunked" the idea that the OP advanced: that the US government borrowed trillions to boost their GDP. Based on his comments, that's impossible and a misunderstanding of how economics works, even in the US.
As for the graph that Andy8 just posted, looks like revenues are recovering, and the gap closing between it and the deficit. So I don't see the debt as doom and gloom: their does appear to be economic recovery.
I wouldn't be at all surprised if the truth was somewhere in between the doom and gloom that the right would have us believe, and the "meh" attitude others embrace. I don't know whether the consternation is mostly political or mostly actually problematic, although I think that all of us acknowledge that it is actually problematic to some extent.
I also wouldn't be at all surprised if a sizable population on the right is using this as an opportunity to do what they've always done and would be doing now regardless of our debt situation, and that is try to find ways to handicap government so that it is less effective and has less regulatory teeth. The whole less effective proposition allows some the convenient narrative of "see? Government sucks, let's cut it down even more!!"
This isn't to say that there aren't parts of government that are grossly wasteful, ineffective, and a great big pile of suck, but I highly doubt that any of this is really all that new and that these arguments couldn't have been made decades ago as well.
This frustrates me because I feel that what our government should be doing should really be a practical matter taking into account costs, effectiveness, ramifications of existence and non-existence, etc. and not an ideological or philosophical one. I'm tired of all of this trickle down religion.
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Last edited by besson3c; Jun 26, 2011 at 11:29 PM.
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Those are projected revenues. And I find it laughable that those would purportedly climb faster and higher than at any point in the last 40 years.
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Originally Posted by freudling
The point is that I've, through an Economist friend, already "debunked" the idea that the OP advanced: that the US government borrowed trillions to boost their GDP. Based on his comments, that's impossible and a misunderstanding of how economics works, even in the US.
Dubunked, huh ?
-t
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Originally Posted by freudling
The point is that I've, through an Economist friend, already "debunked" the idea that the OP advanced: that the US government borrowed trillions to boost their GDP. Based on his comments, that's impossible and a misunderstanding of how economics works, even in the US.
As for the graph that Andy8 just posted, looks like revenues are recovering, and the gap closing between it and the deficit. So I don't see the debt as doom and gloom: their does appear to be economic recovery.
Based on your clumsy misreading of that graph, I am skeptical about your friend's credentials, conclusions, and existence, and whether you could understand what your friend said in the first place.
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We have an ASSHOLE PROBLEM! Too many of them voted for that idiot Owe-bama and his failed policies. Pissing money away JUST to piss money away has been standard operating procedure for the Democrats since time began. Why not craft efficient, cost effective legislation? Throwing money at a problem is as stupid as it gets. Why so MUCH waste? It's like a bunch of 2nd grade kids created all the legislation since Jan 2007. I guess it would be different if the Democrats had folks who understood the details.
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I thought it was congress that had ultimate authority over the spending and this trend of over spending started long ago. About the only time the trend was broken in recent history is during the Clinton years.
Originally Posted by hyteckit
Nice graph. Maybe there should be one from the 1940's to the 1970's to show how we paid off the deficit.
So it looks like we have a spending problem under Pres. Reagan and a Revenue problem under Pres. Bush.
Then in 2008 to 2009, we have the housing crash, job losses, auto & big bank bailouts, and big stimulus package that lead to both a spending problem and revenue problem.
Seems like the sensible thing to do is go back to the tax rates before Pres. Bush to increase revenues and end the wars to reduce spending.
Could end all the war's the US is in and it wouldn't make a dent in the deficit spending. Most of the debt spending is from the entitlement programs. The discretionary spending part of the budget is tiny compared to the mandatory spending part of the budget which alone exceeds revenue.
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Originally Posted by turtle777
Dubunked, huh ?
-t
What's the point of this thread? The OP stated that $7 is borrowed for every $1 in growth. That the boost to the GDP is misleading and false. I posted some information that suggests the OP misunderstands economics, GDP, etc.
If you have an issue with any of that, go back and address those comments.
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Originally Posted by Uncle Skeleton
Based on your clumsy misreading of that graph, I am skeptical about your friend's credentials, conclusions, and existence, and whether you could understand what your friend said in the first place.
Uncle Skeleton. Shut up and go derail another thread.
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Originally Posted by freudling
What's the point of this thread? The OP stated that $7 is borrowed for every $1 in growth. That the boost to the GDP is misleading and false. I posted some information that suggests the OP misunderstands economics, GDP, etc.
If you have an issue with any of that, go back and address those comments.
Psst. That already happened
Originally Posted by freudling
Uncle Skeleton. Shut up and go derail another thread.
Appeal to an unnamed authority
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Originally Posted by Uncle Skeleton
All green things must die. Charlie Sheen, 2011.
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Originally Posted by freudling
All green things must die. Charlie Sheen, 2011.
That's your "economist friend?"
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Originally Posted by freudling
If you have an issue with any of that, go back and address those comments.
Originally Posted by Uncle Skeleton
Exactly.
Maybe you trying to convey the essence of my argument to that said economist wasn't quite successful. At any rate, there are plenty of economists and academia around that are complete idiots and have no clue about anything. See Krugman et. al.
-t
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Originally Posted by Uncle Skeleton
Originally Posted by turtle777
Exactly.
Maybe you trying to convey the essence of my argument to that said economist wasn't quite successful. At any rate, there are plenty of economists and academia around that are complete idiots and have no clue about anything. See Krugman et. al.
-t
All you're doing is waving your hands and name calling. You haven't addressed the post about the problem with your/linked statement that borrowing has lead to false growth of GDP. That it's a misunderstanding of how GDP is calculated. Why all this "attack the commenters" and stuff? Why not just discuss the raw economics of it all.
I posted 2 very good comments my friend made. And if you must know, he's a Chief Economist for the government, has a Phd in Economics, and is a part-time Professor of Economics. So let's all collectively cut the "I'm a know it all internet forum guy" and focus 100% on the original topic. From what it looks to be, it's not possible to say that the government is falsely boosting its GDP by borrowing because of the way GDP is calculated. That's what I understand his point to be. I haven't looked in detail at the referenced article for this thread though.
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Originally Posted by freudling
All you're doing is waving your hands and name calling. You haven't addressed the post about the problem with your/linked statement that borrowing has lead to false growth of GDP.
Check again. Seriously.
And if you must know, he's a Chief Economist for the government, has a Phd in Economics, and is a part-time Professor of Economics.
That's an appeal to authority
So let's all collectively cut the "I'm a know it all internet forum guy" and focus 100% on the original topic.
Are you really going to badmouth "know it alls" in the same post where you boast about credentials?
From what it looks to be, it's not possible to say that the government is falsely boosting its GDP by borrowing because of the way GDP is calculated. That's what I understand his point to be. I haven't looked in detail at the referenced article for this thread though.
This (in bold) is exactly why an appeal to an unnamed authority is a fallacy. If you don't fully understand your unnamed friend's argument, there's no way for any of us (or you for that matter) to know that it really is "what it looks to be." And if you DO fully understand your friend's argument, then just present the argument and leave your friend out of it. Your friend's proxy doesn't help anything, and meanwhile it adds failure points to the chain of communication.
The value of experts is to tell you what road to walk, not to walk the road for you.
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Originally Posted by freudling
And if you must know, he's a Chief Economist for the government, has a Phd in Economics, and is a part-time Professor of Economics.
Oh, sorry, that completely explains the disconnect.
Seriously, don't you think your friend might have an agenda ?
You probably don't. Whatever. Keep believing that the guys that brought you the clusterf*ck this country is in know what's happening.
-t
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Originally Posted by freudling
From what it looks to be, it's not possible to say that the government is falsely boosting its GDP by borrowing because of the way GDP is calculated. That's what I understand his point to be. I haven't looked in detail at the referenced article for this thread though.
AGAIN, look at the formula, and tell me how "borrowing money" from printing it (i.e. QE1, 2, ...) gets taken out of this equation ?
GDP = domestic consumption (DC) + domestic investments (DI) + government spendings (GS) + net exports
It's clear that the printed money, spent for GS *ADDS* to GDP. So, on which side does it get deducted ?
It won't happen until the government pays back it's debt, raising the cash by higher taxation. That's not happened yet, therefore, GDP is inflated.
-t
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That's it ? That's how you go out ? Alright then.
-t
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Originally Posted by turtle777
AGAIN, look at the formula, and tell me how "borrowing money" from printing it (i.e. QE1, 2, ...) gets taken out of this equation ?
It's clear that the printed money, spent for GS *ADDS* to GDP. So, on which side does it get deducted ?
It won't happen until the government pays back it's debt, raising the cash by higher taxation. That's not happened yet, therefore, GDP is inflated.
-t
Its a bit more complicated then that. If you buy something from out side the country its counted as spending for either DC, DI or GS depending on if its individual, government or company doing it but if your paid to build something for a foreign consumer the payment isnt counted under DC, DI or GS but as a export instead. Investment money isnt counted for DC, DI or GS until the company spends actual money. Because investing money is considered saving money it is not counted in GDP. Under both the expenditure model and income model new money from the government does not count against GDP unless the money is spent on goods and services at which it becomes part of the GDP and can inflate it but its not really artificial because real goods and services are coming from the new money.
GDP = domestic consumption (DC) + domestic investments (DI) + government spendings (GS) + net exports
The US Governments make up almost 2 Trillion of the GDP of the country with private and domestic investment making up a bit less. The rest comes from personal consumption. Net exports of goods and services is a negative.
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Originally Posted by Athens
Under both the expenditure model and income model new money from the government does not count against GDP unless the money is spent on goods and services at which it becomes part of the GDP and can inflate it but its not really artificial because real goods and services are coming from the new money.
Sure, so let's look at what takes place with the printed money:
The government "invests" it by bailing out a bank or car manufacturer. That doesn't count as GDP yet.
However, once the money arrives at the bank or car manufacturer, it's spent (on salaries, services, goods...). There you have a GDP increase.
The increase of the governments balance sheet is not considered or netted against that GDP increase.
-t
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Originally Posted by turtle777
Sure, so let's look at what takes place with the printed money:
The government "invests" it by bailing out a bank or car manufacturer. That doesn't count as GDP yet.
However, once the money arrives at the bank or car manufacturer, it's spent (on salaries, services, goods...). There you have a GDP increase.
The increase of the governments balance sheet is not considered or netted against that GDP increase.
-t
Silly silly turtle.
Confusing GDP with GNP.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Addicted to MacNN
Join Date: May 2001
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Originally Posted by turtle777
AGAIN, look at the formula, and tell me how "borrowing money" from printing it (i.e. QE1, 2, ...) gets taken out of this equation ?
It's clear that the printed money, spent for GS *ADDS* to GDP. So, on which side does it get deducted ?
It won't happen until the government pays back it's debt, raising the cash by higher taxation. That's not happened yet, therefore, GDP is inflated.
-t
It doesn't. Duh.
That's not what GDP measures.
The only thing inflated is your understanding of what GDP is.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Clinically Insane
Join Date: Jun 2001
Location: planning a comeback !
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Could someone let lowcheckit know that I have him on ignore; I'm pretty sure his drivel is not even worth clicking the "view post" button.
-t
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Addicted to MacNN
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Originally Posted by turtle777
Could someone let lowcheckit know that I have him on ignore; I'm pretty sure his drivel is not even worth clicking the "view post" button.
-t
You have me on ignore; But the internet do not.
Everyone can read how silly you are to complain about how GDP is measured.
Your complaint about how GDP is measured is strictly attributed to your lack of understand of what GDP is.
GDP measures spending.
You can complain about GDP not providing an accurate picture of the economy. But don't b*tch about what the GDP measures. It's silly.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Addicted to MacNN
Join Date: Nov 2002
Location: Rockville, MD
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Originally Posted by turtle777
Could someone let lowcheckit know that I have him on ignore; I'm pretty sure his drivel is not even worth clicking the "view post" button.
-t
He's complaining because "borrowing" isn't part of GDP, only "spending"
Originally Posted by hyteckit
Your complaint about how GDP is measured is strictly attributed to your lack of understand of what GDP is.
GDP measures spending.
That's why the article that started this thread explicitly says "borrowed and spent" every single time. Are you claiming that the borrowed money wasn't actually spent?
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Addicted to MacNN
Join Date: Jan 2003
Location: Great White North
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The more debt the higher the GDP because money owed is money borrowed or created money through the fractal reserve banking system. Banks have a much greater affect on GDP through the creation of money then the Government through its own borrowing. But if the government borrows 10 billion and only spends 1 billion, the effect on GDP is from the 1 Billion not the 10 billion as the other 9 billion is considered savings not spending.
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Blandine Bureau 1940 - 2011
Missed 2012 by 3 days, RIP Grandma :-(
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Clinically Insane
Join Date: Jun 2001
Location: planning a comeback !
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Originally Posted by Uncle Skeleton
He's complaining because "borrowing" isn't part of GDP, only "spending"
Seriously?
Yawn. This dude's a wacko. Does he think the Fed prints money just to stash it in Ben's basement. How retarded.
-t
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