So you think the Panic of 1907 might cause the increase in the use of the word “depreciation” for 14 years and “economics” for 25 years? Interesting!
There were 8,000 cars in the US in 1900 and 100,000 horses in New York City. The Model T was introduced in 1908 and 1912 is the year that the number of motor vehicles exceeded the number of horses in NYC. How many Model-Ts were manufactured by the time they were discontinued despite the Panic of 1907? Oh yaeh, they started producing the Model T after the Panic. It was a real show stopper.
That is part of our problem with economics, money is portrayed as more important than all of the stuff.
I know you find this impossible to imagine, but depreciation is used in business every day. Lots and lots and lots of things are depreciated. Depreciation of consumer vehicles is an interesting but totally minor example. It would have been virtually negligible in 1908.
You’ve been spending all this energy on an issue that doesn’t exist for anyone else, while ignoring 99.9% of reality.
References to “depreciation” soar beginning in 1909, and remain high, because that is the year the United States adopted its first corporate income tax.
Before that, business depreciation was a matter between a company and its investors. Before 1909, a company could report depreciation any way it wanted, as long as it wasn’t consciously defrauding investors. After 1909, depreciation affected taxable income, so the government got involved, in specifying what a business could and could not depreciate, and how quickly. The issue drew a lot more attention and discussion, and has ever since.
I have no idea why you are attributing this to Model T’s, but you are wrong.
And you choose to ignore what I have actually been saying about depreciation. I said economists ignore the depreciation of DURABLE CONSUMER GOODS. I did not say they or anyone else did not know about depreciation of any kind. My point is that the quantity of durable consumer goods has increased vastly since 1908. It has been 108 years. So ignoring that depreciation now and for the last 50 years is what has been ridiculous.
There were 200,000,000 cars in the US in 1995. At $1,500 per car per year that would be $300,000,000,000. Was that 0.01% of the GDP back then? Of course that does not include air conditioners, televisions, computers, etc.
The NET Domestic Product equation only subtracts the depreciation of Capital Goods, so it is an 8th grade algebra problem.
I do not see you saying that the $1,500 depreciation per car per year on 200,000,000 cars is incorrect only that it is OK for economists to ignore it. But when and where did economists make this decision and tell everyone? Even if the $1,500 is not the best estimate then a better one would have to be provided and the principle would still apply. More than a hint.
Your response is nothing but: Ignorance is Bliss
Everyone should believe what they are told even when obviously simple information is left out.
But then people want to keep having arguments about economics. No wonder they cannot be resolved.
