[QUOTE=DanBlather]
It’s complicated. Govt spending, particularly deficit spending, has a short term positive effect on the economy. Given a choice however,you are generally better off spending on non-military things. The multipler for defense spending is less than that for spending on doemestic infrastructure such as roads and bridges, education, research, etc.
[/QUOTE]
Without getting into the debate about whether war is ultimately an economic benefit or not (I think we agree - short term good, long term not so good), as I understand it the spending in Iraq is actually a substantial part of the GDP number per se, and thus the yearly growth figure.
That is to say, of the roughly 10 trillion USD GDP in 2005, some 100 billion is economic activity related to Iraq - absent this spending, the growth for the war years would be less than 3%.
War spending is economic activity, but it’s hard to argue that this is quality economic growth. When the war ends, the growth dissappears and the debt remains.
Any real life economists to confirm or contest this take on things ?
I’d say things are OK right now, but this won’t last for very long. the fact is, the USA is a nation built on debt: the trade deficit with China is > $185 billion this year. Most low income households have hegative net worth. Plus, the unfunded municipal and states pensions will kick in 5-10 years. Watch out!
[QUOTE=Sam Stone]
But it’s also true that the standard of living for the lower classes is improving, because they are getting improved benefits,
[/QUOTE] Could you provide a list of these improved benefits that the lower income jobs provide?
[QUOTE=David Simmons] Could you provide a list of these improved benefits that the lower income jobs provide?
[/QUOTE]
Sure. For example, Walmart provides health care benefits to over 1 million people. Walmart also matches an employee’s 401(k) contributions up to 4% of their salary. Walmart also subsidizes day care for employees, and has a good training program. There are also performance bonuses.
[QUOTE=Sam Stone]
Sure. For example, Walmart provides health care benefits to over 1 million people. Walmart also matches an employee’s 401(k) contributions up to 4% of their salary. Walmart also subsidizes day care for employees, and has a good training program. There are also performance bonuses.
[/QUOTE]
It sounds like WALMART offers a health plan that only about50% of its employees can afford. Employees make low enough wages that they can’t live on what would be left after taking out the relatively high premiums. So they pay what they can on their own for medical services and let the public pay for what they can’t afford. WALMART seems to have succeeded in externalizing yet another part of their costs.
And according to This site the company is in the process of shifting their expenses on health care and benefits around. The way I read it they are going to reduce their retirement costs by hiring more temps and the temps will be eligible for health insurance. However it looks to me like the cost of health insurance to the employee is high enough that the temps won’t be able to afford it out of a temp’s wage.
I don’t know how WAL*MART is in Canada, since your labor rules might be different from those in the US, but here they act like a predator.
[QUOTE=David Simmons]
I can’t cite and statistics because I’m not really sure of what statistics to cite. However, when the only people Will cites are from the American Enterprise Institute, I’m not a bit surprised that the claim is that workers are doing great.
I’m curious about your statement that outsourcing on the scale that we are seeing now has been going on forever.
[/QUOTE]
What exactly is your problem with the American Enterprise Institute? This sounds like another leftist debating trick. Instead of arguing the point just insult the messenger. So again, what exactly is wrong with the people at AEI? Please cite, or stop the ad hominem attacks. And, BTW, Will cites statistics in the article, not just opinions.
On the second point I never said that “outsourcing on the scale that we are seeing now has been going on forever.” I said it’s been going on forever. The economy has never existed on this scale before. So to say that “outsourcing on the scale that we are seeing now has been going on forever” would be as dumb as…as dumb as disqualifying anyone’s credibility because they work for AEI.
[QUOTE=Sam Stone]
I’m no fan of deficits, but by historical standards today’s deficit isn’t that big. It’s now projected to come in at 250 billion dollars for FY2006, way down from the earlier estimate of 318 billion. Why? Because government revenues are soaring.
So how does that stack up against historical averages? Have a look at this Deficit graph, in 1996 dollars. 250 billion in 2006 dollars is something like 220 billion in 1996 dollars. It’s been over 400 billion, and many times over 300 billion.
But a more critical number is the deficit as a percentage of GDP. Have a look at this chart: Deficit as % of GDP. The 40 year historical average for the deficit has been 2.3% of GDP. The current deficit is something like 1.9% of GDP, well under the historical average for the modern era. More importantly, the deficit is continuing to fall, while the economy is still growing at over 3%. So as a percentage of GDP, the deficit is dropping fast.
Look, I know Democrats pretty much have to say that the economy is horrible right now. What are they going to do, say it’s great? But we all know they are lying through their teeth. There is no way in hell you can spin 3.5% growth, 6 million new jobs in 3 years, surging revenues, low inflation, unemployment near historical lows, the stock market at record highs, and low interest rates as anything other than great.
It’s true that wages are stagnant on the lower end, but the reality is a lot more complex than a mere number. One of the reason wages are stagnant is because of competition from immigrants, both legal and illegal. They compete for jobs mainly at the lower end. But it’s also true that the standard of living for the lower classes is improving, because they are getting improved benefits, and the goods that make up a large chunk of their disposable income are actually deflating. Food, consumer electronics, and thanks to Wal-Mart, household staples, drugs, clothing, books, toys, and just about anything else they sell. Wal-Mart alone is responsible for knocking several percentage points off the inflation rate, and all that savings goes straight to the poor and lower middle class.
I’ll give you guys points for trying, through. It takes a lot of chutzpah to criticize the economy for having too many jobs available and too low an unemployement rate. Especially after liberal bitched about joblessness for the first few years of Bush’s presidency.
This is not to give Bush credit for all of it, or even the majority of it. But there is no question that we are in a very good economy right now. My business pays very close attention to the economy, and our internal financial guys think we’re doing awesome. And we set records in the last quarter for performance. And unlike governments, corporations don’t blow sunshine up their asses and try to fool themselves - the numbers are important because they dictate what we can expect to sell, and therefore what we can afford to produce. Our hard-nosed green eyeshade types see a very good near future, and an excellent current economy.
[/QUOTE]
The creative book keveping wins again. The deficit is like unemployment rates. Under reported and coverered up. http://www.brillig.com/debt_clock/ The real numbers are unknown to the public.Corporations like Enron with the help of Arthur Anderson dont blow smoke. BS They all do.
There is no surpluss of jobs. if you needed one you wouldnt be so condecending. You would face the reality. Bankrupsies and forclosure increases are signs of a good economy?
PS I dont blame Bush for the under reporting. There has been a long precedence for it. He just elevates the art a few steps
[QUOTE=Plan B]
What exactly is your problem with the American Enterprise Institute?
[/QUOTE]
For one thing, it’s staff includes Lynne Cheney, David Frum (the speechwriter who coined the dishonest phrase “Axis of Evil”), Newt Gingrich, Jeane Kirkpatrick, Michael Ledeen, Charles Murray (co-author of The Bell Curve), John Yoo (of the “unitary exectutive” theory) . . . Not names to inspire confidence.
[QUOTE=BrainGlutton]
For one thing, it’s staff includes Lynne Cheney, David Frum (the speechwriter who coined the dishonest phrase “Axis of Evil”), Newt Gingrich, Jeane Kirkpatrick, Michael Ledeen, Charles Murray (co-author of The Bell Curve), John Yoo (of the “unitary exectutive” theory) . . . Not names to inspire confidence.
[/QUOTE]
Same BS as above. Please stop the ad hominem attacks and tell us what’s wrong with each of those people. From what I know it sounds like the unifying principle is that they are conservative intellectuals, something that threatens the world view of people who think that conservatives can’t read.
But more important, when you’re done tell us what’s wrong with the stats cited by George Will.
[QUOTE=Plan B]
Same BS as above. Please stop the ad hominem attacks and tell us what’s wrong with each of those people. From what I know it sounds like the unifying principle is that they are conservative intellectuals, something that threatens the world view of people who think that conservatives can’t read.
But more important, when you’re done tell us what’s wrong with the stats cited by George Will.
[/QUOTE]
Well, I don’t know anything about the quality of the AEI, but I still haven’t seen any response to my comments regarding the growth /GDP figures. As best I can tell, current growth is largely constituted by increased government spending. To some degree this can be a healthy thing (as any socialist will tell you).
I’d like to see some real numbers if anyone has them, but from what I can glean, war spending, which I very roughly estimate at 1% of GDP is skewing the GDP figures for the last few years. If we discount Iraq dollars, growth is currently slower than the 80’s and 90’s.
Also, as other posters have mentioned, the averages are not calculated over comparable durations.
Overall, the indicators don’t look that great to me - the growing double deficit, huge increase in the price of imported goods (oil) - but I’d be interested in hearing what any SDMB economists have to say.
Overall, the indicators don’t look that great to me - the growing double deficit, huge increase in the price of imported goods (oil) - but I’d be interested in hearing what any SDMB economists have to say.
[/QUOTE]
Well, IANAE either but I can assure you that the federal deficit is not growing and the trade deficit has never been a problem in history and isn’t now. As for the huge increase in oil costs, most economists will telll you that that’s one thing that makes this economy even more impressive.
I’m also pretty sure that total military spending is at a relative low right now, certainly should be low compared to recent decades.
If you’re losing sleep over the economy you might want to read the following article:
[QUOTE=Plan B]
What exactly is your problem with the American Enterprise Institute?
[/QUOTE] AEI has a political agenda as one of the leading voices supporting the neocons that formulate US foreign policy, such as the Bush Doctrine. It has a vested interest in making the economic policies of the present administration look as good as possible.
All of the above is prefectly legitimate but it does raise questions in my mind as to their evenhanded analysis and presentation of economic data.
[QUOTE=Themenin]
I’d like to see some real numbers if anyone has them, but from what I can glean, war spending, which I very roughly estimate at 1% of GDP is skewing the GDP figures for the last few years.
[/QUOTE]
Though I do have an economics degree, I’m not a practicing economist (though I do read it often). Besides, Sam Stone typically beats me to these threads and I don’t have anything useful to add. However, I will comment on this. Your use of cost, in relation to growth, is not the typical analysis one does to analyze an economy. When you use this statement, for instance:
Why exactly are you discouting Iraq dollars? Discounting them against what? You need some sort of inflationary measure or basket of goods to do the discounting. However, no one has made that claim or provided that resource for analysis.
Furthermore, back to my first point, what you are asking essentially is: “If I spend X, how does that make Y grow?” I can totally see where you are coming from, but the economic indicators that are typically trotted out in these threads are measurements of som degree to be measured against each other. What you’re asking for is something found in finance/investment, i.e. “If I put $100 into my mutual fund, what is my expected return for the year?”
You’re asking about a cost, and that’s just it, it’s a cost. The military cost includes all costs (paid, as in funds sent to). So, cost, therefore, is a function of budget, as in, how much money is being sent in, or out.
GDP is not a budgetary number. Well, not in the OMB sense. GDP isn’t the amount of money the country has on hand, but an agreed upon economic indicator that measures the final market value of all goods and services in the economy.
So, to answer your question, there is some expenditure by the US government that makes its way into the GDP, but that amount is going to have components that aren’t measured into the fair market value of goods and services. So, economists use goverment spending as a separate component in GDP.
The formula for GDP = consumption + investment + government spending + (exports − imports). Note, it doesn’t say military spending, which would be a subset of government spending. If you’re assuming 1% military spending, then, by the very definition of GDP, military spending is very small compared to the overall growth of the economy. That is, unless of course, you meant that of the GDP growth (percentage wise), 1% is from military spending. However, no economist breaks down percent growth into the components (like the way I just laid out above).
[QUOTE=gonzomax]
If the economy is growing and you are on the receiving end it is good. Assuming you dont care about your fellow Anmericans.
[/quote]
Ahhh, yes. If you think the economy is doing well, then you’re selfish and unpatriotic. Right. :rolleyes:
It doesn’t go straight to the very wealthy. I thought we’d already established that. If not, I’ll need a cite. Because even your Greenspan article says that the money is spread out to more than the very wealthy.
What’s inaccurate about it? Can you please explain?
I’d ask for a cite, but the status of the want ads in Detroit doesn’t really show anything about the economy as a whole.
First of all, I seriously doubt that there are fewer want ads now than 7 years ago.
Second, even if there were fewer want ads, that’s probably at least in part due to the growth of on-line listings. Did you include Monster.com, etc., in your calculation of want ads?
Third, even if there are fewer jobs in Detroit than 7 years ago – which I have not yet seen any evidence of – it’s probably unfair to judge the state of the economy as a whole by looking at Detroit’s unemployment rate. In fact, Detroit’s unemployment rate is one of the worst in the nation. The national economy should be judged by looking at the national economic statistics and indicators.
I thought higher wages was a good thing. Sounds to me like the economy is working in the manner it’s supposed to work.
I don’t mean to be flip, but I don’t understand your point here. Are you suggesting that there’s no way to tell whether or not the economy is doing well? If so, then on what are you basing your judgment that the economy is not doing well?
[QUOTE=mazinger_z]
Why exactly are you discouting Iraq dollars? Discounting them against what?.. That is, unless of course, you meant that of the GDP growth (percentage wise), 1% is from military spending. However, no economist breaks down percent growth into the components (like the way I just laid out above).
[/QUOTE]
Careless wording on my part. I should have said ‘excluding’ not ‘discounting’ (you’re right, I would have no idea what multiplier to use). What I’m saying is that (pulling numbers out of my ass here) 2002 GDP is 10 trillion, 2003 GDP is 10.3 trillion growth is 3%
But the 10.3 trillion includes 100 billion one time war expenditure, which creates no long term benefit and does show up in the other column as debt which will need servicing in future years. Although the war does create some real economic activity, is it fair to trumpet 3% growth, when 1/3 of the apparent growth is attributable to the war, and not only not sustainable, but will be creating debt pressure in the future.
I believe this is one of the usual criticisms of using GDP to measure growth, but I’m not too sure about the numbers involved.
[QUOTE=Plan B]
What exactly is your problem with the American Enterprise Institute?
[/QUOTE]
Other than that they are a partisan outfit who will manipulate numbers to suit their agenda? Not very much.
Here’s the kind of crap that they pull. In the article that George Will references, one of their statements used to defend Bush’s economic policies is:
[QUOTE=Manipulative panty-waists at the AEI, under the watchful eye of FoS (Friends of Scaife)]
The data also reject the view that we are evolving toward an economy that is less friendly toward the middle class. Indeed, the rate at which consumption by the middle class is increasing has accelerated in recent years. The average annual consumption growth for the middle class was less than 1 percent in the period from 1990 to 1994, rose to 1.5 percent in the period from 1995 to 1999, and jumped to more than 2 percent in the period from 2000 to 2005. The middle class is even doing better than the upper crust: The growth of their consumption expenditures exceeded the growth rate in the highest income category between 2000 and 2005. Consumption is becoming more equal across these income classes.
[/QUOTE]
They are attempting to show that the numbers are far better under Bush than the final years under Clinton. For those who pay close attention to the bolded part, you’ll notice something a bit odd. That’s right, Bush wasn’t president in 2000.
Now, let’s look at the actual consumption-change-percentage numbers used by the authors:
Oops. It seems they forgot to give 2000 to Bill and gave it to Bush. Thanks to that extremely high consumption number courtesy of Bubba, we do indeed average slight over 2% (2.04%). Of course, on the opposite end, they took that big number away from Bubba to get the 1.5% they use in comparison to Bush, which if added in should increase the final Bubba numbers by almost a percentage point. Now, we take that number away from the W, and we get 1.46%. That’s even lower than the falsified number that they attributed to Clinton, and far lower than the actual number under Clinton.
Is it still an ad hominem to call them lying sacks of shit? How about cherry-picking, Scaife-fellating dickweeds?
[QUOTE=DMC]
Other than that they are a partisan outfit who will manipulate numbers to suit their agenda? Not very much.
Here’s the kind of crap that they pull. In the article that George Will references, one of their statements used to defend Bush’s economic policies is: They are attempting to show that the numbers are far better under Bush than the final years under Clinton. For those who pay close attention to the bolded part, you’ll notice something a bit odd. That’s right, Bush wasn’t president in 2000.
Now, let’s look at the actual consumption-change-percentage numbers used by the authors:
Oops. It seems they forgot to give 2000 to Bill and gave it to Bush. Thanks to that extremely high consumption number courtesy of Bubba, we do indeed average slight over 2% (2.04%). Of course, on the opposite end, they took that big number away from Bubba to get the 1.5% they use in comparison to Bush, which if added in should increase the final Bubba numbers by almost a percentage point. Now, we take that number away from the W, and we get 1.46%. That’s even lower than the falsified number that they attributed to Clinton, and far lower than the actual number under Clinton.
Is it still an ad hominem to call them lying sacks of shit? How about cherry-picking, Scaife-fellating dickweeds?
[/QUOTE]
Well you certainly made the point that the liberals are the more compassionate group this year. I’m touched by how respectful you are of people who disagree with you. Just more stifling of dissent, if you ask me. And no doubt this is the kind of stuff that the Republicans love to circulate at this time of year to get the base to keep things in perspective. “Sure, stay home on Election Day. Just don’t come crying to me when people like this are in power.”
Anyway, I’m not sure if your post is cherry-picking or you actually failed to read the title of the article. It wasn’t about Bush vs. Clinton. It was about trends in income growth. I don’t think the article mentions Clinton even once and only mentions Bush in the first sentence, as a kind of attention grabbing tactic. The authors are making the point that consumption is growing, which means that people are consuming more, which is a good thing. And by your admission they give credit to the Clinton years. But it’s not about Democrat vs Rebublican administrations. They’re just saying that Americans are doing better, which we are. So there’s absolutely nothing wrong or dishonest with grouping 2000 with 2001 and 2002.
I will grant you one point though. They may have been trying to make the point that growth is accelerating. But that’s what social scientists do. As we’ve proven already, it’s not rocket science, it’s much more complex.
BTW, thanks for the stimulus to go to the source. I hadn’t been to the AEI web site in months and had forgotten how much scholarly and readable info they make available for free. (Hmmm, maybe that’s where Sam Stone gets his stuff.) It must have taken a lot of work to find something that appeared to be inaccurate.
[QUOTE=Plan B]
Well you certainly made the point that the liberals are the more compassionate group this year.
[/QUOTE]
When the people I vote for start indiscriminately killing people, feel free to question my compassion.
I’m perfectly respectful of people who disagree with me. Hell, Sam Stone and I probably haven’t agreed on anything other than that people shouldn’t eat puppies, but I doubt he’d agree with you on whether that has any affect on my respect for him. I have absolutely zero respect for FoS funded mouthpieces posing as experts, on the other hand.
The day I become a mod (fat chance) and delete your posts, then you can accuse me of stifling dissent. Hell, I welcome dissent, especially when it consists of claims based on bogus numbers.
Waah.
I read it far closer than you appeared to have.
Sure it was. You need to learn the code words, such as “populist”, or be familiar with the author’s other works. He’s a prolific little bugger, and quite odd for an economist, has a hard time writing an article that isn’t political in nature, but hey that’s what FoS pays him to write.
The trends aren’t what you seem to think they are.
Except that it’s not growing in the manner they’d like for you to believe, nor for the reasons they want you to believe.
No, by my admission they take one of Clinton’s best years for consumption and try to get the reader to attribute it to Bush. Seems to have worked on you.
Of course there is. They use numbers from 2001 forward when discussing overall consumption, but knowing that they’ll get called on who is doing the consuming, they decide to focus on the middle class. When they make that switch, they start in 2000 instead, in order to get numbers that actually look decent on average.
Here’s a little poor man’s graph of the numbers they used (sorry, but us populists can afford real graphs):
I don’t see much growth. Hell, the best percentage increase he’s had was due to having an exceptionally crappy year before that. By the same token, I look like Brad Pitt when standing next to Quasimodo.
Any time. If you’d like more web-sites that will tell you what you want to hear, might I recommend you look for any “think-tank” that is funded by Scaife, Bradley, Koch, Olin, Coors, Carthage, etc (usually all of them together). You’ll find them all quite scholarly and readable.
By the way, you never did tell us your take on the effects of the 2001 and 2002 tax cuts. You just used 2003. How’s that response coming along?
Themenin: I did a bit of checking around about the question of how much of the recent growth is attributable to defense, and it’s a piece, a significant piece in a couple of years, but not the whole thing or even close by any stretch of the imagination.
Raw figures below:
Year GDP Defense GDP Chg Def Chg DC*M % No M % With M
2000 9,817.0 294.5
2001 10,128.0 305.5 311.0 11.0 16.94 0.035 0.054
2002 10,469.6 348.6 341.6 43.1 66.374 0.126 0.194
2003 10,960.8 404.9 491.2 56.3 86.702 0.115 0.177
2004 11,712.5 453.7 751.7 48.8 75.1212 0.065 0.100
2005 12,455.8 450.6 743.3 -3.1 -4.7432 -0.004 -0.006
To explain, the GDP (column 2) is in current dollars, since that’s how the defense budget (column 3) is quoted. Column 4 is the change in GDP from one year to the next, column 5 is the change in defense spending (ex Iraq & Afghanistan) from one year to the next, column 6 is the amount times a multiplier - how much the additional expenditure can be expected to increase overall economic activity, which instead of pulling out of my ass, I pulled out of this guy’s, 'cause he sounded like he had a clue, (multiplier used is 1.54, for all you geeks) column 7 is the percent that the increase in defense was of the increase in GDP without the multiplier, and finally column 8 is that percent with the multiplier.
You can disregard 2005, since the defense figure for that year is an estimate, and is obviously, um, erm, not reflective of reality. (CDI guesstimates 2005 at 495 bil or so, which may or may not be more reflective of reality.)
So anyway, 2002, not surprisingly, is the year when defense accounted for the most in terms of its percentage contribution to GDP. Note as well that the figure would be higher by a lot if we threw in Iraq and Afghanistan, both of which substantially increase the budget. My guess is that you could probably account for 20% of the change in GDP in both 2002 and 2003, at minimum, with expenditures for these wars included. All of the post-2001 figures are substantially higher than the 5.4%, at most, that they accounted for in the last Clinton year of 2001; Bush’s first budget is the 2002 one (this goes by fiscal, not calendar, years).
Which is my sweet, subtle way of pointing out that Clinton did it without the use of steroids. In this little comparison, sports fans, Clinton = Aaron, Dubya = Bonds.
[QUOTE=DMC]
Here’s a little poor man’s graph of the numbers they used (sorry, but us populists can afford real graphs)
[/QUOTE]
That should be “can’t afford real graphs”, of course.
Could you provide a list of these improved benefits that the lower income jobs provide?
