Daniel Quinn wrote:It is not possible to grow GDP without borrowing .
GDP is no indicator of economic succees because it includes borrowing - so the more you borrow the higher your GDP. Personally I prefer balance of payments as an indicator but that has been negative for years so no-one ever mentions it any more.
I actually agree with DQ re supply/demand - it really isn't that simple but I suppose that they have to make it strightforward for O level ior whatever. A bit like saying light is a particle and a wave in Physics.
SteveTheShadow wrote:Thatcher began this with right to buy, selling off public assets and destruction of the manufacturing base and the creation of the post industrial society.
Just a slight correction to a factual inaccuracy since the rest of your post is opinion and fair enough. Thatcher did not 'destroy the manufacturing base' of this country, despite what you may have read in the Socialist Worker back in 1987. Manufacturing output in this country is higher than it ever was and, a few minor blips aside, has continued to increase since the start of the industrial revolution. It just employs a lot less people than it used to; this is entirely due to technological advances.
This is absolute nonesense . But for me to explain why you need to be more precise , you switch from base to output as if they were the same thing .
so - what do you actually mean by manufacturing output ?
Daniel Quinn wrote:It is not possible to grow GDP without borrowing .
GDP is no indicator of economic succees because it includes borrowing - so the more you borrow the higher your GDP. Personally I prefer balance of payments as an indicator but that has been negative for years so no-one ever mentions it any more.
I actually agree with DQ re supply/demand - it really isn't that simple but I suppose that they have to make it strightforward for O level ior whatever. A bit like saying light is a particle and a wave in Physics.
It was A level, and this was back in the '70s, when an A level was about the same level of difficulty as a PhD is these days.
GDP by definition can not include borrowing as it is the total value of all goods and services . it does however not deduct borrowing upon which these good and services may be made possible
SteveTheShadow wrote:Thatcher began this with right to buy, selling off public assets and destruction of the manufacturing base and the creation of the post industrial society.
Just a slight correction to a factual inaccuracy since the rest of your post is opinion and fair enough. Thatcher did not 'destroy the manufacturing base' of this country, despite what you may have read in the Socialist Worker back in 1987. Manufacturing output in this country is higher than it ever was and, a few minor blips aside, has continued to increase since the start of the industrial revolution. It just employs a lot less people than it used to; this is entirely due to technological advances.
This is absolute nonesense . But for me to explain why you need to be more precise , you switch from base to output as if they were the same thing .
so - what do you actually mean by manufacturing output ?
Ah yes fair point - manufacturing base is a bit more ephemeral. We don't build many ships any more that's true, but there are new manufacturing industries that were not around or thought of 50 years ago - computer software is an example.
I believe GDP includes Government spending, some of which is borrowed money.
'Gross Domestic Product - GDP' The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis.
gdp does not include spending , it includes the montary value arising out of this spending , it is value added not actual money .
"This is possible because GDP is a measure of 'value added' rather than sales; it adds each firm's value added (the value of its output minus the value of goods that are used up in producing it). For example, a firm buys steel and adds value to it by producing a car; double counting would occur if GDP added together the value of the steel and the value of the car.[3] Because it is based on value added, GDP also increases when an enterprise reduces its use of materials or other resources"
given the complexity of our economy these days I am fucked if i know what it actually measures .
For instance solicitors accounts work on W.I.P , ie work in progress . which the value of all fee earning hours recorded by a firms lawyers . This can be used to calcuate VAT and other liabilities/values . However , not all WIP can be transferred in to cash, you may lose a case or a paying party could reduce your bill cause it is unreasonble . How does one calculate gdp of a firm ?
You can calculate GDP by the amount spent on goods and services. That includes what the government spends and if the Government borrowed the money it spent - well there you go. So if a Governemt decided to throw caution to the winds borows an extra 100 bilion and build houses or buys fighter planes (it is a bit like Brewster's Millions in that you have to get value for the spending - paying it out as welfare/benefits doesn't count) then GDP will go through the roof. So it is a piss-poor economic indicator I agree, not sure why we got onto it now.
GDP for a company is roughly speaking its turnover. Plenty of companies turn over millions but make a net loss so a large turnover is no indicator of success.
go along to Office National stats and see how they calculate it for the government , it will hurt your head and you will be left wondering what are we actually measuring and what is the bloody point .
it a measurement and it is therefore bollocks .
Last edited by Daniel Quinn on Mon Aug 03, 2015 4:09 pm, edited 1 time in total.
