On Sep 17, 2008, at 11:47 PM, Sabri Oncu wrote:
Jim:
GDP is supposed to be the gross domestic Product, i.e., the amount of
goods and services newly produced during in a country (and sold
through markets) during a given year. If private debt appears as
part
of GDP, it would only be the amount of labor services provided to
allow loans to occur. But that's not part of GDPI, which refers only
to the purchase of newly produced goods.
We know these Jim. But, think about the newly produced debt Michael
mentioned in his example: a bet on that the San Francisco 49ers will
win the next two Super Bowls. Is this a "good" or a "service?" I don't
know. But it is something newly produced and sold through markets.
What is this bet and why does it not show in the GDP?
Think about Las Vegas or any other casino. The amount *bet* at the
roulette table (each bet is the "purchase" of a "service"--the chance
to win) is always nineteen times the amount taken by the House to pay
for wages, profits, interest, rent, supplies, etc. With "fair" bets
winnings and losses exactly offset each other, leaving no net income
to go into the National Income Accounts no matter how many trillions
flow between the bettors. That eighteen/nineteenths of the amount bet
is the "fair bet" portion of the gamble.
Shane Mage
"Thunderbolt steers all things...it consents and does not consent to
be called Zeus."
Herakleitos of Ephesos
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