On Jul 31, 2013, at 12:39 PM, Jim Devine wrote:
me:
the key question is whether or not the new measure of GDP is more
accurate than the old.
raghu:
No, I'd argue that the key question is whether or not the new
measure of GDP
is more RELEVANT than the old.
how do you define "relevant"? with either the new or the old GDP
measure, the number presents only production that's sold through the
market, ignoring non-market costs and benefits.
Adding internal corporate "R&D" to capital formation means including
tax-deductible expense (not production) in GDP even though none of it
is sold through the market, and adding those expenses to the profits
and capital stock. By explicitly including fictitious capital and
fictitious profit the whole GDP becomes only a little better than
fantasy. The dishonesty of the whole Obama public-relations apparatus
is clearly shown by the fact that no corporation will be required to
pay tax on those "profits." GDP was never meant to measure non-market
costs and benefits--now it no longer can even pretend to measure
marketable output!
Shane Mage
"Thunderbolt steers all things." Herakleitos of Ephesos, fr. 64
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