2010q1 14601.42009q4 14453.82009q3 14242.12009q2 14151.22009q1 141782008q4 14347.32008q3 14546.72008q2 14497.82008q1 14373.92007q4 14337.92007q3 14179.92007q2 13997.22007q1 13795.62006q4 13611.52006q3 13452.92006q2 13347.82006q1 13183.52005q4 12915.62005q3 12741.62005q2 12516.82005q1 12379.52004q4 12144.92004q3 11950.52004q2 11778.42004q1 11597.22003q4 11416.52003q3 11255.72003q2 11008.12003q1 10888.42002q4 10766.92002q3 10701.72002q2 10601.92002q1 10498.72001q4 10373.12001q3 10305.22001q2 10301.32001q1 10165.12000q4 10129.82000q3 10017.52000q2 9949.12000q1 9709.51999q4 9607.71999q3 9405.11999q2 9252.61999q1 9148.61998q4 9027.5Up 62% from 1998q4

Isn't about $1.0 to $1.4 trillion of that GDP value due to the massive government deficit?

So what? Do you really think things are so great just now? Some economists (of the rare non-high priest variety) have suggested that we need to consider other measures of well-being in addition to GDP. Perhaps the most notable person behind this movement is Joe Stiglitz. One of many problems with GDP is that non-productive and even 'bad' things are counted in it. For example, the gasoline that you and others burn while wasting time stuck in traffic jams adds to GDP. Think about that for a minute. Other valuable unpaid things aren't captured at all.

QuoteOriginally posted by: DavidJNFor example, the gasoline that you and others burn while wasting time stuck in traffic jams adds to GDP. Think about that for a minute.If you have ever run out of gas in a traffic jam, I think you might change your mind about its value.But what you want is a sex index. A red wine and sex index. Then again, I don't know how many people would be willing to run out of gas in a traffic jam in exchange for a quick one.

QuoteOriginally posted by: DavidJNSo what? Do you really think things are so great just now? Some economists (of the rare non-high priest variety) have suggested that we need to consider other measures of well-being in addition to GDP. Perhaps the most notable person behind this movement is Joe Stiglitz. One of many problems with GDP is that non-productive and even 'bad' things are counted in it. For example, the gasoline that you and others burn while wasting time stuck in traffic jams adds to GDP. Think about that for a minute. Other valuable unpaid things aren't captured at all.No doubt GDP seems flawed. If I cook a steak dinner, eat it, and clean the dishes, the contribution to GDP is just the cost of the ingredients. If I eat a steak dinner at a restaurant, the contribution to GDP is the cost of the ingredients, cooking labor, servicing labor, cleaning labor, rent on the building, etc. To the extent that people shift from self-sufficiency to buying goods and services, GDP will increase. That seems wrong, but it may not be if one looks at GDP as a measure of how much people are willing to give to strangers in economic/market transactions to gain utility (e.g., get a hot cooked meal). Even the gas "wasted" in traffic jams is a valid component. If it costs me $50 to eat at a downtown restaurant, it matters little that some of that money went to gasoline.That one could reduce the inefficiency of traffic jams (by building more roads, buying more fuel-efficient vehicles, changing land-use policies to encourage greater density of mixed commercial-residential developments) is a separate issue that is part of the complex estimation of CPI-adjusted GDP.What is truly ill-measured by GDP is the time spent on economic and market activities such as the added time to ride the bus/subway, maintain tax records, or wait in lines at stores.

QuoteOriginally posted by: Traden4AlphaWhat is truly ill-measured by GDP is the time spent on economic and market activities such as the added time to ride the bus/subway, maintain tax records, or wait in lines at stores.Suppose I agree to buy five hotdogs from you for $1 each. Now suppose I have to wait in line for each hotdog. I instead agree to buy two hotdogs for $.75 each.As long as there is a full spectrum of competing opportunities for both of us, it seems that our economic surplus - meaning the amount over what we paid that we might have been willing to pay - does not change. Because originally the hotdogs gave me 1 more cent economic surplus compared to buying potato chips in the lobby. The remaining two hotdog transactions get me 1 cent more than potato chips in the lobby where the surplus has not changed, and I add three potato chip transactions.Therefore, the difference in the revenue from hotdogs sold is not only very close to the cost of waiting in line, but also is very closely replaced by alternative transactions in potato chips. So as this cost of waiting in line or in traffic drops, it seems plausible that GDP would rise by an amount that is pretty close, if slightly less.

QuoteOriginally posted by: farmerQuoteOriginally posted by: Traden4AlphaWhat is truly ill-measured by GDP is the time spent on economic and market activities such as the added time to ride the bus/subway, maintain tax records, or wait in lines at stores.Suppose I agree to buy five hotdogs from you for $1 each. Now suppose I have to wait in line for each hotdog. I instead agree to buy two hotdogs for $.75 each.As long as there is a full spectrum of competing opportunities for both of us, it seems that our economic surplus - meaning the amount over what we paid that we might have been willing to pay - does not change. Because originally the hotdogs gave me 1 more cent economic surplus compared to buying potato chips in the lobby. The remaining two hotdog transactions get me 1 cent more than potato chips in the lobby where the surplus has not changed, and I add three potato chip transactions.Therefore, the difference in the revenue from hotdogs sold is not only very close to the cost of waiting in line, but also is very closely replaced by alternative transactions in potato chips. So as this cost of waiting in line or in traffic drops, it seems plausible that GDP would rise by an amount that is pretty close, if slightly less.A very good point! People do pay for convenience which is often a form of time-savings. Apple's ability to charge a premium for it's software and hardware probably arises from this phenomenon -- Apple owners spend more money, but spend less time to gain the utility of a working computer.

The US deficit was used to promote jobs and growth. They achieved it, they won the bet!

QuoteOriginally posted by: BullBearThe US deficit was used to promote jobs and growth. They achieved it, they won the bet!If you spend infinite amount of money in arbitrary way, bend existing rules, and manipulate numbers a lot, you'll achieve some "jobs" and "growth". Question is, are these jobs and GDP increases sustainable and whether your spendings were rational or not. As i mentioned in another thread, cost of bailout is officially put at roughly $10T. Official number of unemployed today is 15 mln people. I could have just given $700K to every unemployed person and have zero unemployment and much higher growth numbers. I think even if i spent $1T by giving $70K to everyone, I'd do better. I could be doing this for 10 years for the same cost.When government spends something it doesn't come out of thin air. It's future taxes and benefit cuts that you are spending. It's social security and medical benefits that you and your children will never see in your life if you are younger than 50. It's everyones retirement age moved far down. These are bets i am ready to back up with real money. It's also hidden losses from bets in place that just haven't come out to roost yet. Only Fannie and Freddie on balance sheet and off balance sheet liabilities are $6.8T, and today they are US government liabilities. It's an order of magnitude of total official US debt. US government is in over its head in humongous shitty bets, it hasn't won any bets except some rounding errors, manipulated official statistics, and stock market pumped with free money instead of expectation of real growth.

Zerdna is right. Much of the public and private debt in the US was spent on short-term consumption rather than long-term investment in productive capacity. That debt may have created jobs but those jobs will only last as long as the system is allowed to roll debt to ever-higher levels.There's also a metric buttload of losses sitting in the system in the form of houses sitting on bank's balance sheets and houses that will soon be sitting of bank's balance sheets (foreclosure cycle times are running longer than a year). Meanwhile, Freddie, Fannie, and FHA are behind 96.5 of all new mortgages which suggests that new mortgages may generate net losses.Much of the response to this crisis in the US and EU has made the assumption that it is a transient event in which hiding bank's paper losses will enable a V-shaped bounce to recoup the dip in prices. But if the problems are more structural (i.e., people, assets, and economies that aren't sustainably productive), then these thin air manipulation will only exacerbate the damage and create a much larger collapse in the future.

QuoteOriginally posted by: Traden4AlphaMuch of the response to this crisis in the US and EU has made the assumption that it is a transient event in which hiding bank's paper losses will enable a V-shaped bounce to recoup the dip in prices. But if the problems are more structural (i.e., people, assets, and economies that aren't sustainably productive), then these thin air manipulation will only exacerbate the damage and create a much larger collapse in the future.What's a good 10 year plan in your opinion?

QuoteOriginally posted by: CuchulainnQuoteOriginally posted by: Traden4AlphaMuch of the response to this crisis in the US and EU has made the assumption that it is a transient event in which hiding bank's paper losses will enable a V-shaped bounce to recoup the dip in prices. But if the problems are more structural (i.e., people, assets, and economies that aren't sustainably productive), then these thin air manipulation will only exacerbate the damage and create a much larger collapse in the future.What's a good 10 year plan in your opinion?I say, hearty scones & brisk tea for breakfast, champagne & caviar for a light luncheon, and a few pints of Guinness for dinner, what?***But seriously, the best plan may well be what they are doing. The financial systems of the world still contain serious unrealized losses in the form of bad debts or unsustainable liabilities that sit on the balance sheets of banks, governments, pension funds, etc. Realizing and absorbing these losses would create a clean slate but be extremely painful. Unfortunately, the legal operating structures for allocating these losses to shareholders, bondholders, pensioners, etc. aren't very forgiving because they involve draconian acts such as seizure of collateral, defaults, bankruptcies and other events that don't exactly breed confidence in banks, markets, and economies.The only entities that do have a somewhat softer means of defaulting on bad debts are sovereigns with fiat currencies who can inflate their way out of debt. This strategy is denied the Greeks et al and may not even be likely for the EU as a whole given Germany's vehement opposition to inflation. Nor does inflation forestall the worst of the unsustainable liabilities because social programs such as retirement include cost-of-living adjustments that automatically inflate with the currency.But if accounting legerdemain, QE, and regulatory blind-eyes let profits fill-in the unrealized losses, then that provides a first-line of defense with less pain than any of the more Darwinian approaches. The only problem is that if the losses can't be absorbed by individual banks and they migrate up to sovereign levels, then the effects can be much worse. I'd rather see a few banks collapse than have a sovereign collapse. As bad as a run-on-banks looks, a run-on-countries seems worse.