4 ms·

Who are you to say that a person eating poop doesn't create $20k of value? Someone did, after all, pay them $20k to do it...

llukas 9y ago
GDB increased yet still A and B at the end have both $20k same as when they started.
- skj 9y ago
  Ah, the little-known poop-eating income tax loophole...
  - zo1 9y ago
    That's a very good point to make in this entire thing. They both earned 20K, therefore they should each pay x% of those earnings over to the government due to income tax. Does that lead anyone into conspiracy-theory territory regarding why government seeks to increase GDP? Other than the obvious benefit of having Yet Another Silly Variable to optimize through various programs and policies?
- epistasis 9y ago
  Yes, because ultimately GDP aims at measuring the value of the performance. What is the value of a dollar, anyway? The only reason this example would be odd is if the person paid the $20k for something they did not want. Which would mean that they did something they did not want to do, perhaps under duress? The presupposition of the GDP is that (except for things like taxes), the transactions measured are things that individuals want to do, and they get something out of that transaction that they value in dollar amounts. The total amount of dollars at the end is irrelevant, and who has them, is less important. The failure of the GDP is where people get "value" and the amount of value does not correspond to the dollars exchanged.
  - TheCoelacanth 9y ago
    But there is also presumably value lost by the people performing, otherwise they probably wouldn't have had to be paid so much for the performance. Let's say that the two people absolutely wouldn't have done the performance for less than $15k and absolutely wouldn't have paid more than $25k to see the other performance. Then one person is giving up $15k of value to get $20k of value for a net of +$5k and the other giving up $20k of value to get $25k of value for a net of +$5k, so it is really only a creation of $10k of value per performance while the GDP increase is $20k.
- ewjordan 9y ago
  If you live paycheck to paycheck, then you have the same amount of money at the end of the year as you did at the beginning. Does that mean you didn't participate in the economy?
- tedsanders 9y ago
  This is a common misconception that I think is worth highlighting. Economic production does not increase the money supply. No matter how much economic value you create in a transaction, the amount of money in the economy is constant (putting aside the activities of the Fed, Mint, and banks).

llukas 9y ago

GDB increased yet still A and B at the end have both $20k same as when they started.

skj 9y ago
Ah, the little-known poop-eating income tax loophole...
- zo1 9y ago
  That's a very good point to make in this entire thing. They both earned 20K, therefore they should each pay x% of those earnings over to the government due to income tax. Does that lead anyone into conspiracy-theory territory regarding why government seeks to increase GDP? Other than the obvious benefit of having Yet Another Silly Variable to optimize through various programs and policies?
epistasis 9y ago
Yes, because ultimately GDP aims at measuring the value of the performance. What is the value of a dollar, anyway? The only reason this example would be odd is if the person paid the $20k for something they did not want. Which would mean that they did something they did not want to do, perhaps under duress? The presupposition of the GDP is that (except for things like taxes), the transactions measured are things that individuals want to do, and they get something out of that transaction that they value in dollar amounts. The total amount of dollars at the end is irrelevant, and who has them, is less important. The failure of the GDP is where people get "value" and the amount of value does not correspond to the dollars exchanged.
- TheCoelacanth 9y ago
  But there is also presumably value lost by the people performing, otherwise they probably wouldn't have had to be paid so much for the performance. Let's say that the two people absolutely wouldn't have done the performance for less than $15k and absolutely wouldn't have paid more than $25k to see the other performance. Then one person is giving up $15k of value to get $20k of value for a net of +$5k and the other giving up $20k of value to get $25k of value for a net of +$5k, so it is really only a creation of $10k of value per performance while the GDP increase is $20k.
ewjordan 9y ago
If you live paycheck to paycheck, then you have the same amount of money at the end of the year as you did at the beginning. Does that mean you didn't participate in the economy?
tedsanders 9y ago
This is a common misconception that I think is worth highlighting. Economic production does not increase the money supply. No matter how much economic value you create in a transaction, the amount of money in the economy is constant (putting aside the activities of the Fed, Mint, and banks).