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Yeah ok so here you go. Philosophically, GDP is an useful economic metric because it proxies economic activity and in your framework, economic activity is up,

• WillPostForFood 4y ago
  Dude, you have it 100% backwards, going all the way back to your first point. I feel like you aren't reading, aren't understanding, or something (d.k.?). in your framework, economic activity is up, we are just paying for it via trade imbalance Wrong, I don't have a framework. I am just trying to explain to you how GDP is calculated. Economic activity is down when measured used GDP. Your original post misunderstands GDP. I am not being pedantic, it is just incorrect: Ok, let's play your game. How much of the first quarter decline was due to the ports clearing and imports rising? Here, I'll give you a hint (More than 100%) Wrong, None of the decline was due to increased imports, because by the definition of GDP, imports are excluded. To quote the fed from the link above, "imports do not add to or subtract from GDP." You agree that, in aggregate, the amount of consumption/investment/government spend are up, right? GDP has only declined because we didn't make all of it, which, sure, maybe a long-term problem, but irrelevant to a recession. Wrong, GDP declined because domestic spending and/or investment and/or exports declined. Nothing to do with imports at all. Imports are not included in GDP, ergo, imports can't cause a decline in GDP.
  • RC_ITR 4y ago
    Bro, what you are not understanding is that equating a recession to a decrease in production is pointless. It’s why you won’t answer my C+I+G question. What is happening is that Americans are selling debt/assets in exchange for goods/services (that’s what a trade imbalance is). They are still able to consume and invest an increasing amount of goods/services and there’s no signs of that ability to finance those activities via trade imbalance decreasing any time soon. In fact, the reason GDP went down without C+I+G going down is that they did more of it than ever before! So keep calling me D-K but you have no idea what GDP even represents (production is not the economy my guy, trade imbalances have an impact). Like you get that assets/capital formation aren’t in GDP but you can still sell them, right? And that’s why > Wrong, GDP declined because domestic spending and/or investment and/or exports declined. Is incorrect. None of those things declined, we just financed them with a trade imbalance (instead of production) which is why you should google FDI EDIT: Lets just put this to rest and answer me this question. Imagine a world where tomorrow, China is willing to sell America everything it wants in exchange for shares of BigCo. (To be clear, the flow is dollars used to purchase RMB, RMB used to purchase goods/services, RMB used to purchase dollars, dollars used to purchase shares of BigCo.) America takes them up on this deal and increases consumption by 5x overnight. Given that America is importing all its goods/services, it has a GDP of zero, a 100% decline. Is that a good measure of an economy increasing its consumption of goods/services from $20tn to $100tn, or is the trade imbalance hiding something important there? Which again, my original point: sure GDP is down, but that reflects trade financing more than it does economic activity (whereas you seem to have this weird fixation of in-quarter production being the only source of value creation in an economy, which lol D-K)
    • WillPostForFood 4y ago
      equating a recession to a decrease in production is pointless I didn't equate a recession to anything. In fact, I never even used the word recession in any post, I don't have a framework, and not trying to push a political agenda. Literally, all I want to do is help you understand the GDP equation, which is often misunderstood as to how imports are excluded. (production is not the economy my guy, trade imbalances have an impact) Might be true, but we were talking about GDP. GDP is production. Imports are not included in GDP, so an increase in imports doesn't cause GDP to go down. So keep calling me D-K but you have no idea what GDP even represents (production is not the economy my guy, trade imbalances have an impact). OK, that is a very DK comment because all GDP does is try to represent production. So you may not like GDP, but you don't get to redefine it. It is what it is, flaws and all. If you want to make the case that the health of an economy shouldn't be measured by GDP, awesome, go do it (somewhere else, I don't care, or even disagree). But when you do it, remember what I taught you: GDP excludes imports, so when imports go up and down they don't change GDP. GDP is down, but that reflects trade financing Wrong, because math. Spending is up equal to the amount of imports increasing, so there is no effect on GDP. Lets just put this to rest and answer me this question. You are conflating an increase in imports with a decrease in domestic spending. Trade is not zero sum.