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It is an interesting comment but misleading and irrelevant to the subject. When you pay for your pension (in a country like France) it is not included in the GD
by skywal_l 4y ago
It is an interesting comment but misleading and irrelevant to the subject. When you pay for your pension (in a country like France) it is not included in the GDP because it is considered a tax.
When the government pay their pension to a pensioner it is not included in the GDP [0].
[0] https://www.investopedia.com/ask/answers/082415/are-social-security-payments-included-us-gdp-calculation.asp https://www.investopedia.com/ask/answers/082415/are-social-s...
- rayiner 4y agoThere are two ways to calculate GDP, an income approach and an expenditure approach. In the expenditure approach, transfer payments are not listed as an expenditure. But when a retiree buys something with that money is counted. Under the income approach, social security tax payments are included in income: https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.htm https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.h... You’re incorrect to say that an economy without social security artificially seems like it has a higher GDP than one with social security. It is counted as income to the employee, and anything purchased with it is counted as consumption.