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n2doc

(47,953 posts)
Tue Apr 23, 2013, 12:14 PM Apr 2013

Tweaking GDP statistics won’t hide the fact that Americans are doing worse

By Matt Phillips

Uncle Sam is about to rewrite US economic history stretching all the way back to 1929.

With a statistical flick of the switch starting in July, the US government will increase the size of the world’s largest economy by about 3%. How? The agency that tallies up US GDP is going to be changing the way it counts spending on research and development. Here’s the short version, from the Financial Times, which published a solid story on the change (paywall).

At present, R&D counts as a cost of doing business, so the final output of Apple iPads is included in GDP but the research done to create them is not. R&D will now count as an investment, adding a bit more than 2 per cent to the measured size of the economy.

Over at the Washington Post, Neil Irwin explains it this way:

Now BEA [the Bureau of Economic Analysis] will treat research and development and creation of artistic works as longer-term investments, not unlike factories, equipment, or software. On a purely technical level, this should more precisely match GDP in any one quarter to the actual economic value the nation generates in that span. In the old system, the value of the economic output of a Star Wars movie would only show up in GDP over decades to come, in the form of personal consumption expenditures like movie tickets and DVD sales.


So should you care?

Unless you’re one of the people on Wall Street or in academia whose professional reputation rests on how closely they can guess where GDP growth will be each quarter, probably not. In fact, if you’re interested in figuring out anything meaningful about the economy, like, say, how the people in it are actually doing, GDP is a pretty awful measure.

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http://qz.com/77030/uncle-sam-will-now-rewrite-84-years-of-economic-history/
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Tweaking GDP statistics won’t hide the fact that Americans are doing worse (Original Post) n2doc Apr 2013 OP
You forget: Nobody CARES about the 99%! Demeter Apr 2013 #1
People are out there parroting that this is good news, and a good thing. Fuddnik Apr 2013 #2
If gdp is increased by this tweak..... Purplehazed Apr 2013 #3
Details! Details! Welcome to DU, by the way Demeter Apr 2013 #4
 

Demeter

(85,373 posts)
1. You forget: Nobody CARES about the 99%!
Tue Apr 23, 2013, 12:21 PM
Apr 2013

This is another way to scam the 99% for the support of Korporate Krime.

Fuddnik

(8,846 posts)
2. People are out there parroting that this is good news, and a good thing.
Tue Apr 23, 2013, 12:35 PM
Apr 2013

Even though absolutely nothing has changed. The economy can be worse (and probably will be), but the politicians can still pat themselves on the backs, and say, "See we saved you". Even though you're eating catfood instead of chicken, the numbers are up.

Time to pull out the pitchforks.

 

Demeter

(85,373 posts)
4. Details! Details! Welcome to DU, by the way
Tue Apr 23, 2013, 04:54 PM
Apr 2013

See the geeks at Stock Market Watch Mon-Fri, and Weekend Economists, features of this group...

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