I need to know more about this 7.2% GDP increase...

[rasputin1952]

It is easy to say, "Hey there was a 7.2% GDP increase this quarter"; it is something entirely different to see just where this increase comes from.

I, for one, hold reservations that the tax cuts had much to do with this, and think that the wars in Afghanistan and Iraq have more to do with this than a massive increase in consumer spending. I think I will hold my cards close to my chest during this GOP lovefest, at least until i get particulars as to just HOW this increase happened.
After all,even after people held back spending cash for the past 3 years, eventually people had to spend to keep the basic workings of their homes going.

One other thing, after a fall of some 18% over 3 years, a burp like this still doesn't make it a glorious victory. There is still a net loss of jobs as well...could this be because there are fewer workers, therefore more profits?

Just asking, cause I don't have all the answers.

:shrug:

[mhr]

1. My Take Is This, There Were Three Components To The Increase

1. Military Spending, 50%
2. Corporate Profits by Employee Downsizing, 25%
3. Consumer Spending From Home Equity Refinancing, 25%

None of the above will contribute to long term economic growth.

[fizzana]

7. Profits are not a component of the GDP.

n/t

[NoMoreRedInk]

23. Thank you. You are correct****

nm

[NoMoreRedInk]

22. All gov't (incl military) spending only increased 1.2% in 3Q. Most GDP

increase was due to consumer spending (from refis and tax cuts) and business capital investment.

[papau]

2. Bush trashing the dollar caused a weakened $ to cause a surge in exports

and also domestic sales in lieu of imports.

Despite this we still have a huge trade deficit as we export the Bush fiscal deficit.

The tax cuts have destroyed the logical structure of our economy - this GNP growth of 7.2% will drop to 4% area in 4th qtr and to 3.25 to 3.5% in 04 unless there is another 30% devalulation in the American dollar - and if there is, I would expect our financial media to notice.

3. curious here too

That was my immediate thought, that it probably had something to do with military spending.
& that productivity going up without increasing jobs could also be an explanation.

[eyesroll]

4. Good point...

We also have to remember that these figures are preliminary.
There will be revisions in coming weeks.

I'm willing to bet that if these revisions are downward, they will be buried on page D-19 of the newspaper, next to the craft-fair announcements.

[JNelson6563]

5. three words

smoke and mirrors

[Name removed]

10. Deleted message

Message removed by moderator. Click here to review the message board rules.

[newyawker99]

13. Hi Tito!!

Welcome to DU!! :toast:

[Woodstock]

17. so, you think "liberalism is ...watered down... fascism"?

I don't even know where to start, to be honest. It's clear you disdain liberalism (You said: Socialism/Liberalism is all about the redistribution of wealth wich {sic} is a watered down version of communism/Fascism), so perhaps, "as the forum rules so nicely put it," you did not notice this was a forum for progressives. The world is not black and white. There are shades of gray. You say you are an "educator of sorts" so I can only guess your income level, but if it is about where I think it is (reading between the lines) - then I'd place you in the middle class. That would also place you as one who is, as you put it, "feeding off the truly exceptional people at the top with the majority of the wealth" - one among those who "worked their tails off" and lost their money to the man with the "foodstamps" who has a "diamond necklace" and a "brand new Nissan or Hyundai" - that is, you are not one of the wealthy. So, do you think you are getting a significant tax cut from Bush? Read on.

http://www.ufenet.org/research/BushStimulus.html

...Half of all Americans will receive less than $100 from the tax cut in 2003, according to Citizens for Tax Justice. But Americans making $1 million or more will receive $93,500 from the tax cut, according the Tax Policy Center.

Over the next four years, the bottom 60 percent of taxpayers will receive just 9 percent of all the tax cuts, while just the top one percent receives 39 percent of the tax cuts. The tax cut benefits flowing to the top 1% far outpace the 23% share of federal taxes they now pay.

The distribution of tax cuts do not get better with age. The tax cuts targeted at middle- and low-income families sunset, or disappear, after 2004. As a result, in 2006, 52 percent of the Bush tax cut goes to the wealthiest 1 percent of Americans...

Most states are constitutionally required to balance their budgets. So, in order to close their budget deficits, state legislatures will have to either cut spending or raise taxes. By cutting spending, they will layoff public sector workers leading to further declines in demand. Most states rely on the sales and property taxes for revenue, which most directly affect middle- and low-income families. If states raise sales or property taxes, they will take will take money out of the hands of those who received the least from the Bush tax cut...

[Sideways]

27. Your Long Boring And Trite Rant Full Of Typos And Grammatical Abortions

Comes down to this:

"The economic growth is because of the Bush tax cut that has finally come into effect.

I don't have anything else to say.

[LoZoccolo]

38. It is a very common misconception by FReepers...

...that "national socialism" has anything to do with left-wing socialism. The operative word there is "national", as in "nationalism", a right-wing philosophy (very similiar to Straussian neoconservatism in my opinion). The "socialism" part was put there to attract working-class people to the party, as it /used/ to be (and still is in most places) that the working-class supported left-wing policies.

As far as this "all are given a chance to excel" stuff...let me put it this way...you're probably one of those people that thinks kids have just as good a shot at succeeding growing up in neighborhoods that /you won't even drive through/.

[fizzana]

6. Some quick answers

I just heard Paul Krugman being interviewed on the local NPR station (KCRW - Los Angeles).

Most of the growth comes from consumer spending particularly on high ticket items, mainly cars etc. This is being fueled by home refinancing as well as the tax cut. Business investment was a very small part of it, and while the war in Iraq helped it was also a minor factor.

He also mentioned that the 7.2% rate is an initial estimate and these numbers are generally revised downwards. Even the pro-tax cut person on the show accepted that the growth in this quarter is not sustainable.

BTW, increased profits do not determine GDP. GDP is a measure of total output (or sales).

The key issue in this whole thing is whether the tax cuts will help or hurt in the long run because increased deficits will definitely hurt the economy in the long run.

Ultimately the tax cuts have gone for the short term fix versus a long term solution because this will play a lot better to the general population.

From my vantage point (the business I'm in) things are finally picking. We're in an industry that is largely driven by discretionary spending so it suggests the economy is picking up. I just think in the long run, we're paying a price that's too big for the short term benefit.

On another note, I think Howard Dean needs to walk away from his stand to repeal the entire tax cut. A lot of middle class people were helped by their share of the tax cut and any Democrat who threatens that is going to pay a price.

[rasputin1952]

15. I don't know about backing off the repeal of the tax cuts...

The middle class really didn't do all that well, and it is the upper 2% that really made out like bandits.

Also, reinstating the Corporate taxes is not a bad idea, but you have to rein in the 'offshore' idiocy as well. Funny everyone wants to make money in the US, but so few want to accepot the responsibility of paying taxes, and ensuring the money is spent well.

O8)

[fizzana]

16. With you 100% on the upper 2% & corporate taxes

even the upper 10%. I know that the middle class didn't make out that well on the tax cut but in politics perception is often more important than reality and the GOP could use the fact that Dean wants to rescind the middle class tax cut to their advantage.

The key in 2004 will be to capture the independant middle. Bush is losing that sector right now so he could be ripe for the taking but missteps by the Democrats could negate that potential advantage in a hurry.

[readmylips]

8. Something just stinks....you can't trust the bushistas...

Home sales are up because of the low interest rates. But, the permits for new home constructions are down..down..down.

Foreclosures of homes and bankrupcys are at a crisis high.

The little tax checks have been spent. I don't know what the heck we spent ours but we didn't see the benefit. It was just pocket change.

Thousands of jobs were lost and they are not coming back. No new jobs have been created and there's no hope of immediate job recovery. My neighbors, in their middle fiftys, lost their jobs and are holding two part time jobs each to at least cover the mortgage.

Let the repigs celebrate. It will catchup to them in 2004.

[EdGy]

9. I do not believe these numbers: Bush is a liar

he and his regime have shown they are willing to lie about anything and everything if it helps them.

They lied about the 2000 election

They lied about the WMD imminent threat in Iraq

Compared to those things, lieing about GDP is nothing.

These are "official" statistics, put out by the Bush regime itself.

While they may be accurate, I will not believe them unless they are verified independently.

Because the Repugs are desperate, and when they get desperate they will resort to anything to keep their grip on power. Just like right-wing extremists the world over.

[Tito]

11. some questions about a previous posters statements

I would like a few things clarified, First, the electoral colleage is placed in the constitution for a reason, it is so that california or another state with massive population is not catered too endlessly and the others are forgotten about because they hold all of the power, winning the popular vote does not make you president, and there was a check, the electoral colleage meets to vote on the president, if anybody thought that it was incredibly immoral to chose a president based on the system set in place by our founding fathers, they could have easily used it to even the score, and didnt.


I would also like to clarifiy right wing extremists, these are people such as amish and small town farmer folk, unless you are talking about fascism wich, you would point out as the Nazi party, that is the national socialist party as it translates into english, i was under the impression that socialism was on the left. Left- more govenrment, Right- less government just outa the blue, who sounds like a more probable party to desire power?

[kodi]

18. what planet are you from?

your remark that

"...like to clarifiy right wing extremists, these are people such as amish and small town farmer folk,.."

is absurdly dishonest

your remark that "Left- more govenrment (sic), Right- less government" is not an intellectually competent remark. it is merely a patina for right wing rationalization.

as is the deduction that those who would use the collective power of the populus for the benefit of society are merely grasping for power.

[ithacan]

35. electoral college was put in for the slaveholders

maybe you're not aware of the fact that slaves were counted as 3/5 of a person for purposes of representation of states in the House of Reps. The ONLY reason the electoral college was set up for presidency was to artificially bolster the influence of the slaveholders of the south.

As for right-wing extremists, you need to do a bit of reading, your ignorance on this point is pretty amazing!

Right wing extremists are people like John Ashcroft. Pat Robertson. George W. Bush. Dick Cheney. The entire Republican leadership of the House of Representatives. Those are the right wing extremists.

by the way you should check out this website: http://www.theocracywatch.org
to see how your party has been taken over by right wing extremist fundamentalists...

[LoZoccolo]

40. left - right continuum

If there's one thing I want you to learn before you stop coming here because you got kicked out, it's that the left - right continuum is about equality, which may or may not need bigger government to ensure.

Communism was meant to create a more democratic society by virtue of it being a classless society. You may think that the way they try to set it up greatly risks creating just the opposite, and you know what? I'd agree with you (that's why I'm a liberal - see, there /is/ a difference!). But that's not their intention.

Right-wing libertarianism, on the other hand (you may not know, but there's a left-wing version of libertarianism), appears to some people to create more "freedom" by virtue of there being little/no social programs, and smaller government, but that's because inequalities in economic power are more tolerated. That's why it's a right-wing philosophy; it allows a hierarchy based on economic power. And the right-wing is all about hierarchy.

Give you an example of how less government can equal less equality: you think you'd have a lot of freedom and equality in a society that had a government so small that there was no police protection to keep you from being taken advantage of and attacked? Or one where a big rich corporation could plunk a big polluting factory right next to your house? I didn't think so.

[fizzana]

14. It's a lot harder to lie about GDP numbers

A lot of the information that makes up the GDP numbers are out there already and can't be made up. At best, they can stretch the numbers a little. A good indication of this is quarterly reports from the Fortune 500. By now most of the Fortune 500 companies have reported and their revenues (not profits) are up quite a bit.

I do believe there is some exaggeration and we will probably see an adjustment of about 1% down but it would be impossible to get away with claiming 7% growth when the reality is a lot less.

[tom_paine]

19. Compared to the Iraq lies, lying about GDP is nothing

You got that right, EdGy!

[ctex]

31. Civil service employees probably prepared these numbers

These estimates are not made by the WH staff, but by people in the appropriate government department or agency. Most of these folks are civil service employees and many of them have held their jobs through several administrations. I would not be surprised (though I have no way of verifying) to learn that many of the same people who did the GDP estimates during the Clinton adminstration worked on this current estimate. It would be very difficult for Bush to make them lie for his benefit.

Keep in mind that the GDP is far from a perfect measure of the health of the economy. For example, if industry started working a lot of overtime (instead of recalling laid-off workers) to make products that sat unsold on store shelves and in auto showrooms, etc., the GDP would improve -- at least in the short-run -- without an increase in employment and worker income.

[EdGy]

36. but the Bush regime got the CIA to lie about WMD in Iraq

The CIA staffers, who are professional analysts, were totally overriden by pressure from Bush and Cheney to come up with the numbers and info they wanted to justify their policies.

I can't believe it would be much harder for the Bush regime to put the same kind of pressure on professional civil service people at Commerce or other departments to get them to fudge the numbers.

And of course, as you point out, even that number is very questionable.

By the way Tito, right wingers love a stronger state, in particular they always want to strengthen the police and other repressive apparatus of the state, including the military, at the expense of the civil liberties of the people. That is what the Bush people are doing.

fascism <'fæ??z?m>
noun
1
any ideology or movement inspired by Italian Fascism,
such as German National Socialism; any right-wing nationalist ideology or movement with an authoritarian and hierarchical structure that is fundamentally opposed to democracy and liberalism
2
any ideology, movement, programme, tendency, etc., that
may be characterized as right-wing, chauvinist, authoritarian, etc.
http://www.wordreference.com/english/definition.asp?en=fascism

[rasputin1952]

12. Getting some very good info here...

I am far from an economist, just a little common sense seems to carry the day; and it sure seems to me that there is a lot of celebrating, with very little justification.

I recall when the Stock Market jumped a couple of months ago, and the RWnut's went ballistic. Of course, it tanked again, but yoiu didn't hear the Nuts bring that up.

I'm just trying to get a bearing on all of this. Thanks for the input!!!!

:shrug:

[Frodo]

29. Carefull with the message.

The DOW closed within about .2% of it's high for the year today.

If they ignored the drop you must have ignored the run back up?

[rasputin1952]

33. Pardon my ignorance...

as I said, I am no economist, but the Market dropped and never recovered to its previous level a few years ago. So to bring it back up to close to this years high, is OK I guess, but not great. Also, those that lost a lot bailed, so isn't it mostly the wealthy that are playing the marlet? I know that there are some huge funds involved in the market too, but seems to me, mostly those that got a lot of cash to burn were the wealthy anyway. How can that help the common individual?

These are the types of things I need to make an honest decision.

:bounce:

[Fixated]

20. ...

Most economists predict that the 7.2 number will sink tosomewhere around 5.5%.

And Tito, PREEEEEACH! A-fucking-men! People don't seem to understand the business cycles.

[Frodo]

28. No they don't

Since 1978, the largest downward revision of GDP growth from estimate to final figure is .5%

I seriously doubt that the consensus economist estimate is three to four times that amount.

[Fixated]

32. Yes, they do.

http://money.cnn.com/2003/10/30/markets/markets_newyork/index.htm

[Frodo]

34. Read it again.

One investment officer at a tiny bankrupt investment house that trades at .02/share tried to explain why the market didn't shoot up today on the news. I'm not sure I would spin that as a consensus of economists talking about a record revision the day the figures come out.

I don't think I would trust this guy to make an assesment of the economy since he can get his own stock up to two bits. Since I read about an expected 7% GDP growth about a week ago... I suspect the market to have factored it in already... and he SHOULD have known that.

[NoMoreRedInk]

21. Consumer spending and business capital investment were the biggest factors

Government spending had very little to do with it this quarter.

The 2nd quarter's pop was due primarily to government military spending. That's not the case this time.

[kentuck]

30. So the $87 billion will spur the numbers the next quarter?

This could be a trend, huh?

[leftofthedial]

24. I don't buy it for a minute

I see zero signs of recovery in my travels (LA - Colorado - Tennessee). I don't know a soul who is spending money on anything they don't absolutely need (except for a handful of wealthy friends who are traveling voraciously and spending their money mostly overseas).

What do I see? More and more and more layoffs. More and more and more empty storefronts. More and more small businesses with zero revenues, hoping to hold on "until things turn around." More and more and more homeless people. More and more and more for sales signs in front of empty houses. That's what I see.

Bush has fully politicized the Council of Economic Advisors and the various reporting agencies. We are through the looking glass here. Grand pronouncements from Big Brother that the chocolate ration has been increased don't impress me.

But when you transfer trillions of dollars into a few private hands in two years as the Bush GOPNAC Cabal have done, it gives a few people enormous opportunity to create short-term blips in the economy. Add to this the proven propensity for positive exagerration that takes place every reporting cycle under this administration and I'm suprised growth was so slow.

[Capn Sunshine]

25. well, I posted about this very thing earlier :)

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=618282

[Gin]

26. A repeat of the 16 words fiasco.....I talk with businesses every day..

they say layoff..after layoffs.

Maybe folks are running up their credit cards. Watch the bankruptcy rate zoom.

[alfredo]

39. There was back to school buying, industries gearing up for Christmas

along with those ever popular durable goods.





A recession does a real good job of shifting the power away from the worker, into the hands of management. Recession is the weapon of choice of the capitalist. Longer the recession, the more damage the capitalist can do.

[DemoTex]

37. What's the increase in consumer debt?

Consumer debt is a time bomb in this economic equation. Never mentioned by the Bu$hco, however.

[John_H]

41. You can thank the middle class tax cut the dems put into the bill

for all the spending that boosted the economy

[rasputin1952]

42. All of the ideas above come in to play at one time or another...

but I think the middle class tax cut had a lot to do with it. After all, they are the ones that really spend on stuff.,

:bounce: