About to crash

[otto105]

Does it include Govt spending? Yes or no?

Yes, it's one of four components of it. It's not a measure of corporate and government spending.

 

[Flopper]

You’re worried about you. OK

GDP is meaningless as it consists of Govt and corporate spend. And Govt spend has grown out of control. You didn’t really counter what I wrote?

No, the gross national product of a nation does not include corporate spending but it does includes government spending. Note that personal consumption in the US is the largest component. GDP measures the size of the economy and government spending is an important part. It is not a measure of economic production or productivity. In poor countries goverment spending may be most of the economy.

GDP Formula = Consumption + Investment + Government + Net Exports, which are imports minus exports.

U.S. GDP is 70% personal consumption, 18% business investment, 17% government spending, and negative 5% net exports.

4 Critical Components of America's Economic Growth

The four components of GDP are consumption, business investment, government, and net exports. Learn how they impact America's economic growth.

www.thebalancemoney.com

 

[AzogtheDefiler]

Yes, it's one of four components of it. It's not a measure of corporate and government spending.

And has Govt spend been very high lately? Yes or no?

Does the $1 go as far now as it did in 2019?

How will many afford to hear their homes come winter with gas at $5 or more?

You keep talking about your stock portfolio but you’re not looking at the bigger picture.

 

[AzogtheDefiler]

No, the gross national product of a nation does not include corporate spending but it does includes government spending. Not that personal consumption is largest component.

GDP Formula = Consumption + Investment + Government + Net Exports, which are imports minus exports.

U.S. GDP is 70% personal consumption, 18% business investment, 17% government spending, and negative 5% net exports.

4 Critical Components of America's Economic Growth

The four components of GDP are consumption, business investment, government, and net exports. Learn how they impact America's economic growth.

www.thebalancemoney.com

You keep quoting economic theory. Were you doing the same in early 08 before the economy crashed and burned? Looks similar right? Commercial banks are pulling back in terms of lending. That’s a telltale sign.

 

[Flopper]

You keep quoting economic theory. Were you doing the same in early 08 before the economy crashed and burned? Looks similar right? Commercial banks are pulling back in terms of lending. That’s a telltale sign.

Your statement, "GDP is meaningless as it consists of Govt and corporate spending." was wrong. GDP is certainly not meaningless because it includes government spending and you were incorrect in stating GDP included corporate spending because it does not.

GDP measures the size of the economy. When it is increasing, the economy is expanding and when it is decreasing the economy is contracting.

The cutback in lending by commercial banks is not an across the board cut. They increased lending standards which primarily effects small business loans and consumer loans in the1st quarter of 2023. Loans to larger customers will remain the same. The forecast is a 15% drop in commercial loans. This certainly makes the likelihood of a recession higher. However consumer spending was still expanding at 1.6% rate in the 2nd quarter and is expected to increase in the 3rd quarter. So far it's effect on the economy has not been very dramatic. If consumer spending contracts in the 4th quarter, I suspect the Fed will backed off on their planned increase in interest rates to keep the economy from contracting.

 

[Flopper]

You keep quoting economic theory. Were you doing the same in early 08 before the economy crashed and burned? Looks similar right? Commercial banks are pulling back in terms of lending. That’s a telltale sign.

In 2008, I was investing as in previous years and the years that followed.

 

[AzogtheDefiler]

In 2008, I was investing as in previous years and the years that followed.

I am not talking about YOU. The economy crashed and the circumstances were oddly similar.

 

[AzogtheDefiler]

Your statement, "GDP is meaningless as it consists of Govt and corporate spending." was wrong. GDP is certainly not meaningless because it includes government spending and you were incorrect in stating GDP included corporate spending because it does not.

GDP measures the size of the economy. When it is increasing, the economy is expanding and when it is decreasing the economy is contracting.

The cutback in lending by commercial banks is not an across the board cut. They increased lending standards which primarily effects small business loans and consumer loans in the1st quarter of 2023. Loans to larger customers will remain the same. The forecast is a 15% drop in commercial loans. This certainly makes the likelihood of a recession higher. However consumer spending was still expanding at 1.6% rate in the 2nd quarter and is expected to increase in the 3rd quarter. So far it's effect on the economy has not been very dramatic. If consumer spending contracts in the 4th quarter, I suspect the Fed will backed off on their planned increase in interest rates to keep the economy from contracting.

It’s too late. The Fed did it’s damage. Now we just watch the bubble burst. People spending money cause of YOLO has its consequences

 

[otto105]

It’s too late. The Fed did it’s damage. Now we just watch the bubble burst. People spending money cause of YOLO has its consequences

What damage?

 

[bigrebnc1775]

The unemployment rate is 3.5%. If Trump was still president you'd be singing his praises from the mountain tops about what a wonderful economy we're in.

United States Unemployment Rate

Unemployment Rate in the United States increased to 4.10 percent in June from 4 percent in May of 2024. This page provides the latest reported value for - United States Unemployment Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic...

tradingeconomics.com

Yes the unemployment rate is low but household spending is skyhigh. Food or gas this paycheck

 

[AzogtheDefiler]

What damage?

Bankruptcies, foreclosures, lack of available credit, rise in unemployment, stock market decline. Recession.

 

[otto105]

Bankruptcies, foreclosures, lack of available credit, rise in unemployment, stock market decline. Recession.

Bankruptcy happens all the time.

So do foreclosures.

Credit has tightened but is not lacking.

Unemployment is lower now at 3.5%

Stock is what declining?


You’re just confused about what you want complain about.

 

[AzogtheDefiler]

Bankruptcy happens all the time.

So do foreclosures.

Credit has tightened but is not lacking.

Unemployment is lower now at 3.5%

Stock is what declining?


You’re just confused about what you want complain about.

I said what will happen not what has happened or what is happening. Hence it’s a prediction.

 

[Flopper]

It’s too late. The Fed did it’s damage. Now we just watch the bubble burst. People spending money cause of YOLO has its consequences

When the fed brought down inflation from 9.1% a year ago to 3.2%, it wasn't damage. Now it's considered damage because it is beginning to effect growth.

The fact is when the Fed raises interest rates to curb inflation, it puts pressure on economic expansion. Eventually that pressure reduces growth. Decreasing the growth rate is the price we pay for using interest rates to bring down inflation. About half the time when the Fed uses interest rates to curb inflation it results in either a recession or at least a period very low growth. The fact is the Fed almost never succeeds in bringing down inflation with little effect on growth.

 

[DudleySmith]

Does it include Govt spending? Yes or no?

The giant corporate welfare 'infrastucture' bill adds to the GDP numbers, on top of defense and other spending.

Consumer spending fell, hence the so-called drop in the inflation rate. Higher prices cause higher consumer spending for fewer goods and services, so govt. spending increases all four components, which makes the drop in consumer spending should be perceived more ominous than it is, especially since inflation continued to rise anyway. This is the boom and bust bubble economy that was started in the 1960's and the 'too big to fail' policies since then.

 

[AzogtheDefiler]

When the fed brought down inflation from 9.1% a year ago to 3.2%, it wasn't damage. Now it's considered damage because it is beginning to effect growth.

The fact is when the Fed raises interest rates to curb inflation, it puts pressure on economic expansion. Eventually that pressure reduces growth. Decreasing the growth rate is the price we pay for using interest rates to bring down inflation. About half the time when the Fed uses interest rates to curb inflation it results in either a recession or at least a period very low growth. The fact is the Fed almost never succeeds in bringing down inflation with little effect on growth.

Correct. Since Biden took office the aggregate inflation has been around 19%. Why? He declared war on fossil fuels and since oil is traded on futures the price skyrocketed. He put a band aid on it by depleting our reserves last winter. That strategy works ONCE. When you raise the price of energy and then succumb to the Left’s annoying plea of “living wages” the cost of doing business increases and owners raise prices. The Fed then increases interest rates to curb demand for goods but there is too much money out there due to the generosity of the PPP programs that put way too much money into the system.

People are saving less, borrowing more, spending more and it has created a massive bubble, which I believe will burst in Q1’24.

Biden will go down as the worst president in US history and that is saying a lot given we survived eight years of Dubya, albeit barely.

 

[Flopper]

Correct. Since Biden took office the aggregate inflation has been around 19%. Why? He declared war on fossil fuels and since oil is traded on futures the price skyrocketed. He put a band aid on it by depleting our reserves last winter. That strategy works ONCE. When you raise the price of energy and then succumb to the Left’s annoying plea of “living wages” the cost of doing business increases and owners raise prices. The Fed then increases interest rates to curb demand for goods but there is too much money out there due to the generosity of the PPP programs that put way too much money into the system.

People are saving less, borrowing more, spending more and it has created a massive bubble, which I believe will burst in Q1’24.

Biden will go down as the worst president in US history and that is saying a lot given we survived eight years of Dubya, albeit barely.

I think most economist would give you a lot of argument on the why of the inflation. In regard to actually inflation, Energy is only 9% of the CPI. The largest component in the CPI is Housing followed by food.

 

[Slade3200]

The economy and job creation is so great, so great, in fact, that the average man and woman is having to work two or more jobs instead of just one!!!

I’ll call bullshit on that comment. Do you know how many Americans work more than one job?

 

[DudleySmith]

When the fed brought down inflation from 9.1% a year ago to 3.2%, it wasn't damage. Now it's considered damage because it is beginning to effect growth.

That 9% is still there, it didn't go away, and the 3.2% rate compounds it. Inflation wasn't reduced, it's rate was, and it's a dubious claim anyway, politically motivated math most likely, same with all past inflation claims by govt. agencies since the energy crisis hoax.

I'm also willing to bet that most people people can't tell the difference if they're fed chain weighted CPI numbers or traditional CPI numbers when the assorted propagandists throw out such stats, nor do they know the various weights given to items changes all the time, depending on what the Fed wants to promote or demote; few in Congress in either Party ever want to adjust Social Security to reflect real inflation for instance, since they've continually raided and looted that revenue stream since Eisenhower. Neither Party wants to adjust minimum wage for the same reason, among other things.

 

[AzogtheDefiler]

I think most economist would give you a lot of argument on the why of the inflation. In regard to actually inflation, Energy is only 9% of the CPI. The largest component in the CPI is Housing followed by food.

Except 85% of our good are transported by trucks. Higher energy costs equates to higher delivery costs and the seller will pass that cost to the buyer, voila. So energy cost is the primary culprit, wages being the 2nd. Why? Biden sucks. But most Americans know that hence his approval rating in in the toilet.

So we’ll see if I am right. Correct? Q1’24 isn’t that far away.