Please read this folks. It proves that under the Coalition, our country now has a deficit that's TWICE as large since they gained government.

http://www.abc.net.au/news/2014-05-06/has-the-government-doubled-the-budget-defecit-/5423392

The claim: "Chris Bowen says Joe Hockey has doubled the defect by changes to government spending and government assumptions".

The verdict: "Since the election the official deficit has doubled. Spending decisions have been made that were not in the previous forecasts, and the economic assumptions are different from those used before the election. Mr Bowen's claim checks out."

The Coalition = economically incompetent. Only 7 months in office and they've DOUBLED our deficit.

Question: "Mr Abbott, Julie Bishop said on TV that... you would have to do both raising taxes and cutting spending to bring the budget back to black. What taxes do you propose to raise?"
Mr Abbott: "The only party that will raise taxes after the election is the Labor Party."

Nhoj

do u suggest we go back to those who every year promised with straight faces to produce a surplus? Shameless supporters should really be removing planks from their own eyes before didtorting specs in others.

Runner, I notice you had nothing whatsoever to say about the *DOUBLED* deficit. Disagree with the findings in the link? If so, produce "your" detailed figures to prove the finding wrong.

And through all of this analysis, there is not a single thought of the ongoing massive rate of increase in the need for expenditure on basic infrastructure.

Very high immigration demands very high expenditure on infrastructure (and services), just to provide the same standard of living for ever-more people.

This is a HUGE factor in the burgeoning deficit and the desire to balance the books. There are also other huge factors associated with this rate of immigration which affect our budgetary position.

When Abbott/Hockey or Shorten/Bowen come out and say something about this, and suggest that a cut in immigration would be a good idea, then I will start to listen. But for them to talk about the need to reduce the deficit and eventually achieve a surplus, while continuing to facilitate very high population growth, is just the epitome of hypocrisy.

Whether Bowen’s claim is entirely true or true to some extent or not at all, is largely beside the point. The most important fact is that the Libs and Labs are very similar political animals, both utterly devoted to continuous growth and forever in pursuance of higher growth, and both utterly under the thumb of big business, its donations regime and its profit motive.

Until this changes, and one or both of them embraces a paradigm of genuine sustainability, they are not going to get the budget into order.

BTW, good thread Nhoj.

Ludwig, immigration ADDS to Australia's GPD, not subtracts from it. I'll simplify it --- when over 20 years a $10 investment produces a $15 dollar return, that's not a $10 loss, it's a $5 GAIN. That's how the financial benefits of immigration have worked in our country for centuries. Over time, it doesn't subtract from our GDP, it ADDS to our GDP.

Please don't blame immigrants for Joe Hockey's almost IMMEDIATE DOUBLING of the deficit.

<< …immigration ADDS to Australia's GPD, not subtracts from it. >>

Nhoj, please take a good close look at GDP. It is a most terribly flawed economic indicator, which adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc.

Yes immigration adds to economic turnover and hence GDP.

But what about the other side of the coin - the enormous demands that it exerts on our economy and budget?

<< Please don't blame immigrants for Joe Hockey's almost IMMEDIATE DOUBLING of the deficit. >>

I’m not. It’s got nothing to do with the mooted doubling of the deficit. But immigration sure as hell has EVERYTHING to do with the budget and the government’s ability to rein in the deficit. Hockey and Bowen should be talking about it, very prominently, as a fundamental part of the current banter about the budget.

Nhoj, I must confess I have not yet read the link, but I will.

What I want to know now is, why do you continue to talk about immigration in the past hundred odd years as being the same as immigration intake today.

Our early immigrants were mostly hard working, highly motivated and highly skilled orpeople who wanted to learn skills and, without their input, Australia would be a different place today, for the worse I might add.

Today, the majority of immigrants, and the illegals are welfare dependent, with many still drawing on our welfare system years after arriving.

Where else in this world could a couple immigrate to, not work a single day, yet bring up ten kids, be paid $5 grand each to have those kids and not lift a finger to contribute.

Immigration today is a drain, and Rudds fiasco that he alone created has cost us billions, will continue costing us billions and will deprive our future generations of many of the luxuries we were lucky enough to have.

Immigration must stop immediately and all 457's must not be renewed and no more issued until we get this country back on track.

Finally, before finger pointing on our position, first step is to find out how much money's being wasted, in servicing the left overs from that incompetent labor/green mob that plunged us into debt in the first place.

Now once that figure is established, if there is still mud to be thrown, then that's fair game.

As soon as I saw the $8 billion to the RBA was included I knew it was
an ABC branch of the ALP fraud.
For Mhoj's information the RBA is part of the government.
For example left pocket and right pocket !
Got it ?

I thought we had cleared this one up, Ludwig, ages ago.

>>Nhoj, please take a good close look at GDP. It is a most terribly flawed economic indicator, which adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc.<<

GDP contains neither negative nor positive components. It contains nothing but numbers, and these are just numbers that you add up in a single column. If you want to classify some of those components as "good" or "bad", that is fine, but they have no impact whatsoever on the numbers that you add up to arrive at a total for GDP.

Fires, cyclones, illnesses are not "good" for the country, as they divert resources - and therefore money - from other, more productive roles. But that is no reason to exclude them from the calculation, since the money is employed within our economy, buying groceries for the firefighters, allowing the nurses to pay their rent, builders' labourers to buy clothes etc. etc.

But above all, these factors you cite do not, repeat not, increase economic turnover. It is clear as day (to most people) that if we spent all our time tending the sick, fighting fires and rebuilding after an earthquake or cyclone, very quickly we would have a GDP of zero. So, by definition, the time, energy, resources and money expended on these activities cannot possibly, in any universe, cause "increased economic turnover".

I am frankly astounded that this simple concept still hasn't made it through into your consciousness, Ludwig.

Good morning Nhoj, please take a seat and thank you for coming in to share your thoughts with the new management team.

As you know, since the new management of Australia Pty Ltd took over in November last year, we have been interviewing staff that were here under the previous management in order to get their perspectives. We are pleased that you have raised your concern that, in trying to get back to profitability (surplus), the new management has actually doubled our debt?

We were just wondering if you would clarify your basis for this assertion for us?

Firstly, can you confirm that under the previous management, the finance department prepared the forecasts but the management provided the income and expense “assumptions” upon which those forecasts were based?

Nhoj; Yes of course, that’s how it works.

So, during your previous six years with the firm, the assumptions you used repeatedly “predicted” returns to profit that never eventuated and the then manager of finance Mr. Swann actually reported that the firm “had” delivered a profit when it didn’t?

Nhoj; Well, Err, Yes.

Did the firm ever return a profit?

Nhoj; well, Err, actually, No!

So can you explain why there was no return to profit against the hundreds of claims that you would or indeed had produced a profit?

Nhoj; Well, Err, I guess the revenues and expenses never matched our forecasts.

If I could just take that a little further Nhoj, the revenues and expenses are real and “actual” but the assumptions you provided to finance for the forecasts are yours and were repeatedly wrong?

Nhoj; Well, Err, I guess so.

So if our new managers were to accept your PEFO of August 2013 as the base line for 2014, it would be wrong because your assumptions were self evidently wrong?

Nhoj; Well, Err, I guess so.

Cont’d

Cont’d

So if we were to put in our own more conservative assumptions to finance department for that same plan as announced on December 7, 2013 in the MYEFO, it would look totally different, particularly if we accepted revenue and expense actual figures but added some of our own spending priorities?

Nhoj; Well, Err, I guess so.

You see Nhoj, we have the same base line “actual” results as you had as at December 7, 2013, but we have lowered the assumption thresholds and added our immediate spending priorities.

This has given the new management a realistic but much higher debt target to address in the May budget, does that in anyway resonate as logical to you?

Nhoj; well, Err, actually, No!

Is this because you don’t accept that your failed assumptions actually failed?

Nhoj; well, Err, actually I still don’t even see anything that needs fixing.

Do the repeated failed assumptions need fixing, does the failure to produce a profit need fixing?

Nhoj; well, Err, actually, could you repeat the question?

OK Nhoj, did you ever do any financial analysis work on this yourself or did you outsource that task?

Nhoj; well, Err, we actually outsourced it.

To where?

Nhoj; well, Err, we actually outsourced it to a PR firm.

So you outsourced critical national financial analysis to a PR firm! Which one?

Nhoj; well, Err, we actually outsourced it to the ABC’s Fact Check unit.

I see, thank you Nhoj. I feel this interview has gone some way to defining a career path for you. It’s not with us of course but you can reflect on your opportunities somewhere in the real world.

In the meantime please empty your desk into the cardboard box provided and await escort from the premises by our security staff

Rehctub, immigration has ALWAYS been an initial drain on resources. And it's ALWAYS been an eventual BENEFIT to the wealth, and equally importantly diversity, of Australia.

I'll yet again explain the basic maths involved to you (reduced to its most basic mathematical level to help you understand) --- when over 20 years a $10 investment produces a $15 overall return, that's NOT a $10 loss to Australia's wealth, it's a $5 GAIN. I explained this earlier, obviously maths is not one of your strengths. As long as immigration continues it will draw on our resources, and it will repay that ten times over. There's ALWAYS a minority of bigots and hateful racists who say "this" lot of immigrants are "different" and will bring Australia to it's knees.... They said it in the 50s, they said it again in the 60s, they said it again in the 70s, they said it again in the 80s etc etc etc etc.

For example, in the 60's some people were terrified that those horrible, alien immigrants from Greece and Italy were destroying our economy and dividing our culture. They said the cost was too high, and that these wicked aliens would never, ever assimilate and contribute to the wealth of Australia. Laughable isn't it Rehctub, just as "your" current fear and paranoia will be viewed as equally laughable in 50 years time.

Spindoc, thanks for acknowledging that the Coalition has DOUBLED the deficit.

I really appreciate your support. That's so nice of you.

immigration has ALWAYS been an initial drain on resources and it's ALWAYS been an eventual BENEFIT to the wealth, and equally importantly diversity, of Australia.
Nhoj,
That was certainly the case when the trained immigrants came from war torn Europe & Australia's infrastructure program was huge. Could you imagine another Snowy mountains scheme with the support of the Greens ?
Could you imagine the immigrants from the conflict areas around the middle east working like those who built the Snowy scheme ?
Can you honestly see that happening ?
Can you honestly see Australia's deficit going down so soon after so many years of managerial wilderness ?
Then we have to keep the likes of you because judging by your posts I don't think you could ever pull your weight.

Individual, what you "really" meant to write was, "Can you honestly see Australia's deficit going down, after the DOUBLING of the deficit in a mere 7 months by the COALITION?"

Get it right Individual. Gee, remember it's hard workers like me who'll have to support oldies like you after the Coalition wrecks the economy from DOUBLING the deficit.

Also, you are incredibly ignorant of the VAST and DIVERSE economic contribution migrants have made to Australia, "outside" of one project you can name. Your opposition to your hated migrants (especially DARK SKINNED migrants from "non white" cultures) is based on utter ignorance of the factual reality of Australia's history. You're just an old man longing for a return to "white" Australia.

N....when over 20 years a $10 investment produces a $15 overall return, that's NOT a $10 loss to Australia's wealth, it's a $5 GAIN

So, our government borrows it's money at I think around 3%. so, that $10 has now cost $18. So if we repay the initial $10 then the interest of $8 we are actually behind.

I can forgive you for thinking we wouldn't have to borrow the money, because that's PRECICELY how it was before one K Rudd came along.
But sorry, I can't forgive you for your lack of math skills, especially given you are a self confessed expert in this area.

What a pity so many decided to take that gamble.

Rehctub has now just told the world that he believes Australia, since the beginning of migration, has only used 100% "borrowed" money on any migration issue.

Oh dear, I can see why poor "old" Rehctub is not Australia's treasurer. I wonder if his wife controls his pension funds? Let's hope so.

Oh dear Pericles, you and I have indeed gone over this GDP discussion at length just recently. And at the end of it we remained poles apart in our opinions.

For goodness sake it really is as clear as day that all sorts of negative things get added to GDP.

A very big thing, which is +/-neutral in the short term but strongly negative in the long term, appears as a very big plus according to our GDP indicator. This thing is our very high immigration rate.

It boosts GDP enormously, and yet the economic activity generated by it is predominantly the massive duplication of infrastructure and services, which is needed to provide the same standard of living for them as for the established population, with no net gain for established citizenry or for the country… and no net improvement in our current economic wellbeing or future economic outlook.

Fires, cyclones, illnesses, car accidents, droughts, obesity, and a thousand other bad things, have a negative effect on productivity. Of course as a result of these, GDP would be lower than it would otherwise be.

And yet all the economic activity generated by these bad things, which is just countering or repairing the damage and not at all improving the pre-damage economic situation, gets ADDED to GDP and made out to be totally positive in terms of economic prosperity.

It absolutely SHOULDN’T be! It should be left out of the GDP calculation, or perhaps be subtracted from the total.

continued

longing for a return to "white" Australia.
Nhoj,
So, you're racist as well ? Gawd you're really some specimen, you'd confuse old Charlie Darwin. I wouldn't describe you as the missing link but you for sure are a shackle pin.

<< GDP contains neither negative nor positive components >>

CORRECT Pericles. Economic activity which genuinely indicates economic advancement, improving prosperity and increasing standard of living and quality of life, gets lumped with stuff which doesn’t indicate anything of the sort…. and it is all held up as being of the same value!! If it is a big total is it positive, or negative if it ain’t so big!!

This is extremely serious stuff. It is economics 101 – only the good stuff should get counted as a positive thing!

Successive Federal treasurers, of both political idiologies (ologies of idiots) completely fail to understand this.

So how can Hockey or Bowen or the Libs or Labs possibly ever get us to a balanced budget, let alone one which will take us progressively out of debt and into surplus, for as long as they believe that ALL economic growth (most significantly that generated by high immigration) is a good thing and only a good thing??

As if their manic pandering to ONLY the supply side of the equation, without ever even bearing a thought for addressing the demand side, wasn’t bad enough, this adding of neutral and negative economic activity to the positive side of the ledger is just the pits!

We’ll look back on it in a couple of decades, when we have got our collective headspace entrenched in the imperative of achieving a sustainable society, and wonder how we could have ever been so utterly STERYUUUPID as to have had such a thing as GDP, as it is now calculated, sitting right at the core of our economic system!!

Ludwig the full quote (which you "conveniently" shortened) was, "You're just an old man longing for a return to "white" Australia". And it was directed at *YOU*.

Yep, Ludwig = a 100% racist, who fears dark skinned people from cultures other than "white" cultures. Ludwig is the classic definition of a racist.

Oops, I'm so sorry Ludwig. My post was about "Individual".

OK let's get back on topic. This thread is about the Coalition's doubling of the deficit.

So far, none of the righties here have been able to successfully refute the "fact" that the Coalition, in just 7 short months, has doubled the deficit. They've offered their usual "excuses" and "explanations", but have been 100% unsuccessful in refuting the "fact" that the deficit has DOUBLED.

none of the righties here have been able to successfully refute the "fact" that the Coalition, in just 7 short months, has doubled the deficit.
Nhoj,
Well, these are ABC figures aren't they ? Can you prove they're correct ?

Bazz,

"As soon as I saw the $8 billion to the RBA was included I knew it was
an ABC branch of the ALP fraud.
For Mhoj's information the RBA is part of the government.
For example left pocket and right pocket !
Got it ?"

Wow!

You do realise that the govt "borrowed" the $8.8 billion to give to the RBA?

It's not just a case of shifting $$$ around.

The RBA neither asked for the money or needed it, being content to build up its own reserves without paying the govt a dividend.

Eleventy Joe funnelled that "borrowed" money to the RBA so that the govt could take a regular dividend...it's a govt revenue raiser.

Got it?

I Would just ike it noted
that qld state debt=85 bilion
[owed by 3 million][collectivly]..[30,000/individualy]

and GOVT IS PANICKING...FEDERALLY.BECAUSE WE GOT 30/billion
oweD BY 22 million.. [ie INDIVIDUALly..WE owE a bit over a grand each/federally]

i claim the state debt is federal debt..WHEN HOWARD WANTED ALP
AND ALP WANTED REASON TO SPEND UP EVEN bigger/refused tobe reigned in
THOSE WHO GAINED MUST RETURN THAT//THEY LOBBIED TO BUY..[ASk ME WHY]

and federaly govt simply needs issue bonds TO PAY IT OFF
THESE GET HELD BY THE FED/AND RETURNED.AS CREDIT/THE FED HAS NO RIGHT TO ON-SELL GOVT DEBT INTOM OUR POCKETS[ITS ODIOUDS Debt/thus criminal as well]

but i have other issUES/
but..its time to move on
BUT ITS TIME TO0..TO SUE INDIVIDUALS/..AS THE NEUREMBERG DEFENCE WILL FAIL TOO...IF THEY DONT..begin locking up REAL VIOLENT-criminaLs in jails.[the real crooks]..thieves/bash aRTISTS CON MEN kiddy tapists..and ELITIST SCUM...THEN DREAD THE TIME SHORTLY that is come.

Nhoj, you are such a toss. How can you claim that I said every imigants in the past 100 years has been funded with borrowed money.

If you are trying to upset me, go right ahead, but please stick to facts, like your problem with the deficit. Are you aware that's a forecast!

Are you also aware that labors last forecast has been proven to be way under estimated.

You are typical of most Internet trolls, as once you get presented with a counter argument to your twisted logic, you try to divert the conversation and turn it around in your favor. Now that's fine, if you relied on facts.

As I said, you are a classic toss.

Butch old boy 68.5 billion has been added to the deficit in seven months
It is not in the future it is now.

rehctub,

"Are you also aware that labors last forecast has been proven to be way under estimated."

Proven by whom?

Hockey's MYEFO crock?

That's not an independent Treasury assessment....that's Mr Hockey cooking the books.

"You are typical of most Internet trolls, as once you get presented with a counter argument to your twisted logic, you try to divert the conversation and turn it around in your favor. Now that's fine, if you relied on facts."

Well, Lol!, Lol!, Lol!

When you come up with some "facts" as opposed to Hockey spin - please let us know.

Poirot, treasury providing accurate info, now there's a laugh!

butcher,

"Poirot, treasury providing accurate info, now there's a laugh!"

There really is no hope with fellas like you abounding.

Hockey tries to pretend he releases official Treasury data...and you holler "PROOF!"

I point out that it was entirely his own fiction and not an official Treasury forecast (Like PEFO) and then you belittle Treasury.

(Hockey also tried to say one of his adviser's papers containing a dodgy graph was an official Treasury document)

So carry on....you appear to be enjoying the charlatan's act.

Well, 6 pages now and we still don't have any forum righties who can show that the Coalition has not DOUBLED the deficit.

Doubling the deficit has enabled them to break their MANY and repeated promises that they would not raise tax. It's now "confirmed" by cabinet they are applying a new tax .. the debt tax.

They are lying and calling it just a "levy". It's a TAX, as any economist knows.

Toneliar is an unmitigated liar, untrustworthy and a danger to Australia's economic future and well being.

And the latest news is that the Coalition will also apply another new tax increase in the budget. It's a new tax increase on petrol. The fuel excise (a tax on petrol) will be increased, thus all motorists using petrol will PAY MORE for their petrol. Yet ANOTHER broken promise from the Coalition.

The honesty and credibility of the Coalition is now in utter tatters. It is the most dishonest government in Australia's history.

AND, they have managed to double the deficit.

Nhoj,

Ludwig is right about the costs of immigration. No one disputes that it increases total GDP and makes rich people happy with bigger markets, cheap labour, and opportunities for real estate profiteering, but what matters to most of us is whether it increases per capita GDP. If the population is below the optimum, then it probably would. For example, a little band of pioneers might have enormous natural capital per person, but be too few in number to make effective use of it. This hasn't been the case in Australia for a long time, however. The following link shows growth in GDP and growth in GDP per capita, which has been very sluggish

http://www.macrobusiness.com.au/2014/04/no-alan-population-growth-is-not-an-economic-boom/

The 2006 Productivity Commission report on immigration and their 2010/2011 annual report also say that the per capita economic benefits of immigration are too small to be important and mostly distributed to the owners of capital and the migrants themselves. See p. 6

http://www.pc.gov.au/__data/assets/pdf_file/0016/113407/annual-report-2010-11.pdf

At the same time, the upfront infrastructure costs of our massive 1.8% population growth rate are enormous. The roads, schools, hospitals, etc. are needed right away, but a new resident is likely to take 20 years to contribute enough to pay for his share of them. Jane O'Sullivan estimates $100,000 to $120,000 per person in just the government costs. The economist Ralph Musgrave did a similar estimate for the UK in 2008 and found 30,000 pounds per person for non-housing infrastructure.

http://ideas.repec.org/p/pra/mprapa/6869.html

"Immigrants do eventually pay this back – after about a generation. But by that time interest on the debt (which is not paid back) resembles the debt itself."

Where is your return on investment? We could save perhaps $20 billion by cutting immigration back to 1990s levels, dwarfing all other savings or tax measures, not counting the welfare savings from a tighter labour market.

1) Drop your gilded Paid Parental Leave scheme - will save about $5 billion per year
2) Get rid of negative gearing - will save about $13 billion per year
3) Cancel the purchase of the F-35 Joint Striker Lemons - will save $12 billion in total
4) End the diesel fuel subsidy - which is NOT the same as introducing or raising a tax - will save about $2.4 billion a year
5) Forego your egotistical and (from a debt-reduction point of view) counterproductive desire to be an "Infrastructure Prime Minister" - will save $10 billion in total
6) Drop Direct Action - will save $3 billion in total

If we really are in a "budgetary emergency", if debt, government spending and government waste really are our gravest challenges at this time, then surely the above can fall by the wayside until you fulfil your primary election 'mandate' to fix the country's finances?

Nhoj,
Since you seem to have all the criticisms please tell us what the answer is?
Please don't tell us to give it back to Labor

Chrisgaff1000, your question has already been answered. Please read the post by 579, directly above your post. You didn't even read it?

AND, they have managed to double the deficit.
Nhoj,
Where's the evidence for that ? ABC sources I imagine ? Nhoj, Nhoj, wank wank, know what I mean ?
That list by 579 does not include ALP cronie public servants who sabotage the Coalition's every attempt to rectify things.
You gave Labor several years without complaint even after ample proof of mismanagement, so don't jump the gun just yet with the Coalition.

Individual wrote, "Where do you have evidence for that" (regarding the inept Coalition's doubling of the deficit).

Poor individual, he can't read, or even click on links. Individual, please go to the first post and actually click on the link, and make at least "some" effort to ... wait for it ... READ IT. Become educated.

It shows the "proof" (not mere evidence) and the sources are:

(1) The Pre-Election Economic and Fiscal Outlook, PEFO.

(2) Senate Estimates Economics Legislation Committee.

(3) The Mid-Year Economic and Fiscal Outlook, MYEFO.

(4) Parliamentary Budget Office analysis 13th March 2014.

(5) Joe Hockey.

(6) RBA Governor, Glenn Stevens.

(7) Hansard Standing Committee on Economics

(8) Commission of Audit report "Towards Responsible Government"

(9) Treasury secretary Martin Parkinson

There's many more sources Individual, but I'm sure by the time you got to number 2 or 3 on the above list you would have lost interest, as it would all be just way too hard for "you" to comprehend.

Individual's in denial. For ideological reasons He refuses to acknowledge that the Coalition has DOUBLED the deficit.

Facts are only facts Ludwig. Nothing more, nothing less. Measuring "good" GDP and "bad" GDP is a nonsensical concept

>>...all the economic activity generated by these bad things, which is just countering or repairing the damage and not at all improving the pre-damage economic situation, gets ADDED to GDP<<

Not "added to", Ludwig. The correct term is "included in".

>>Economic activity which genuinely indicates economic advancement, improving prosperity and increasing standard of living and quality of life, gets lumped with stuff which doesn’t indicate anything of the sort…. and it is all held up as being of the same value!!<<

That's because it actually does have the same value. It cannot have any other.

The measure of things getting better is of course GDP per capita. Which continues to improve, despite the fires, cyclones and sickness, because production elsewhere in the economy keeps us ahead of the game.

If the fires became big enough, the cyclones destructive enough, and the sickness pervasive enough, GDP would suffer, and GDP per capita would follow suit. This is of course the absolute opposite of your earlier assertion of "increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc."

These events do not increase GDP. However, the economic activity associated with them - the fireman's pay, the nurses pay, the builders pay etc.etc. - are necessarily included in GDP.

How else could it be recorded?

Think of it this way: if there were no cyclones, no disease, no bushfires, would GDP decrease? Because that is what your theory would require, if their presence somehow increases GDP.

Can you see that now? Can you now recognize the fatal flaw in your assertion that "GDP... adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc"

Can you?

For ideological reasons He refuses to acknowledge that the Coalition has DOUBLED the deficit.
Nhoj,
If you know how much they have doubled it then what whas is caused by ? What did they spend money on, how did they increase the debt etc etc. Is this a serious impairment to make up for the ALP disaster or can you be on the road to recovery even with a deficit ? Qld for example pays 4 billion a year just in interest for the Labor mess. That's just interest ! Yet the employment rate has gone up. What is the fedeal employment rate, do you know ? Deficit on the world scheme of things is a handy catch phrase for anyone in opposition but what does it really do economically ? Tell us what the deficit does to our everyday life in comparison to paying interest on ALP debt ?

FACTS ARE CLEAR
joe hockey gave 9 billion to the fed..THIS IS PRE HIS OWN BUDGET/and the key question then becomes was it in labours buDGET.. if not he spent IT..SIMPLE

john joward cit 20 billion tax cuts revenue
IF ITS BUDGETED IT FAS ON HIM

how is there any debate.qld debt=85 bilion..[intrest =4 billion]
BUT THE FED DEBT-30 BILION?..YET SOME lIB YESTERDAY SAID INTREST 12 BILLION...the numbers dont add up.

HERE WE ARE.with the best house on THE STREET
EVERY OTHER HOME IS MORTGAUGED TO THE HILT..BUT WE FOR SOME REASOn want more..CREDIT..SO WE MUST 'PAY-OFF'..THE DEBt..so we can lend more to buolD MORE TO PRIVATRISE OFF TO OUr mates.at one tenth the cost price

hangon
someobes getting the short ENBD OF THE STICK
[IE THE DEBT..WHO IS GETTING THE PAQYOFF/yet we bail them out/ONY TO BORROW..IT BACK..ONY TO INCREASE THE TAXES/GIVE MORE TO its mates

when will you dear shadow..JOIN US INSTEAD OF DEFENDING THE UNDEFENSABLE/SPEND WITHIN YOUR MEANS/WE WIL ALLOW A BIGGER DEBT
Paying intrest of 4 billion to hold assetS OF 85 BILION THATS A BARGEN

thre big [ionly question]..then bevcomes what are the assets thIS 85 BILION SPENT HAS BOUGHT..[BUT NO WE ARNT GETTING EVEN THE DAMm asset..just the debt/and ever more revenue raiding ideas

qlds latest IS TO SEND OUT BILLS HOPING WE PAY
like 6 may i was in court/fined 300..yet got the bil todaY=403.50

via something called an offender 'levy'
we get the taxation/but no representation..now we get a freaking levy>

BUT THE JUDGE DIDNT ORDER NO LEVY
BUT WHEN I DONT PAY UP THEY TAKE MY LICENCE/my rego my house
FOR 3000 UNPAID FINES THEY put a lien on mY HOME/350.000..home

now tHEY GOING TO Collect. aN offender levy

by what right>?

http://rss.infowars.com/20140507_Wed_Alex.mp3

Poirot, just confirming we are referring to the same useless M Swan, the same useless person who told us in excess of ome hundred times that we would have a surplus.

Use well, if you think his forecasts were accurate, I feel for you as you have been conned.

Nojh and 579, I agree with dumping the PPS, in my view it's a joke, always has been. In fact, I think it was a bait to catch gullible voters and they took the bait, hook, line and sinker. I say this because even blind Freddie would have known it was unaffordable. Just like the NDIS and Gonski, they are all pipe dreams.

Negative gearing, here we go again.

May I suggest in order to do away with negative gearing, the first step is to secure affordable accommodation for would be renters, because investors are going to pull out of the property market and invest elsewhere. Sought that out first, then you can have a serious look at NG. Of all those who call for an end to NG, including one lead economist, this appears to be one area none of them will respond to. Are you guys going to join that list?

Diesel subsidy
Mining and agriculture are the too larges beneficiaries of this scheme and, with both showing signs of retraction, do you really think taking this away is going to be a positive move?

The whole problem you people simply won't face up to is that prior to 2007, we had ZERO DEBT and $20 BILLION in the bank.

Look where labor left off after just six years.

Dear Mr. Nhoj,

It seems you have learned little from your exit interview (Posted by spindoc, Wednesday, 7 May 2014 11:34:58 AM), and you continue to froth about the forecast “doubling” of the ALP deficit by the LNP.

I’m not sure precisely what it is about this forecast that grieves you so much? It is only valid until the budget comes down anyway, at which point we will have the actual expense and revenue figures, so it remains a “so what” until then.

It could be your “Unicorn” of the week in which case it is fast disappearing over the horizon.

Is it the case that you seek to shift the blame for Australia’s debt and deficit to the LNP by pointing to revised forecasts since December 7, 2013, in order to draw attention away from the last six years of ALP economics which got us into this mess in the first place?

If this is the case then you can take comfort from the fact that you are not to blame because it was not your original thought, the ABC and ALP thought of it first, you just borrowed their opinion.

All the answers you seek are in the link to the ABC that you provided.

The difference between the ALP’s August PEFO and the December 7 MYEFO is that the former was based on ALP assumptions of “no policy change” and the MYEFO was based on the economic assumptions given to treasury by the LNP.

The ABC says; “The first, the Pre-Election Economic and Fiscal Outlook (PEFO), was released in August by Treasury. It was based on a "no policy change" scenario, using assumptions and fiscal rules underpinning medium-term projections adopted by the former Labor government”.

“The second, the Mid-Year Economic and Fiscal Outlook (MYEFO) was released in December by the Government. It was based on assumptions adopted by the Coalition, following advice from Treasury”.

Cont’

We are now nearing 100 billion in the bank but that is not worth mentioning.
Abbott would not give a single cent about renters welfare.
The miners can pay the tax on fuel as well as the mining tax that does not earn any money.
We keep hearing from Joe Hockey we need to "fix the budget". The fact is we left the budget in sound shape. In all of our budgets from 2008-09 onwards, including in the last budget, we faced up to the challenge of finding large savings. Many of our measures designed to protect the strength of the budget – such as means testing the private health rebate which were opposed outright by Mr Abbott and Mr Hockey.

Cont’d

It may not be that obvious to you, but there are a number of reasons for this.

Firstly, the LNP is now in government.
Secondly, The ALP failed to get any of their economic projections right.
Thirdly, the ALP repeatedly failed to deliver their promised surplus.
Fourthly, it was every single flawed “assumption” the ALP applied that made the growing deficit look like a surplus,
Fifthly, the ALP used “frozen” single point indicators to avoid scrutiny of their disastrous upward trend lines,
and lastly, not only did the surpluses fail to eventuate, but every single deficit that replaced these “surpluses” was greater than the last.

Therefore it would seem entirely reasonable that anything to do with ALP economic management (sic.) should be tossed out as quickly as possible.

ABC Fact Check April 8, 2014; “Mr. Hockey’s $123 bn deficit figure comes from last year’s MYEFO.. Mr. Hockey’s $667 bn debt figure comes from Treasury projections for 2023-24, which also appeared in last year’s MYEFO”

It might help if you read your own links rather than emotionally “feeling” them.

I realize you are a new troll to this site however, you should be aware that OLO’ers have become increasingly aware of the application of progressive rhetoric, platitudes and narrative theory as a means of changing reality into palatable fiction. Sadly for the progressives, reality has a nasty bite.

So now that we have “agreed” on the material facts, and how each of these has been derived, what precisely is the case that you are trying to make?

If your case is that the “yet to be evidenced sins” of the LNP even before their first budget, are somehow greater than six years of economic tragedy from the ALP/Greens, then you don’t have long to wait do you?

My guess would be that the shear terror being expressed here on OLO by progressives, is that this budget might just turn out to be a “stop the boats” moment

Alright 579, so if we do all the things that you suggest, we’d save ~45.4billion$ per annum, of which about 25b is a once-off saving and 20b an ongoing annual saving.

Meanwhile, it is costing us in the order of 80b pa to duplicate basic infrastructure for new residents, which mostly come from our absurdly high immigration intake.

As Divergence says:

<< the upfront infrastructure costs of our massive 1.8% population growth rate are enormous. >>

Perhaps now we can appreciate just how enormous.

579, you wrote:

<< If we really are in a "budgetary emergency", if debt, government spending and government waste really are our gravest challenges at this time, then surely the above can fall by the wayside until you fulfil your primary election 'mandate' to fix the country's finances? >>

How about a big reduction in immigration? Halving it would save in the order of 30b pa.

If we really are in a budget emergency, then the MOST IMPORTANT thing that can be done is to significantly reduce immigration and thus greatly reduce the demand for government / taxpayer expenditure.

And the really great thing about it is that it can be done very very easily.... a million times more easily than for anything else of similar magnitude! The tough measures that you mentioned all added together would be of similar magnitude, and just imagine how difficult it would be to get them all implemented!

And what’s more; it would be very well supported by the general community, which really is not in favour of the current immigration policy.

Abbott has an agenda, and that does not include saving money, he just wants people to pay for his agenda.
The states are to sell everything they have access to but no money is to go for debt reduction.
QLD is 85 billion in debt, the only state to show a surplus is Victoria.
Abbott's spending is over and above debt, all the budgetary changes will do is make the deficit less. Would be far better to raise the GST, instead of playing around with hospitals and education and taxes which are not taxes. Giving money back to miners is absolute crap.
Abbott loosened the strings on 457 visas, so i don,t think your immigration policy is in the pipeline at all. Are you happy with all that red tape being cut.

<< Not "added to", Ludwig. The correct term is "included in". >>

You’re just playing with word Pericles.

YES, economic activity that is generated directly as a result of disasters, accidents, illnesses and immigration certainly does get included in GDP.

I’m so pleased you can see that.

But NO, it does certainly NOT have the same value as the sort of economic growth that genuinely indicates a healthy and improving economy.

Actually, in our Federal government’s wonky world of pseudoeconomics, it does. But it absolutely SHOULDN’T!

Anyway, we’ve been over all of this. No point in doing it again. We both gave it our best shot just recently. We aren’t going to find agreement here.

I do note however that you don’t talk much about the immigration factor, which is probably much bigger than all the disaster/accident/illness type of economic activity that get added to (or including in) GDP.

The amount of economic activity generated directly as a result of immigration is staggering – and yet practically every bit of it is just duplication of what we already have, without it leading to improvements for the pre-existing population.

I keep making this all-important point, and you keep brushing past it.

Immigration = very large part of GDP = very strong indication of economic wellbeing and prosperity.

And yet we are seeing practically no change in per-capita GDP as a result of this immigration-induced economic activity. And we are seeing all sorts of negative aspects steadily worsening as a result of immigration / population growth.

On the contrary. They are quite straightforward, unambiguous words, Ludwig.

>>You’re just playing with word Pericles... We aren’t going to find agreement here.<<

So long as you insist on repeating that farcical idea that bushfires, cyclones, earthquakes, disease etc. add to our GDP, I will continue to point out just how ridiculous a concept that is.

I have carefully explained, repeatedly, how bushfires, cyclones, earthquakes, disease etc. can threaten (i.e. reduce) our GDP performance. So when you come back, time and time again, with the mindless mantra that somehow there is "increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol" (I quote verbatim), I can only once again draw attention to your economic illiteracy.

Unfortunately, you then translate this illiteracy into your standard tirade against immigration.

>>The amount of economic activity generated directly as a result of immigration is staggering – and yet practically every bit of it is just duplication of what we already have, without it leading to improvements for the pre-existing population. I keep making this all-important point, and you keep brushing past it.<<

This is the sort of dog-in-the-manger attitude that gives this country such a bad name, when compared to other rich countries. What you are effectively saying is that the "pre-existing population" should not in any way share their good fortune with anyone else, despite the fact that it does them no personal harm. Our population - wherever it is coming from - is performing well, economically, and when this is shared out (as shown in per capita GDP), we keep becoming better off.

Year after year.

The short-sightedness of your vision for fortress Australia will inevitably end in an increasing isolation from the rest of the world, at which point we will realize that we need them, far more than they need us.

And that will really hurt. Even in your privileged corner of far-North Queensland.

Tax'Em Tony is about to add another great big tax, to his long list of broken tax promises! This time its a 'Petrol Tax' with not one cent of it being made available for the development of renewable sources of energy or for the provision of public transport. This tax will impact once again on the battlers as they are forced into private cars because the conservatives fail to provide public transport.

It's now up to page 9, and not even ONE of the radical right whingers on this forum has been able to show that the Coalition has not DOUBLED the deficit.

Yep, Toneliar Abbott (Tax'Em Tony) has DOUBLED Australia's deficit in just 7 months.

<< Tax'Em Tony is about to add another great big tax, to his long list of broken tax promises! This time its a 'Petrol Tax' with not one cent of it being made available for the development of renewable sources of energy or for the provision of public transport. >>

Yes Paul, this looks very likely.

Revenue from this GBNT (great big new tax) is mooted to be spent on new roads.

Well! How about that!

And why do we constantly need lots and lots of new roads?

Couldn’t have anything to do with our massive immigration intake, could it?

New roads are just part of the duplication of basic infrastructure that is needed to support immigration. It is one of the things that all the established residents (taxpayers) are paying for, which is really not returning anything positive for them, only for the new residents.

So…. if we were to greatly reduce immigration, we would greatly reduce the need for new roads and thus the need for this new tax.

We should all be telling Abbott, in no uncertain terms, that he should be reducing immigration instead of thinking about introducing new taxes like this.

Australia is full of anti migrant bigots. Ludwig wants "them" out and "us" in.

These anti migrant bigots existed in the 1800s (whilst they were willfully murdering thousands of aboriginal people ... yep the white migrants were murdering aboriginal people who got in their way. Oh the irony). The anti migrant bigots were VERY virulent in the first half of the 1900s. In the 1950s/60s/70s and 80s these hate filled bigots detested the presence here of Italian, Greek, Arab, Chinese etc etc migrants... but NEVER "white English" migrants. And so it continues on to this very day; the anti migrant bigots just can't stand migrants being here. They see migration as ONLY a minus, "they take our jobs" "they rape our daughters" "we need to build extra roads for them" "they live forever in luxury on welfare" "they're not of 'white' culture like us".

Luckily, the anti migrant bigots are currently a small minority.

Ludwig,
Are you so paranoid about migrants that you equate all government expenditure to immigration.

<<So…. if we were to greatly reduce immigration, we would greatly reduce the need for new roads and thus the need for this new tax.>>

That is simply a ridiculous statement!

When governments raise money from fossil fuels I want to see it committed to sustainable alternatives, including efficient public transport systems.

We've now reached page 10, and none of the forum righties have proven that the coalition has not DOUBLED the deficit.

I guess it's a case of *CASE CLOSED*.

Yep, Tax'Em Tony and Joe Cockey have DOUBLED the deficit in just 7 months.

The thing is we were all immigrants at one time or another, stagnation would happen without intake.
Hockey has had meetings and Abbott has an agenda, and that is to spend money, It will be interesting to see which way the bucket tips.
Keep an eye on debt levels, like the rest of au, after Abbott's dose of verbal diarrhea before the election, he has lost any credibility he ever had. AU could very well go into a period of negative confidence, if not recession.

Paul, what a shocker of a response!

Here I was thinking that you and I weren’t too far apart in our views. But it seems that you are every bit as bad as the worst red-neck and rampantly pro-growth Lib/Labs!

For goodness sake mate, can’t you appreciate the imperative for us to achieve a sustainable society? Surely this sits right at the core of green philosophy and doctrine, doesn’t it?

And can’t you see how totally at odds rapid population growth is with that ideal… or I should say: necessity ?

I wrote:

<< So…. if we were to greatly reduce immigration, we would greatly reduce the need for new roads and thus the need for this new tax. >>

You replied:

<< That is simply a ridiculous statement! >>

Why is it ridiculous Paul? Please, have a good long hard think about it.

<< When governments raise money from fossil fuels I want to see it committed to sustainable alternatives, including efficient public transport systems. >>

Yes yes YES!!

NOT committed to ever-more of the same that we’ve got now. Not committed to the building of ever-more roads, which is made necessary directly because of our very high rate of population growth.

Paul, you being a Green and all, I would have thought that you’d basically be agreeing with me here.

Ludwig, there are other factors which come into play when decisions are made to build new roads, other than migration alone, causing population increase. I claim the world is overpopulated at 7.3 billion, not sustainable, we are part of that population explosion even though our 23 million might seem insignificant compared to the total. We have had numerous discussions about this, can Australia simply act in isolation and what would be the consequences of us taking unilateral action to stagnate our population.
I see my own city Sydney as badly needing better planing as far as population is concerned. I am all in favor of decentralisation something that seemed to go into the to hard basket years ago,and now Sydney and Melbourne are paying the penalty for that lack of foresight.

Yep, Toneliar Abbott (Tax'Em Tony) has DOUBLED Australia's deficit in just 7 months.
Nhoj,
WHERE is the evidence ?

<< …there are other factors which come into play when decisions are made to build new roads, other than migration alone… >>

Of course there are Paul. But you can surely appreciate that our current huge rate of population growth is a huge factor in creating demand for more roads.

<< …can Australia simply act in isolation… >>

We wouldn’t be doing that if we achieved a stable population and a sustainable society. We’d be setting a great example for the rest of the world. And we’d still be giving a lot of international aid, be helping countries to deal with their population and sustainability problems, and exporting food, minerals and all sorts of other stuff.

<< …stagnate our population. >>

You are thinking about this in the wrong way. A stable population does not mean stagnation.

Please Paul; you simply cannot be a real Green if you are going to pander to never-ending population growth, and all the negatives that go with it.

You think the world is overpopulated and you presumably don’t want the global population to get any bigger. Well, why do you think differently about Australia?

You can see that Sydney badly needs better planning as far as population is concerned, but you can’t see that slowing the rate of population growth in Sydney (and the whole country) might just a fundamental part of improved planning.

Anyway, this is off to the side of the main issue.

My point is that as far as the budget is concerned and indeed the overall economy, our population growth rate, which is made up largely by immigration, is a HUGE factor…. yet it is going ENTIRELY unaddressed by Hockey/Abbott... and Bowen/Shorten are not picking them up on this enormous and critical oversight!

<< I have carefully explained, repeatedly, how bushfires, cyclones, earthquakes, disease etc. can threaten (i.e. reduce) our GDP performance. >>

Yes you have Pericles. And I have said that of course they do!!

See this post on this very thread: http://forum.onlineopinion.com.au/thread.asp?discussion=6365#188311

I said in that post:

>> Fires, cyclones, illnesses, car accidents, droughts, obesity, and a thousand other bad things, have a negative effect on productivity. Of course as a result of these, GDP would be lower than it would otherwise be. <<

So why then does economic activity that is spurred by these things get added to GDP ?? ?? ??

Come on Pericles, you need to concede that you are just completely off the mark with this particular subissue!

<< What you are effectively saying is that the "pre-existing population" should not in any way share their good fortune with anyone else… >>

No I’m not. You’re getting worked up again. And when you do that you make silly polarised statements like this. At net zero immigration, our immigration program would still be quite significant. And of course established citizens will continue to pay for the up-front for the needs of these new residents.

<< The short-sightedness of your vision for fortress Australia… >>

Pericles, we were having a polite conversation. Seems like you just can’t do that for very long, eh?

You know full well that net zero immigration does not equate to anything like a ‘fortress Australia’ mentality. Shame on you for asserting that I hold this sort of view when you know full well that I don’t.

You live in Sydney, right in the guts of the place. Well, how can you not see the issues with population pressure and continued rapid population growth? It affects Sydney more than anywhere else in the country. How can you not see that a somewhat lower rate of immigration would be a damn good idea, at least until we got the budget back into order?

And how can continue to uphold such a fundamentally flawed economic indicator as GDP??

Your views defy all logic!! !! !!

Poor "old" Individual wrote, "where is the evidence?", regarding Tax'Em Tony's doubling of the deficit.

Individual, I told you where it is in my first post. I again told you where it is in my 2nd post on page 7.

Now for the third time I'll tell you where it is .... refer to my 2nd post on page 7, and refer to my opening post.

There ya go Individual. That's where it is. No need to thank me. I'm so happy that I had this chance to direct you towards the empirical "facts", for the third time in this thread. Please try to actually read those facts this time. Believe it or not, education is good for you Individual.

This is just such a total beat-up, typical of welded-on socialist hypocrites.

Evidence refuting Nhoj's indictment, quoted directly from the ABC Fact Check article quoted (and linked) by Nhoj in his opening defamatory posting are:

1. "Governor Glenn Stevens told the Standing Committee on Economics in February 2013 that the RBA would have preferred that Mr Swan had not depleted the bank's capital by withdrawing $500 million in dividends ahead of schedule to pay down the government deficit."

(My question: How much in total did Swan and Gillard rip from the RBA?)

2. "The MYEFO said that over the forward estimates a $54.3 billion deterioration in the projected combined deficit since the PEFO was caused by "parameter and other variations" changes.

These included:

. changes to the parameters for determining tax receipts, which will result in the government receiving $37.8 billion less over the forward estimates than forecast in the PEFO;
. a change to the terms of trade methodology, reducing economic growth forecasts, causing a $2 billion hit to the bottom line over the forward estimates;
. a change in the projected unemployment rate, leading to higher benefits payments totaling $3.7 billion extra

Mr Bowen accurately quotes the MYEFO in stating that the economic assumptions have changed, with a resulting negative effect on the budget deficit."

(Former Treasurer Bowen here concurs that the former PEFO forecasts were IN ERROR - to the tune of $43.5 billion.)

(Mostly reduced revenue, not increased spending.)

3. "He (Treasurer Hockey) suggested Labor was to blame for the need for changed assumptions. "The methodology that they [Treasury] have used in MYEFO actually confirms the fact that Labor left the legacy of increasing deficits to $123 billion..."

4. "It remains to be seen how the two sets of forecasts stand the test of time,"

5. " but as of today, Mr Bowen's claim checks out."

(Mr Bowen's claim: that the forecast deficit has doubled. Good boy, he can count. Does he actually explain why? No on your Nelly!)

Beat up, to cover Labor's ineptitude.

Round and round we go, Ludwig.

>>So why then does economic activity that is spurred by these things get added to GDP<<

It doesn't. No matter how many times you say it.

It does not get added to GDP.

It does not increase GDP, as you have argued.

Compare this statement of yours...

>>Fires, cyclones, illnesses, car accidents, droughts, obesity, and a thousand other bad things, have a negative effect on productivity. Of course as a result of these, GDP would be lower than it would otherwise be<<

...with this one:

>>[there is] increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol<<

One of these must be wrong. Yet you are the author of both, are you not?

And you have the sheer chutzpah to tell me...

>>Your views defy all logic!! !! !!<<

If you cannot see that your two statements are entirely contradictory, then you are certainly the wrong person to talk about logic.

Saltpetre:

(1) $500 million is a mere pittance. The 4 year deficit is $123 BILLION. So you *FAIL*, as you have not shown that the deficit has not doubled under the coalition.

(2) You've just repeated what's previously been said by me .. "the economic assumptions have changed under the coalition". That's one of the reasons why the coalition has more than DOUBLED the deficit. Thanks for that. So you *FAIL* again, as you have not shown that the deficit has not doubled under the coalition.

(3) Hockey's merely playing politics and "blaming Labor". DUH!! Hockey did NOT deny that under the coalition the deficit has more than DOUBLED. So you *FAIL* once more, as you have not shown that the deficit has not doubled under the coalition.

(4) True. And you *FAIL* again, as this doesn't prove that the deficit has not doubled under the coalition.

(5) True. And you *FAIL* as usual, as this "fact" doesn't prove that the deficit has not doubled under the coalition.

RESULT = Saltpetre has been unable to prove that the deficit has not doubled under the coalition.

FINAL RESULT = Australia's deficit has more than DOUBLED under the coalition.

Assumptions made by the PBO.
Nhoj,
well, that sums it up alright.

digging a hole=economic activity..[if paiD]
FILLING-IN THE SAME HOLE/PAID=ECONOMIC ACTIVITY

http://www.google.com.au/search?q=gdp+economic+activity&

http://countrydata.bvdep.com/version-2012413/EIU/Help/measuringeconomicactivity.htm

The relationship between the three measures is straightforward:GDP (gross domestic product)+ net property income from abroad (rent, interest, profits and dividends)= GNP (gross national product)- capital consumption (depreciation)= NNP (net national product)

Choosing between GDP, GNP and NNPNet national product (NNP) is the most comprehensive measure of economic activity, but it is of little practical value due to the problems of accounting for depreciation.

Gross concepts are more useful.Analysts tend to say that GDP is a better measure than GNP, and that now seems to have been accepted by all the major industrial countries.

EDITED

In the short term a large change in total net property income has only a minor effect on GDP. When reviewing longer-term trends, it is advisable to check net property income to see if it is making GNP grow faster than GDP.

Capital consumption

Capital consumption is not identifiable from a set of transactions; it can only be imputed by a system of conventions.

GDP is measured gross - ie total new investment counts in GDP even though some of it is replacing obsolete plant and equipment. But NNP is a net concept, and so capital consumption is subtracted. But the rate at which investments are depreciated is essentially a decision made by statisticians.

Getting the depreciation rate wrong will affect both figures for NNP and data on the capital stock in an economy.Net material productSome countries, mainly centrally planned economies, have used net material product (NMP) to measure overall economic activity.

EDITED

Some of the exclusions can be identified elsewhere. For example, environmental costs are seen in statistics on pollution and most countries report known oil or coal reserves (although these estimates may be over-optimistic or clouded by genuine ignorance about the size of underground reserves).

One other point to note is that the more advanced government statistical agencies include in GDP an allowance for the imputed rent paid by home owner-occupiers. This avoids an apparent change in national output because of any switch between owner-occupation and renting.Surveys and sampling

<< Round and round we go, Ludwig. >>

Indeed we do, Pericles.

<< It does not get added to GDP. >>

Yes it does.

No it doesn't. Yes it does. No it doesn't. Yes it does!! Round and round the mulberry bush we go. Oh what fun!!

Disasters, accidents, illness and the like reduce GDP, compared to a paradigm free of these negative influences.

And yet the economic activity spurred by the need to rebuild and get back on track after a cyclone or flood or fire, or that occurs as a result of car accidents or smoking-related illness or a myriad other things, gets added to (or included in) GDP.

But this economic activity is just countering the negative aspects of these things. It is attempting to get us from a negative position back to a neutral one.

And yet its addition to GDP would have us believe that it is activity that is taking the economy forward.

GDP is our baseline economic indicator. The bigger it is at the end of each financial year, the better we are deemed to be travelling economically as a nation. And yet it includes this sort of economic activity, which it so blatantly obviously should NOT include.

And when it comes to the massive economic activity spurred by population growth, which is not taking our economy forward, but rather is just battling to keep the same level of everything up in the face of enormous pressure upon services, infrastructure, environment, etc that is rendered by this pop growth, this is where GDP really gravely falls down as a primary indicator of our economic wellbeing.

You can’t see this Pericles! Or if you can (and I’m sure you can, because it really is very simple and obvious), you for some unknown reason just refuse to acknowledge it! And yet you think you have a handle on the economic analysis! Wow!

Your views on this subject do indeed defy all logic, and right at the most basic level!

Your views on this subject do indeed defy all logic, and right at the most basic level!
Ludwig,
I suppose for people like you, yes.
For those not sucked in by the expert gobbledeegook it is just that, gobbledeegook.
We've been listening to all these financial & economic experts & we even had many of them voted into several layers of Government yet we're still listening to the same gobbledeegook. When will there be some real factual rhetoric backed by hands-on, bird in the hand proof ?
One side says this, the other says that. Meanwhile the basic worker is still being fleeced to no end. Where HAS all the money gone & where IS all the money going. All these fancy acronyms are merely to pull the wool over the publics' eyes which is very easily done because the bulk of the public is more concerned about making ends meet in the lucky country.
Like I quoted from an email in a now disappeared post.

This tells you a lot about our government and our economic/financial
culture:
Seems we constantly hear about how the Australian Old Age Pension
Plan could run out of money. How come we never hear about
welfare running out of money? What's interesting
is the first group "worked for" their money, but
the second group didn't.Think about it.....
Ah yes and the last parliamentarian payrise too.
This is what's important to the average citizen not all this academic waffle by experts who never produce anything let alone proof of the validity of their waffle repeated in parrot fashion by the backyard economic experts.

‘morning Nhoj,

My, My. What a squawker you turned out to be?

OLO’ers have FAILED, FAILED, FAILED!

At least you have confirmed that this thread was never about economics, just another Unicorn to divert attention from ALP/Greens budget disasters.

You have successfully concluded that everyone has failed to disprove that 1 + 1 has doubled the original number?

Congratulations, is that it?

Does 2 + 6 – 4 double the original number or is that beyond you?

Having borrowed opinion of Chris Bowen and the ABC, now you cannot respond to the economics when called out, because you adopted their opinion and failed to think it through.

It’s not long ago that Madame Poirot tried the same thing from the same sources with the IMF comments about MYEFO, she face planted and abandoned her own thread.

http://forum.onlineopinion.com.au/thread.asp?discussion=6330&page=0#186361

It is just possible that under your very thin veneer you are not just another squawking progressive, that you did not offer us just another Unicorn to distract from ALP failures, you did not borrow the opinion of others, you do understand the significance of economic assumptions, that this was not just another beat up and that you do indeed have the facts to back your assertions.

Why was Bowens 2013 PBO forecast based on the economic assumption of 2% spending 2017 to 2024 when expenditure was running at 3.5%?

How did Swan manage to predict so many surpluses but kept delivering deficits?

How much of the “doubling” of MYEFO expenditure is related to funding Gonski for States that did not sign on?

What were the assumption differences between PEFO and MYEFO and why?

Why is so important to restore Reserve Bank funding and why was it taken out in the first place?

I’ll give you a clue otherwise you will never get it. The answer is the same for all questions, can you work it out Einstein?

Poor Spindoc. I can see why you call yourself "Spin"doc.

Yep poor ol' "Spin"doc, doing his best to "excuse" and "explain" the DOUBLING of the deficit, all based on his dogma and ideology in defense of his right wing political heroes. If it was Labor that's currently in power, and THEY doubled the deficit in the last 7 months, I bet poor "Spin"doc would be writing lengthy posts of outrage against the hated villains.. Labor.

Drop your right wing political correctness "Spin"doc, and admit that the coalition has DOUBLED the deficit in 7 months.

Indi,

>waffle repeated in parrot fashion by the backyard economic experts.<

Sums up Nhoj - excepting 'dunce' would be a better final descriptor.

Nhoj has provided no 'proof', just a regurgitation of Labor 'spin'.

Sure, 4-year forward estimated deficit (supposedly) of $123 billion, of which $68 billion (approx) is due to Labor PEFO (and earlier MYEFO) mis-calculation and deception (to make them look less fiscally challenged), including a host of UN-FUNDED programs neatly hidden 'under the rug'.
Labor has been the absolute champion of promises it could absolutely NOT deliver.
And there is no way of wriggling out of these FACTS.

In 6 years in government, Labor never got it right once - time after time 'guaranteeing' reduced deficits and a return to budget surplus, 'just over the horizon', until finally forced to admit they got it just so WRONG.
Wayne Swan, champion 'illusionist'.
Why in heaven's name would anyone trust Shorten or Bowen (or Labor in general) when it comes to the real facts or when it comes to fiscal competence?

Name me a Labor government which has produced a surplus - or even a manageable deficit.

Who would YOU trust to get us out of a Labor-generated fiscal 'black hole'?

Nhoj a pragmatist, or a realist? No, just opinionated.
It's just so sad really. Potential promise, misguided, unfulfilled.

As for Luddy, I think he has a point.
Disaster restorations, and 'relief', may add to GNP (through construction activity), but in the end you're back to square-one. The input has not generated an ongoing increase in productivity (just a restoration of the status quo), but has incurred taxpayer expenditure - which will have to be recovered from somewhere, won't it.

Immigration may add to GNP, but does it add to GDP? The 'theory' would say that it does - over the long term, IF it's the right kind of immigration and IF the government(s) can balance the books along the way.

‘morning Nhoj,

You said << Drop your right wing political correctness "Spin"doc, and admit that the coalition has DOUBLED the deficit in 7 months >>

I think you are going to have to point out where I have denied the doubling of the deficit under Hockey anywhere on this thread. On the contrary I not only used your links to confirm it, I also used your links to show how the new deficit was derived.

To quote you and confirm I have indeed actually agreed with you, you said;

<< Spindoc, thanks for acknowledging that the Coalition has DOUBLED the deficit. >>
Posted by Nhoj, Wednesday, 7 May 2014 4:26:58 PM

It is a traditional courtesy on OLO, that when you mouth off and get it wrong you apologize.

So it would be nice if you started with that apology and then see if you can answer the questions posed. It should be easy for a thinker like you as the same answer fits all questions.

Or are you going to do the dreaded “Poirot”?

I can't think of anything except Nhoj Nhoj wank wank know what I mean ?
Fancy citing the ABC & Chris Bowen as reliable sources ?

Good stuff, Spindoc.

You have Nhoj on the ropes. He probably wont come out next round.

"Spin"doc, ah at last you finally openly admit you "confirm it" regarding the coalition's DOUBLING of the deficit in a mere 7 months. Now that wasn't too hard to admit was it? No of course not.

So it's congratulations to "Spin"doc for agreeing with "Fact Check" that the coalition has DOUBLED the deficit.

You're the first rightie here who has agreed with the "Fact Check" conclusion. There ya go "Spin"doc, that wasn't too painful for you, the world didn't end and your hero Tax'Em Tony is still alive.

Now, SPQR and Saltpetre it's your turn. Why can't you be good boys (oops I mean old men) like "Spindoc" and openly admit that the coalition has DOUBLED the deficit?

Come on fellas, you can do it.

Ah Nhoj,

What a mendacious, cheating, obfuscating, abusive, vacuous little weasel you turned out to be.

Nobody can force you to apologize of course, but in failing to do so you are forever tarnished on OLO.

You have relinquished any respect or credibility you might have had. Your future posts on OLO will be met with the single response, Ah yes, The gutless jelly back.

How does a man without honor face looking at such a miserable “self” in a mirror each day?

“Honor is like an island, rugged and without shores; once we have left it, we can never return.” Nicolas Boileau.

I guess answering the questions is also off the menu Nhoj?

Thought so.

"Spin"doc is really, really annoyed that I finally got him to openly admit that he agrees with the "Fact Check" conclusion ... that the coalition has DOUBLED the deficit in a mere 7 months.

Thanks "Spin"doc for agreeing with the "Fact Check" conclusion.

Wow, Spinner,

Sometimes I just love OLO!

Go for it, bruiser; with you on this one; both barrels.

(But maybe it's a lost cause.)

Hi Salty,

Yeh, it’s sad that sometimes it comes to this.

I was a bit sus on Nhoj early on, the signs started to emerge of systemic patronizing abuse and bullying. Referring to posters that did not agree or challenged the rhetoric as “poor old individual”, “poor spindoc” and “poor old rehctub”. This soon degenerated into being accused of being racists and bigots for any opinion.

In the end Nhoj just wanted to get off the thread because he had been sprung, but the poor little thing couldn’t find the exit?

Look, I don’t mind the odd troll, we can all get a bit intense at times, but I have to wonder about the mentality of those who derive all their jollies from being such little tossers. They must be terrible unhappy specimens.

I’m sure “it” will be back, perhaps with a name change. I see we are already getting the “action replays” of the same post over and over again, four repeats already. It’s possible that the “thing” has already had a brain snap or developed some serious sociological disorder.

Happy days, enjoy your weekend.

Nhoj,

Can you fill me in. Are the Flat Earth Society, aka 'Usual Suspects' still claiming Tax Em' Tony hasn't DOUBLED Australia's deficit in 7 months.
They need not worry, Tax Em' Tony has big plans, mighty big plans. First off its the great big 'Battlers Tax' and a gigantic hike in
'Petrol Tax' all along giving billionaire miners no tax at all, by dumping the 'Mining Tax'. Added to this Tax Em' Tony will ditch the 'Carbon Tax' for the Big Polluters, Soon Tax Em' Tony plans to up the Goods and Services Tax to 15%. Someones got to pay for all those handouts to the Big End of Town! Wow, and it looks like the battlers are going to cop it in the neck!

By putting three cents on fuel they may as well have upped the GST by 3 % That will affect everything we buy. IT'S GST by stealth.

You too, Spinner, have a good one.

I guess there's no hope for some of the welded-on socialist fraternity, they're so deep in their own 'spin' that maybe even a D12 would have trouble digging them out.

So be it; it takes all kinds to make a genuine Christmas Pudding.

Paul, there's only one of them who's admitted the coalition has doubled the deficit, and that's "Spin"doc. He's admitted that the "Fact Check" conclusion is accurate, despite being in love with Tax'Em Tony (Toneliar).

All the other radical righties here are still in denial about the "Fact Check" conclusion.

These old time forum righties (there's only about 5 or 6 of them on the forum) hate me being here, primarily because on several different threads I have outed them as overt racists and "white Australia" adherents. Hence the strange, immature name calling in the first post on this page from "Spin"doc --- so hilarious and funny.

More obfuscation, Ludwig. Playing silly games like this doesn't change matters one iota:

>>Yes it does. No it doesn't. Yes it does. No it doesn't. Yes it does!! Round and round the mulberry bush we go. Oh what fun!!<<

Aren't you tired of it by now?

>>And yet the economic activity spurred by the need to rebuild and get back on track after a cyclone or flood or fire, or that occurs as a result of car accidents or smoking-related illness or a myriad other things, gets added to (or included in) GDP<<

Included in. Not added to. There is a difference. Let's say you are offered a job that pays $1,000 a week. Would you see a difference in your pocket if your travel expenses were a) included in or b) added to that figure?

You really should try to get your head around this.

The basic problem you have is that on the one hand, you accept the reality...

>>Fires, cyclones, illnesses, car accidents, droughts, obesity, and a thousand other bad things, have a negative effect on productivity. Of course as a result of these, GDP would be lower than it would otherwise be<<

...and on the other, you deny it

>>[there is] increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol<<

And still, you continue to make a spectacle of yourself with comments like this:

>>And yet its addition to GDP would have us believe that it is activity that is taking the economy forward.<<

Once more, let me be quite specific.

These activities you are fixated upon do not of themselves increase GDP.

Just because you are unhappy with the concept of GDP does not mean you can pretend it means something else. If you would like to employ a different measure - like, perhaps, simply measuring the things you deem to be "good" - by all means go ahead and do so.

Unfortunately, you will find that it is utterly valueless as a measure of any economic reality you can identify. Or even imagine.

<< As for Luddy, I think he has a point. Disaster restorations, and 'relief', may add to GNP (through construction activity), but in the end you're back to square-one. The input has not generated an ongoing increase in productivity (just a restoration of the status quo)… >>

Thankyou Saltpetre. I am pleased that someone else can see this fundamentally important point and is interested enough to comment on it.

Pericles, let’s look at the definition of GDP:

The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

http://www.investopedia.com/terms/g/gdp.asp

When goods gets damaged or destroyed by a fire or flood, they need to be replaced to +/- the same extent that they existed prior to the disaster.

By definition, all of this gets included in GDP, although it is taking us from a negative situation back to a neutral situation, the same that existed prior to the disaster. It is not taking us forward in terms of productivity or economic prosperity. Not at all. It is simply taking us back to the pre-existing situation.

So it absolutely should NOT be added to or included within the GDP total!

Now, how are you going to counter this, Pericles?

Immigration demands ever-more goods and services, all of which get added to GDP, by definition. And yet it is, as with disasters and illnesses, entirely a matter of counteracting the negative aspects of immigration, and is not at all, or at best only just barely, producing any REAL increases in economic prosperity.

So again; immigration results in very large additions to GDP or inclusions in the GDP total. But NONE of it, or at best; practically none, actually does what GDP indicates it does!

GDP indicates that the entire monetary value of all goods and services is GOOD, and is taking us into a better economic position. And yet a great deal of what is added to it, or included in the total, is doing NOTHING OF THE SORT!

I hope that by putting this basic message, which I have expressed to you many times before, in somewhat different words, you will at last see the logic.

It is amusing how Pericles and Nhoj first try to claim that there is a per capita benefit to mass migration and then pull out the race card when their economic argument is shot out of the water. It never occurs to them that we might be concerned about the doubling of our population every 38 years, with all sorts of negative consequences for our environment, our security, and our quality of life, if current growth rates continue, rather than worrying about some migrants with darker skins.

Perhaps Pericles could tell us how the Japanese are getting away with "Fortress Japan", since they have virtually no immigration. I would also be delighted to see Pericles lead the way in repudiating dog-in-the-manger attitudes, by offering to share his house with one or more homeless people.

Pericles and his friends really don't have to worry, though. The politicians will never do anything that might be against the interests of their rich mates. Unfortunately, this also means that they would reject any other ideas, such as 579's suggestions, that don't involve squeezing low and middle income earners until the pips squeak.

Nhoj

I have done some 'research' on the 'Usual Suspects' on here. You will be interested to know all of their posts are made on the same computer. Its a steam powered Commodore 64 (early model). On investigation, I have traced the offending machine to the Shangri-La Nursing Home in Peran Victoria. Tonight at Shangri-La the inmates were in for a special treat 'Tapioca Pudding' was on the menu, they all enjoy their tapioca, as they can eat it and leave their teeth in at the same time.
Its now about 10 o'clock and the 'Usual Suspects' will all be tucked up in bed, sanny pads on, Zimmer frames away, Sister has given them their nightly medication, read them 'Goldilocks and the Three Bears', past 7 o'clock and the likely lads are fast asleep!

Yo, Paul,

"Yo-ho-ho, and a bottle of rum!
Fifteen men on the dead man's chest--"

Yet, some of us are still here.

You and Nhoj may be the 'young Turks', but somehow I think we may still outlast you.

Good luck with your hot cocoa.

Saltpetre,

"I guess there's no hope for some of the welded-on socialist fraternity, they're so deep in their own 'spin' that maybe even a D12 would have trouble digging them out."

That's a laugh....coming from someone who supports a govt whose agenda in no way resembles their pre-election spiel. You really can't see a certain disparity between the bilge they served up before the election and their rogue actions since?

(Boggles the mind)

Spindoc,

"I was a bit sus on Nhoj early on, the signs started to emerge of systemic patronizing abuse and bullying..."

(To Nhoj) "What a mendacious, cheating, obfuscating, abusive, vacuous little weasel you turned out to be."

That's a larf too...(hypocrite)

You might as well admit it, Ludwig, Saltpetre has it in a nutshell...

>>The input has not generated an ongoing increase in productivity<<

And even that is slightly inaccurate. While there clearly is no "ongoing" increase in productivity, there is no increase in productivity at any stage in the process. This is because economic resources - people and money - have been diverted from other productive activities.

The economy as a whole is just a magnification of everyday life. Instead of trying to get your head around the big picture, which you are finding most challenging, try to picture something more manageable.

Think of a small village, with two families, one family farms the land, the other digs up gold. The gold-digger sells his stuff to the big city, and buys his food from the farmer, while the farmer lives quite comfortably off his own produce.

The GDP of the village is, as you point out, "the monetary value of all the finished goods and services produced within a country's borders in a specific time period". In this scenario, let's say the gold fetches $50,000 for the gold-diggers, and they use all of it to pay the farmer's family for their produce. I will leave you to work out what the village GDP might be...

But - disaster! A cyclone destroys the farmer's crops, a tornado funnels out all his livestock, leaving him with nothing. What happens to the GDP of the village? (Take your time. That's the tough one)

Alternatively, an earthquake collapses the gold mine, and it takes a year to clear the debris before production can start. What happens to the GDP of the village?

Or perhaps the village suffers an epidemic of SARS, and fifty percent of both families are incapacitated for a period, say, of a year. What happens to the GDP of the village?

You can make any assumptions you like about alternative markets, availability of nursing facilities and so on. But in no case will you find that GDP increases as a result of these occurrences.

‘morning Poirot,

Are you the same Poirot that also got “sprung” just like Nhoj and also refused to acknowledge your misleading/false claims?

“Why don’t you stop digging, you’ve already reached rock bottom. Just swallow your omission and move on”.
Posted by spindoc, Sunday, 13 April 2014 7:43:18 AM

“In the end it doesn't really matter because Eleventy Joe is going to do his thing anyway”.
Posted by Poirot, Tuesday, 15 April 2014 10:38:20 AM

http://forum.onlineopinion.com.au/thread.asp?discussion=6330&page=0#186361

So it doesn’t matter that you got it wrong? I guess we can rule out personal integrity then?

There is something disturbing about those who live in glass houses and call out hypocrite.

If you wish to associate yourself with Nhoj’s offence against OLO’ers by refusing to acknowledge your errors, then you have earned the right to live with the same criticism.

Happy Mothers Day.

It's good to see that this thread is continuing on under "different" subject matter, like migration and the definition of GDP.

Why is this good?

Because the original subject matter (the coalition's doubling of the deficit) is fully concluded, and a final conclusion on OLO has been reach that the coalition has indeed DOUBLED THE DEFICIT.

I would like to thank "Spin"doc for his support and his conclusion, that he agrees with the "Fact Check" conclusion, that the coalition has DOUBLED THE DEFICIT.

So thanks so much for your support "Spin"doc.

Yes, the coalition has DOUBLED THE DEFICIT in just 7 months

Sorry, Ludwig

Pericles appears to be right about the GDP. Spending on repairs after disasters does raise GDP in the short run, but ultimately will decrease GDP below what it would have been otherwise because of resources that are diverted from increasing production of new things that we want to repairing damage so that we are no worse off. There is a better example, though. Suppose that crime has increased in Pericles' neighbourhood. To protect himself, he installs a burglar alarm system and security gates on his windows. These expenditures count as part of GDP, but they are only defensive spending and don't make Pericles any better off than he would have been without them before the crime spree. This just means that even GDP per capita is an imperfect measure of human welfare.

There's something that we can agree on, Divergence.

>>This just means that even GDP per capita is an imperfect measure of human welfare.<<

Absolutely.

GDP and per-capita GDP are just numbers. They are not intended to measure individual human welfare. A GDP per capita of $100,000, in an economy where the assets are all owned by Ludwig and the rest of us slave 80 hours a week in his factories, for peanuts, provides not one single clue as to "human welfare". Nor is it supposed to.

The role of government is to ensure that there is a modicum of fairness in the laws that govern business and companies, so that the situation where Ludwig owns everything and pays us peanuts does not arise. If it manages this in a reasonable manner, then we can all share in the increased prosperity that rising GDP numbers indicate.

All we can say with any certainty is that on the whole, when the two numbers are rising, we become better off, and when they decline, we become worse off.

And while per-capita GDP continues to rise, we can be reassured that the influx of new people is not undermining our prosperity, or threatening our comfortable existence.

But your example does puzzle me a little, Divergence.

>>Suppose that crime has increased in Pericles' neighbourhood. To protect himself, he installs a burglar alarm system and security gates on his windows. These expenditures count as part of GDP, but they are only defensive spending and don't make Pericles any better off than he would have been without them before the crime spree.<<

It doesn't matter whether I am personally better off, that's not what GDP is about. It's about the economy as a whole.

What has happened is that some of the income from my own business now provides employment for a number of other people, who become better off as a direct result of my purchases.

But don't forget that a) I had to earn that money in the first place, and b) I can't spend it twice.

<< Spending on repairs after disasters does raise GDP in the short run… >>

Yes Divergence, spending on repairs raises (or gets added to or included in) GDP. But it shouldn’t, because it is NOT taking the economy forward, it is taking us from a negative position rendered by the disaster in question back to a neutral position.

<< …but ultimately will decrease GDP below what it would have been otherwise because of resources that are diverted from increasing production of new things that we want to repairing damage so that we are no worse off.

Why do you assume that resources are diverted? Some might be while others would get drawn from stockpiles or from increased production. I don’t think you can assume that increased activity in a recovery program displaces activity elsewhere to the same extent. My feeling is that it would do to some extent, but that the increase in the recovery effort would well and truly outweigh any decrease elsewhere that has resulted from reallocated resources and labour.

We get all the economic activity that is generated by the rebuilding effort after disaster added to GDP. ALL of it. No exceptions. But we get reduced economic activity as a result of the disaster, due to the loss of damage of homes, businesses and crops and/or the loss/injury of economically productive people.

The effect of these losses of economic activity and hence GDP is much less tangible than the clear gains to GDP rendered by the recovery effort.

continued

So I wonder how these losses compare to the recovery activity that is added straight to GDP.

I strongly suspect that in the GDP calculations they don’t appear as big as the recovery effort. And the net effect would be that GDP indicates that a disaster produces a net gain for the economy... and for our quality of life and future wellbeing!!

But of course it shouldn’t be a matter of comparing the economic activity that gets added to GDP due to the recovery effort with the various reductions caused by the disaster, because the recovery effort economic activity should just totally NOT be added to GDP in the first place!!

Anyway, whichever way you look at it, GDP is fundamentally flawed, and needs to be discarded entirely as an economic indicator.

And of course with GDP being so profoundly flawed and misleading, per-capita GDP is also a very highly misleading measure.

Ah, Poirot, dear Poirot,

>You really can't see a certain disparity between the bilge they served up before the election and their rogue actions since?<

Pray tell, what particular 'rogue actions' (actually enacted) might these be?

Or are you merely hypothesizing?

(Surely you're not sucked-in by Nhoj's ranting about this entirely fictitious 7month 'doubling of the deficit'? And, if you were, wouldn't this surely mean extra expenditure incurred on some of your own pet policy interests?)

And, if the so-called 'bilge' (your assessment) served up before the election was really all that bad or indigestible, how come the thrashing the electorate served up to Labor? (And to a lesser extent to the Greens.)

I know, from your usual exhibition of integrity on other matters, that this anti-Lib attitude is not merely 'sour grapes', but must has a deeper origin, and I wonder if you may be willing to share any specific area(s) of dissatisfaction you may have with the 'conservative' political approach.
(Or can it really just come down to a case of stereotypical 'big end of town' vs 'the battler'?) (Or, shades of 'eureka'?)

The only possible conclusion, Ludwig, is that you haven't the faintest idea what you are saying any more.

>>...spending on repairs raises (or gets added to or included in) GDP. But it shouldn’t, because it is NOT taking the economy forward, it is taking us from a negative position rendered by the disaster in question back to a neutral position.<<

There is absolutely nothing in the definition of GDP that requires it to only include activity that, in your quaint phraseology, is "taking the economy forward". In fact, the definition of GDP - as you yourself have acknowledged earlier - is that it is...

"...the monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory."

No mention of including only that which "takes the economy forward". Or backwards, for that matter.

I notice that you only use damaged property in your example. How would you fit bushfires and lung cancer, which were two of your earlier illustrations of "bad" GDP, into this warped theory of yours?

>>We get all the economic activity that is generated by the rebuilding effort after disaster added to GDP. ALL of it. No exceptions. But we get reduced economic activity as a result of the disaster, due to the loss of damage of homes, businesses and crops and/or the loss/injury of economically productive people.<<

Poppycock. Bluster. Desperate efforts to hide the fact that you know you have talked yourself into a corner.

The only thing left is to admit it. But we all know that ain't gonna happen, don't we.

<< There is absolutely nothing in the definition of GDP that requires it to only include activity that, in your quaint phraseology, is "taking the economy forward". >>

You don’t say Pericles!

And therein lies the great flaw in GDP!

It includes ALL economic activity, even that generated by disasters, completely regardless of whether it is taking us forward or producing an improvement for the nation in economic terms... or however you would like to say it.

What are you doing here Pericles?

Where have I stated that the definition of GDP only includes activity that is taking the economy forward… or anything of the sort?

You know that my argument is just the opposite!

You’re being very devious. You are attributing things to me that you know are not part of my arguments.

So….. who’s feeling backed into a corner here?

Go to bed. You obviously need a good night’s sleep!

Saltpetre

You may be happy with a govt that universally misrepresented its intentions prior to the election - there are a growing cohort of people who are not. As I''ve said before I could abide a "Liberal" govt.....but I protest when confronted with an Oz version of the US Tea Party.

It's interesting that you can't see a problem at all with the LNP backward somersaulting on 99 percent of their election commitments......." We will keep the commitments we made - not the ones people thought we made." Excellent ethics in that sentiment from Mr Abbott, I'm sure you'll agree, Saltpetre, since you seem to be enamoured of your elected representatives bald-faced lying to you and your countrymen.

Never mind, you'll find some excuse, such the diddums govt had no idea of such and such, Or so and so.....ad nauseam.....despite the Costello instituted PEFO

So if you believe that I have integrity on other matters, why would you assume that I don't have any regarding my criticism of the Abbott govt? I resent a fraudulent govt of this degree......if they were a product, we'd be able to return them under the trade descriptions act.

Oh, and, yes..... The Abbott govt have just topped $70 billion in 8 months in borrowings - way ahead of the rate Labor were borrowing......( rather a strange way to carry on when we're so hard up.)

When I read this I despair for the country. How much of a pinhead do you have to be to post drivel like this?

The deficit under the coalition has not doubled, the realistic projection of deficit in 4 years has doubled from the pre-election estimate based on Labor's wildly optimistic figures, to the more realistic figures a few months later.

As nearly all the expenditure is based on Labor legislation, and will be so until the next financial year all the the blame for the expenditure rests on Labor's shoulders.

The replacement of the funding for the RBA is not expenditure, but simply fixing the stupid fiddling of the books by Labor.

Still squirming I see, Ludwig.

>>Where have I stated that the definition of GDP only includes activity that is taking the economy forward… or anything of the sort?<<

You have stated that it should. On numerous occasions. Like here, for example:

>>...all the economic activity generated by these bad things, which is just countering or repairing the damage and not at all improving the pre-damage economic situation, gets ADDED to GDP... It absolutely SHOULDN’T be! It should be left out of the GDP calculation, or perhaps be subtracted from the total.<<

So you might like to retract this:

>>You know that my argument is just the opposite! You’re being very devious. You are attributing things to me that you know are not part of my arguments.<<

Which part of your argument is this not part of?

This morning they said on Sunrise that the deficit is at 24 billion. I suppose at the budget speech we'll be told differently again.

Salpetre,

I've been up in the big smoke for Mother's day..but just noticed your spray earlier in the thread.

"This is just such a total beat-up, typical of welded-on socialist hypocrites."

"The first, the Pre-Election Economic and Fiscal Outlook (PEFO), was released in August by Treasury. It was based on a "no policy change" scenario, using assumptions and fiscal rules underpinning medium-term projections adopted by the former Labor government."

"The second, the Mid-Year Economic and Fiscal Outlook (MYEFO) was released in December by the Government. It was based on assumptions adopted by the Coalition, following advice from Treasury."

Note key words:

1. PEFO was delivered by "Treasury"

2. MYEFO was delivered by the "Government".

Here you go. Instead of distorting Chris Bowen's points, here's the actual document.

http://www.chrisbowen.net/media-centre/media-releases.do?newsId=6789

"Labor commissioned the Parliamentary Budget Office (PBO) to independently cost the medium term budget figures had the Coalition not committed to nearly $14 billion in new spending and if Labor’s medium-term fiscal strategy been maintained.

We have understood for some time that the government’s first budget update included a number of cynical decisions that painted a distorted picture about the future state of the budget. But the scale of the dodgy accounting is breath-taking."

"The PBO report shows that:

· Net debt would be a whopping $260 billion less than the $370 billion projected in MYEFO.

· Gross debt would be $270 billion lower by 2023-24 – a huge 40 per cent decline on the $667 billion figure in MYEFO.

· The budget would be in surplus by $34 billion by 2023-24 – a $46 billion swing from the $12 billion deficit in MYEFO."

"This analysis confirms that the government’s secret decision to drop Labor’s fiscal rules dramatically inflated the current debt situation, painting a doomsday picture to build support for its ideological drive to deliver massive cuts in the upcoming budget.

Labor will not stand idly by as the Abbott government sets out to deliberately mislead the Australian community about the true state of the Budget."

Your acidy little narrative is a beat up to cover Hockey's MYEFO crock.

Here's a little something by a welded on LNP supporter - Paul Sheehan.

Lovingly titled "Has Tony Abbott Gone Mad?"

http://www.smh.com.au/comment/has-tony-abbott-gone-mad-20140511-zr9io.html

"A strong case can be made for Abbott’s political insanity, as distinct from any petulant speculation about his clinical sanity, a game which has already worn thin. A strong case can also be made for his political bravery."

"The latitude for hypocrisy contained in this simple moral message was zero. Now, nine months after the 2013 federal election campaign, the Abbott government, based on multiple clues, will introduce a tax increase on fuel, a new tax on every visit to the doctor, higher costs for university, an increase in the income tax for the 650,000 people earning in excess of $150,000 – or perhaps the threshold will be higher (the agony over this broken promise ebbed and flowed and wobbled, right to the end)."

"So there goes the no new taxes. There goes no unpleasant surprises. The other dishonesty from the Coalition was to pretend the increase in budget deficits was caused by profligate spending, not by a combination of stimulus spending and a fall in receipts from the resources boom and a hit to confidence caused by the global financial crisis in 2008-09.

Add to broken promises a big dash of political bravado: increasing the eligibility age for the pension to 70, phased in by 2035, plus increasing the cost of university, and the cost of health care, plus increasing the eligibility threshold for family benefits and disability support payments and the age pension. Plenty of potential for electoral blowback in all that."

Etc...

Looks like the usual cheer squad journos are beginning to shake their heads.

The Coalition was doubtless aware of the true economic situation before the election. Wouldn't it be wonderful if our consumer protection laws on false and misleading advertising could be applied to politicians? "Impeachment with honour." We could have provisions for a citizens' jury to look at cases where politicians believe that they really must break a promise because circumstances have changed. If the citizens' jury accepted that breaking the promise was justified, then the politicians could go ahead and do it without repercussions. The effects on honesty in politics would be magical, and our leaders might start treating us as adults.

Note that I am not just criticizing the Coalition. Labour lied too, and on some very serious matters. In this case, though, Tony Abbott et al. didn't have to lie to win. So why did they do it?

Poirot,

You forgot the final statement of Paul Sheehan's piece:

> Like all prime ministers who introduce an austerity budget he is betting that a majority of the electorate will see that hard decisions on the economy, with its ageing population, need to be made, and made now, and to act otherwise is the greater hypocrisy.<

I have no problem with this, or with most of what Paul Sheehan covered in his piece.
I think he provided a generally fair coverage of the situation, but I disagree that the Coalition has been dishonest in its assessment of the basis of the identified/projected budget blowout.

Some profligate Labor spending (per various spending 'programs' - both funded and unfunded - inherited from the former Labor government), as well as a downturn in revenues have been highlighted as the underlying causes of the blowout, but the extent of the blowout has been largely assigned to unreliable projections employed by Treasury and the PBO.

(Mind you, I have substantial reservations about the Coalition's proposed changes to Paid Parental Leave, even as most recently 'watered-down'.)

And as for shadow Bowen's assessment, what else might one reasonably expect?

And, as for whether Labor's, the Treasury's, the PBO's or the Coalition's projections prove to be the more accurate, we will have to wait and see.
But, when faced with a potential fire it is wise to act, rather than wait around to see if the roof is going to fall in.

24 hours to wonder, many generations to evaluate the 'wisdom'.

Lol!...Yes, Saltpetre, I almost included Sheehan's paragraph in my spiel (except I was over my word limit)

One has to ask, is it "brave" to lie "so fulsomely" to get oneself elected...or is it merely dishonourable and stupid?

These and other questions will be...

Btw, Hockey only sent the pollie pay cut initiative to the Remuneration Tribunal late last Friday....obviously a last minute brain storm to deflect criticism - especially after he and Cormann were filmed smoking celebratory cigars behind a hedge.

"A last-minute request to freeze the pay of federal politicians and senior bureaucrats was only sent to the Remuneration Tribunal late on Friday."

http://www.smh.com.au/federal-politics/political-news/budget-2014-politicians-pay-freeze-a-lastminute-measure-20140511-zr9kz.html#ixzz31UJ2Yegl

They make it up as they go along.

When people are too insipid to comprehend they resort to calling names. Liar is the description now used to deny that the bandwagon has to slow down.

So Pericles, oh squirmy one…. you squirmed right past the key issue in my post of 11 May 2014 8:02:51 PM.

I wrote:

>> Why do you assume that resources are diverted? Some might be while others would get drawn from stockpiles or from increased production. I don’t think you can assume that increased activity in a recovery program displaces activity elsewhere to the same extent. My feeling is that it would do to some extent, but that the increase in the recovery effort would well and truly outweigh any decrease elsewhere that has resulted from reallocated resources and labour. <<

Come on, one of your much-emphasised points is that resources are simply diverted and that therefore economic activity due to recovery efforts after disasters does not lead to an overall increase in GDP.

Well, wotta ya gotta say about that now, eh squirmy?

indiviual,

If someone repeatedly states categorically before the election that there will be "no cuts to education, no cuts to health, no changes to the pension, no cuts to the ABC and SBS" (verbatim Tony Abbott in an interview)

...and then "promptly" - as soon as his goal is achieved, announces cuts to education, cuts to health, changes to pensions and cuts the ABC and SBS...what would you call them?

If someone reassures the electorate "ad nauseam" that there will be no nasty surprises, no new taxes...then "promptly" announces nasty surprises and new taxes, - then what would you call them.

It's the sheer nerve and scale of Abbott's deception that is the talking point here.

So, yes, I will call him a liar...because that's what he is.

Poirot,
Get it into you, there are no cuts, what you call cuts in your panic is nothing more than less waste. Why spend $10.- on some inferior article when you can get better quality for $ 8.- ?

individual,

"Get it into you, there are no cuts..."

Lol!...waste no time, mate...get yourself to federal LNP headquarters pronto.

With rhetoric like that, I'm sure they'd offer you a position!

Watching Q&A right now I simply cannot believe the bias & idiocy displayed by this moron David Maher, Tony Jones & the Labor women. Is my tax dollar paying for these idiots ?

individual,

The only pertinent point is that if the Abbott govt had taken its present policies to the election - it would not have won.

"Watching Q&A right now I simply cannot believe the bias & idiocy displayed by this moron David Maher, Tony Jones & the Labor women. Is my tax dollar paying for these idiots ?"

individual may well ask which "idiots' his taxpayer dollars are paying for...

Perhaps it's these idiots?

(Dated: May 12)

https://au.news.yahoo.com/nsw/a/23452289/mps-board-taxpayer-funded-flight/

"At a time when the Treasurer says everyone will share the burden of a tough budget 7News can reveal some MPs are getting an expensive free ride.

Four Coalition members used a taxpayer-funded jet to fly from Perth to Canberra today, costing more than $140,000.

The RAAF VIP jet flew empty to Perth to carry four Government MPs and eight staff back to Canberra, including Justice Minister Michael Keenan.

The estimated cost to taxpayers is $140,483.

One MP said the price was ‘actually cheaper than flying Qantas’.

A quick search found a Qantas flight for $334 and a Virgin flight for $291.

In taxpayer class? That works out at around $12,000 a head.

One WA member did find a flight at the same time, with Dr Dennis Jenson saying: “I did take a commercial flight, thanks.”"

Nice to know our deceptive hypocritical Govt is sharing "the burden"...

There's no point in trying to pretend you know what you are talking about, Ludwig. You lost all credibility a long time ago.

You wrote:

>>Why do you assume that resources are diverted?<<

It is not an assumption. It is a measurable fact.

>>Some might be while others would get drawn from stockpiles or from increased production. I don’t think you can assume that increased activity in a recovery program displaces activity elsewhere to the same extent.<<

"Drawn from stockpiles", Ludwig?

You don't draw firefighters from a stockpile, Ludwig. You pay some of them, and the rest are volunteers who are diverted from their day job to perform their work on behalf of the community.

You don't draw brickies from stockpiles. They are diverted from other projects in order to rebuild after the cyclone, or the fire has razed the town.

You don't draw nurses from stockpiles. They are trained over a number of years, and when there is an epidemic, they just have more patients. Who, by the way, cannot be counted among the country's productive resources while they are under the nurses' care.

>>My feeling is that it would do to some extent, but that the increase in the recovery effort would well and truly outweigh any decrease elsewhere that has resulted from reallocated resources and labour.<<

Your feelings aren't part of the calculation, Ludwig. You are simply blustering on, hoping to have the last word, even though the words are actually empty of any factual relevance whatsoever.

>>Come on, one of your much-emphasised points is that resources are simply diverted and that therefore economic activity due to recovery efforts after disasters does not lead to an overall increase in GDP.<<

I know that to be the case, because the facts tell me so. Much more reliable than your "feelings".

Nice to know our deceptive hypocritical Govt is sharing "the burden"...
Poirot,
I cannot recall ever supporting such waste & I have on numerous occasions stated my disgust at that. Because Coalition members are nearly as bad as ALP members does not automatically excuse any of it. The point I'm constantly making is a point that you et al constantly miss is the fact that the ALP stuffed up totally whereas the Coalition is stuffing up not quite as bad & under the Coalition we have a chance to recover. Recovery under an ALP government is simply not possible.
Why not ask the federal opposition now if they'd support a salary level reduced to 2007 ? As a matter of fact I'll ask it right now right here. So, if any pollies read this please post your views on this right here. As the Liberal member on Q&A stated last night Australia's minimum wage is too high to compete. It needs to come down as need to ALL other salaries. This moron Maher was like a randy ferret when he waffled on oncessantly about the minimum wage. He clearly has absolutely no idea about economics. Whoever made the decision to employ him & even pay him needs to be castrated.

<< There's no point in trying to pretend you know what you are talking about, Ludwig. You lost all credibility a long time ago. >>

Hahahaaa!

So then Pericles, oh squirmy one, why do you bother with me then? Why do you spend so much time responding to me??

Hahaha, your actions completely contradict your assertion! ( :>)

<< You don't draw firefighters from a stockpile, Ludwig. >> << You don't draw brickies from stockpiles. >> << You don't draw nurses from stockpiles. >>

So…. what about material resources? You’ve conveniently failed to mention those. Could it be because you do realise that some of them could indeed be drawn from stockpiles or be made available by an increased rate of manufacture?

And as for the human resources; where there is a big urgent job to be done, new employees are found as well as those diverted from other jobs. It is NOT a one-for-one trade-off.

You realise full well that I am right on the money with this point – that work done in response to disasters and the material and human resources used therein, is certainly NOT entirely diverted from other jobs, and therefore is NOT neutral in terms of economic productivity or contribution to GDP.

Hey, if there is even a slightly improved economic turnover as a result of disasters, that is: even a slight amount of material and/or human resource that is additional to that diverted from elsewhere, then there will a net economic gain registered in the GDP calculation, yes? And in any large-scale urgent job, there is definitely going more activity than just that diverted from elsewhere. There is always going to be additional employees and additional material resources.

Sorry Squirmicles, you’re busted on this particular point!

"...The point I'm constantly making is a point that you et al constantly miss is the fact that the ALP stuffed up totally whereas the Coalition is stuffing up not quite as bad & under the Coalition we have a chance to recover. Recovery under an ALP government is simply not possible."

And the point you consistently ignore, individual, is that we did have a GFC, and that's why we went into debt. If we'd had an austerity govt, we'd probably have had a sizable debt in any case....except we wouldn't have had a robust economy with an AAA credit rating, low unemployment etc.

Other developed countries went with austerity...many of them are on this graph showing a debt to GDP ratio of between 50 and 100%....ours is under 15%

http://www.abc.net.au/news/linkableblob/3727694/data/possum-graph-8-government-debt-as-gdp-data.jpg

I mean look at it...that's our debt to GDP ratio. It's very low compared to other OECD countries. Australia's economy was kept ticking along. You do understand that - don't you?

If that's "stuffing up totally" then I'm living in Bizarro world!

Just a little something else you might be interested in:

http://www.smh.com.au/comment/budget-pain-not-for-millionaires-who-pay-no-tax-20140512-zr9o3.html

"The latest tax statistics show 75 ultra-high earning Australians paid no tax at all in 2011-12. Zero. Zip."

Poirot,

Considering that Rudd and Juliar (now accused of knowingly taking bribes) used the jet almost continuously incl one trip for Labor party fund raising, (over which your silence was deafening), the Labor party does not have a leg to stand on this.

Secondly, considering that Bowen has already been caught out lying before the election, presenting figures done "independently" by treasury, when they were based on farcical assumptions by Labor. This is no better.

PEFO and MYEFO are both based on treasury projections which are heavy influenced by assumptions from the government of the day. (Garbage in = garbage out similar to a computer.) The proof of the pudding is that every single Labor budget or MYEFO has been wildly out with vastly increased spending.

Either Treasury under Labor suddenly became incompetent, or Labor lied to them as they lied to everyone else.

Only in the strange, convoluted logic of your own mind, Ludwig.

>>Sorry Squirmicles, you’re busted on this particular point!<<

The fact that you haven't been able to disprove any single point that I have made, and instead rely totally on your "feelings", demonstrates perfectly the quicksand upon which you base your arguments.

>>So then Pericles, oh squirmy one, why do you bother with me then? Why do you spend so much time responding to me??<<

When you post arrant nonsense on economic matters of which you understand diddly-squat, in the guise of situational analysis, then I force myself to respond, just in case there are any gullible folk out there who allow themselves to be misled by your ramblings.

Here's what we are discussing:

>>GDP... is a most terribly flawed economic indicator, which adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc.<<

We have already been able to discard this one. In your own words:

>>Fires, cyclones, illnesses, car accidents, droughts, obesity, and a thousand other bad things, have a negative effect on productivity. Of course as a result of these, GDP would be lower than it would otherwise be<<

Recognizing the inconsistency, you have now chosen to fight your battles in the area of trivia - such as whether "material" might be used up in the reconstruction after a cyclone.

You cannot seem to get it into your head that these events are destructive of GDP. By their very nature, they reduce our capacity, and lower our collective output. Every single example I have presented to you illustrates this point precisely, yet you still wander off into a world of "if" this and "maybe" that.

If this is too difficult for you to understand, then simply accept it and move on.

But please be aware that if you continue to promote this ridiculous concept as being an economic truism, I shall continue to illustrate how wrong you are.

..ours is under 15%
Poirot,
If the ALP government did such a fantastic job to pull us through the GFC why then why is ALL the future fund gone as well ?
I tell you why, because no ALP run Government will ever be able to manage, full stop. Just think where we'd be now if the future fund hadn't been there ?
THe uselss ALP government didn't get us through the GFC, the money in the future fund did & now we're paying dearly for it whilst that useless pile of crap is living it up with his millionaire missus. True labor value people I suppose.

indi There is close on 100 billion in the futures fund.

Tony Abbott and Joe Hockey duet:

"To dream ... the impossible dream ...
To fight ... the unbeatable foe ...
To bear ... with unbearable sorrow ...
To run ... where the brave dare not go ...
To right ... the unrightable wrong ...
To love ... pure and chaste from afar ...
To try ... when your arms are too weary ...
To reach ... the unreachable star ...
This is my quest, to follow that star ...
No matter how hopeless, no matter how far ...
To fight for the right, without question or pause ...
To be willing to march into Hell, for a Heavenly cause ...
And I know if I'll only be true, to this glorious quest,
That my heart will lie peaceful and calm,
when I'm laid to my rest ...
And the world will be better for this:
That one man, scorned and covered with scars,
Still strove, with his last ounce of courage,
To reach ... the unreachable star ..."
(lyrics by Joe Darion and music by Mitch Leigh)
(vocals:Abbott/Hockey)

Are the 'windmills' real or illusion? We shall see in due course.

(The Moving Finger writes; and, having writ,
Moves on: nor all your Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all your Tears wash out a Word of it

-- Omar Khayyam)

individual,

"THe uselss ALP government didn't get us through the GFC, the money in the future fund did...."

I realise that in addressing the above comment, I may as well talk to my cat...but nevertheless.

Here's what a Nobel laureate in economics has to say on this subject:

"While other countries fell into the global recession, Australia maintained strong economic growth, low government debt and a triple-A credit rating. With this record, you might expect the federal election to be focused on how to convert the strength of today's economy into resilience for the future. But instead the political spotlight has fallen on the perceived problem of government debt, with alarming proposals to bring austerity ''down under''.

For an American, Australia's anxiety about deficit and debt is a little amusing. Australia's budget deficit is less than half that of the US and its net debt is less than an eighth of the country's gross domestic product.

Most countries would envy Australia's economy. During the global recession, Kevin Rudd's government implemented one of the strongest Keynesian stimulus packages in the world. That package was delivered early, with cash grants that could be spent quickly followed by longer-term investments that buoyed confidence and activity over time. In many other countries, stimulus was too small and arrived too late, after jobs and confidence were already lost."

http://www.smh.com.au/comment/australia-you-dont-know-how-good-youve-got-it-20130901-2sytb.html#ixzz31Zf2dcO1

(My cat get's it...don't know about poor old individual)

Here's a bit more sleight of hand from the Govt on the the pollie pay freeze:
http://www.news.com.au/finance/economy/remuneration-tribunal-decided-in-april-against-wage-increases-for-mps-and-top-public-servants/story-fn84fgcm-1226914847040

"IT was sold as a last-minute decision by the Government to freeze wages of its Federal MPs to ensure they were hit by their own chunk of Budget pain. But that wasn’t quite right.

As it turns out, the body which sets those wages had already decided pay rates would be untouched."

Such honest and trustworthy charlatans in our govt.

a Nobel laureate in economics
Poirot,
before you let yourself get sucked in too far can you please check if this expert is making his own revenue or if he, as I suspect, is a public servant ?

Pericles, you have just squirmed straight past the issue…. as you do, very frequently.

You’ve completely failed to address the nuts n bolts of my last post.

So I’ll put it to you again:

>> …work done in response to disasters and the material and human resources used therein, is certainly NOT entirely diverted from other jobs, and therefore is NOT neutral in terms of economic productivity or contribution to GDP. <<

>> …if there is even a slightly improved economic turnover as a result of disasters, that is: even a slight amount of material and/or human resource that is additional to that diverted from elsewhere, then there will be a net economic gain registered in the GDP calculation, yes? And in any large-scale urgent job, there is definitely going more activity than just that diverted from elsewhere. There are always going to be additional employees and additional material resources. <<

You can’t counter this can you.

You can’t assert that work done as part of the recovery effort after fires, floods, cyclones, earthquakes, etc is 100% diverted from elsewhere. You can’t assert that some of the work and hence contribution to GDP isn't over and above that which gets diverted from other sources.

You can’t assert that there isn’t a net gain to GDP as a result of economic activity following disasters, compared to the economic activity that would have occurred involving to the resources that get diverted into it, because there are always going to be additional resources (material and human) involved in a recovery effort.

Yes of course a disaster results in less economic return (contribution to GDP) than what would have happened in the absence of that disaster. But the amount of economic activity spurred by that disaster is always going to be greater than that generated by the economic activity that is diverted from other jobs into the recovery effort.

I hope you can get your head around that Pericles.

continued

You wrote:

<< You cannot seem to get it into your head that these events are destructive of GDP >>

You keep saying this, and I keep agreeing. When have I not agreed with this?

The underlying issue here is that economic growth generated by the recovery effort gets added to GDP when it absolutely shouldn’t, because it is simply taking us from a degraded position back to a neutral position. It is not taking us forward economically. But GDP indicates that it IS doing precisely this, as all contributions to it are treated equally - as though they are good positive economic growth that is good for the country, and is improving our economy and standard of living.

Surely this is not too difficult for you to understand Pericles?

I’m a huge Andy Williams fan.

To dream the impossible dream: http://www.youtube.com/watch?v=SbDDE1Y0FZY

Well... Tony and Joe are making some badly needed refinements to our budgetary status.

That's got to be a good thing, although I would certainly not be in favour of some of the things they are slashing.

But by far their biggest fault is their complete lack of any mention or even a passing thought for the role that immigration plays in this issue.

Abbott said tonight words to the effect: we are spending big on infrastructure, and don't we ever need it.

Well, it would be nice if he told us why we need it. That is: what generates the demand for ever-more infrastructure, and why we haven't kept up with it, despite us always having put a massive effort into building this infrastructure.

Yes... it is very much connected to our massive immigration rate.

Massive numbers of new residents requires massive infrastructure spending.

We are paying through the nose to set up massive numbers of new residents!

In this time of budgetary problems, if not crisis, we absolutely need to slash the immigration rate.

That single move would be as big as everything else put together in terms of cuts and new taxes.

Ahhhh poor old Ludwig, he ALWAYS manages to blame his dreaded *MIGRANTS*, regardless of the subject matter.

His fear and hatred of migration is a result of ideological brainwashing that he's accepted without question. Dogma gone crazy.

Thankfully, he's a part of a very tiny minority of uneducated Australians who are filled with such fear and hate. Ludwig is not a racist, and his reasons for his anti migrant stance are not race/culture .... *BUT* .... Ludwig still stands with these racists as a brother in arms against migration. Their reasons are different, but their hatred and fear is the same.

That explains everything, Ludwig.

>>I’m a huge Andy Williams fan.<<

'Nuff said.

(Incidentally, for the record, simply repeating the same rubbish over and over is never going to improve its credibility)

I'm a huge Andy Williams fan
I'm a huge Andy Williams fan
I'm a huge Andy Williams fan
I'm a huge Andy Williams fan
I'm a huge Andy Williams fan
I'm a huge Andy Williams fan

Hey Pericles, you're correct.

Haaaaa hahahaaaa!

Pericles, you’re the funniest bugger on OLO.

Apparently in mentioning Andy Williams, I gave you the perfect opportunity to side-step our debate and opt out of the discussion!!

That is weeeird!!

But funny!

Haaahahahaaa!

Well… if that’s what works for you, then so be it.

But from my position, it amounts a complete cop-out.

I put to you a very discrete point in my last post, which you would have addressed if you could have. You simply can’t, because you know I am right on that particular point.

And the same applies for the whole subject. You’re off the rails with it.

Oh well… til next time… toodles.

PS. I’m sure you’re chuffed to have Nhojjie supporting you! Haaa ahahahaa ( :>)

Reinventing history again, I see Ludwig.

>>I put to you a very discrete point in my last post, which you would have addressed if you could have. You simply can’t, because you know I am right on that particular point. And the same applies for the whole subject. You’re off the rails with it.<<

You, I suppose, get a free pass when it comes to addressing any of the points that I make. Typical.

Get back to me on the factual basis of the following.

Ludwig says:

>>GDP... is a most terribly flawed economic indicator, which adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc.<<

Then Ludwig says:

>>Fires, cyclones, illnesses, car accidents, droughts, obesity, and a thousand other bad things, have a negative effect on productivity. Of course as a result of these, GDP would be lower than it would otherwise be<<

Explain to me how both of these statements of yours can be simultaneously true, and perhaps I will indulge you with a little more education as to what actually happens to GDP in, and after, a disaster.

In the meantime, be aware that it is a little premature to crow, when you have clearly lost every argument, and are forced to resort to Ludwig's Law.

Which states that he who has the last word in a discussion must, by definition, be correct, despite the complete vacuity of the point he is making.

Pericles, you still ‘ere?

I thought you signed off with your last post!

Apparently when you said << Nuff said >>, you didn’t mean nuff said at all. Typical!

Alright let’s make a deal….

I will fully address the points you put to me in your last post if you fully address the points I put to you in my post of Tuesday, 13 May 2014 7:38:25 PM.

Deal?

Hey, I’ll throw in a sweetener – I’ll address your post first, even though my unaddressed post pre-dates it.

Whadda ya say?

I think you missed the point, Ludwig.

>>Apparently when you said << Nuff said >>, you didn’t mean nuff said at all. Typical!<<

That was an Andy-Williams-related comment. Nothing to do with serious discussions at all. Except as a pointer to possible cerebral limitations.

>>I will fully address the points you put to me in your last post if you fully address the points I put to you in my post of Tuesday, 13 May 2014 7:38:25 PM.<<

Eh? You mean this nonsense?

>>You can’t assert that work done as part of the recovery effort after fires, floods, cyclones, earthquakes, etc is 100% diverted from elsewhere. You can’t assert that some of the work and hence contribution to GDP isn't over and above that which gets diverted from other sources.<<

These are precisely the same issues that I settled, once and for all, on Wednesday, 7 May 2014 at 10:30:23 AM, seven and a half days before.

>>Fires, cyclones, illnesses are not "good" for the country, as they divert resources - and therefore money - from other, more productive roles. But that is no reason to exclude them from the calculation, since the money is employed within our economy, buying groceries for the firefighters, allowing the nurses to pay their rent, builders' labourers to buy clothes etc. etc. But above all, these factors you cite do not, repeat not, increase economic turnover. It is clear as day (to most people) that if we spent all our time tending the sick, fighting fires and rebuilding after an earthquake or cyclone, very quickly we would have a GDP of zero. So, by definition, the time, energy, resources and money expended on these activities cannot possibly, in any universe, cause "increased economic turnover". I am frankly astounded that this simple concept still hasn't made it through into your consciousness, Ludwig.<<

Until you accept the pure, simple, crystal-clear logic of this, there is no point whatsoever in responding to your menu of tenuous bluff and bluster.

I am actually surprised that you believe a single word that you say here. If indeed you do.

<< That was an Andy-Williams-related comment. Nothing to do with serious discussions at all. Except as a pointer to possible cerebral limitations. >>

Ohww! Really! Nothing to do with serious discussions eh?

As if to say that I have some mental problem because I’m an Andy Williams fan?!?

Pericles, you took a very cheap opportunity to launch another insult. Every bit as cheap, unintelligent and mentally corrupt as that Nhoj character.

You ought to be ashamed of that.

NO you haven’t addressed my query. Your quote above, which pre-dates the statement of mine that you have repeatedly avoided addressing, does NOT address my statement.

My point economic activity is not entirely diverted – there are always going to be extra material resources, human resources and economic activity on top of that diverted from elsewhere, and therefore recovery-effort activity does add to GDP. You said that it is entirely diverted, and Divergence agreed.

You haven’t addressed this point. You have again sidestepped an issue that you know you can’t counter.

I was looking forward to addressing your post of Wednesday, 14 May 2014 3:26:49 PM. But I won’t until you address this point…. or admit that I am right.

Come on, simply admit that yes there is or at least could be some material and human resources that are not just diverted from other jobs, and that recovery-effort economic activity is or at least could be greater than the sum of diversions into it or economic activity foregone elsewhere as a result of this activity.

Just admit that, so that we can move on….please.

Really, I do look forward to addressing your mooted contradiction in my statements. But fair’s fair! You do mine and I’ll do yours.

If you insist, Ludwig. Anything for a quiet life.

>>My point economic activity is not entirely diverted – there are always going to be extra material resources, human resources and economic activity on top of that diverted from elsewhere, and therefore recovery-effort activity does add to GDP. You said that it is entirely diverted, and Divergence agreed.<<

There are indeed circumstances where this is entirely possible, although not guaranteed.

For example, if business simultaneously becomes more efficient, and can produce more without the resources that have been diverted, than yes, growth will occur. Similarly, if government decides to invest some of our taxes into those "extra material resources", then it is likely to increase economic activity. Much as the pink batts, and the investment in new school buildings, were part of the government's response to the dangers of the GFC to our economy. Without the injection of a heap of borrowed money, we might have entered a recession that would benefit no-one. Borrowing more money therefore allowed our economy to continue moving forward.

The actual medium-to-long-term impact of this process is keeping economists busy with a whole lot theories. But most seem to agree that as a mechanism to boost GDP, it is at best a blunt weapon, and at worst, a store of future dangers.

http://noahpinionblog.blogspot.com.au/2012/03/how-can-debt-affect-potential-gdp.html

If you are interested in the technicalities, this is a good starting point.

http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1237.pdf

In all of this, one aspect stands out. Without some form of stimulus, GDP does not grow. Businesses do this by investing their profits to create more output, thereby increasing GDP. Governments invest our taxes to achieve similar results. But in neither case is growth guaranteed.

So your post-disaster scenario remains entirely speculative, for exactly the same reasons. And, incidentally, is only one of the scenarios that you proposed will "add to GDP". It is difficult to see, for example, how a SARS epidemic that filled our hospitals for six months would respond to the same opportunity for overall GDP growth.

And yes, the Andy Williams thing was a cheap shot. But you shouldn't lead with your chin...

<< There are indeed circumstances where this is entirely possible, although not guaranteed. >>

Wahoo!!

Thankyou so much for that, Pericles.

<< And yes, the Andy Williams thing was a cheap shot. >>

Thankyou again.

Wow, I’m so happy now. I’m going to have a really great afternoon…. despite the wet weather here in Cairns, which is no good for my new profession of beachbumology!

More later.

Oh, and thankyou again… again! ( :>)

Alright Pericles, you reckon that these two statements of mine are contradictory:

>> GDP... is a most terribly flawed economic indicator, which adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc. <<

and

>> Fires, cyclones, illnesses, car accidents, droughts, obesity, and a thousand other bad things, have a negative effect on productivity. Of course as a result of these, GDP would be lower than it would otherwise be <<

Hmmmm….

Yep…

They are totally contradictory.

You win this argument.

I’m outta here.

Bye.

Ahhhh… you WISH!!

No they are not at all contradictory.

We have thoroughly been over this, so I’m only repeating myself here:

The economic activity that results from the recovery effort from fires, floods, cyclones, etc and from car accidents and smoking, alcohol and obesity-related illnesses etc does indeed get included in the GDP total. It all makes GDP bigger than it would otherwise be. And it certainly isn’t just activity that gets diverted from elsewhere, which you have finally conceded to be the case.

But of course none of this activity should be added to GDP, as it is all taking us from a negative position back to a neutral position. It is not advancing our economy. It is just getting us back on track. Or in the case of car accidents and illnesses, just ongoingly trying to counteract or reduce the magnitude of the negative economic impacts of those things.

So to my second statement:

Of course disasters, accidents and illnesses lower our economic productivity. GDP would be lower than it would otherwise be. But if GDP didn’t include economic activity undertaken as part of recovery efforts or ongoing combatant efforts against illnesses, it would be lower still… and would more accurately reflect the negative impacts of these things.

A lot of activity that registers positively with GDP is a direct result of negative impacts on our economy. This is just bonkers! ALL that sort of economic activity should be seen as neutral….as being outside of the parameters of the GDP calculation!

Yes it would be hard to sort out just what should or should not be included in this calculation. But I’m sure we could do it if we tried. We could certainly implement a much better economic indicator than what we’ve currently got. It wouldn’t be perfect, but it would still be about a thousand times better than the GDP indicator as currently defined.

So I hope now Pericles that you can see that there is no contradiction between these two statements.

You still don't get it, do you Ludwig.

>>The economic activity that results from the recovery effort from fires, floods, cyclones, etc and from car accidents and smoking, alcohol and obesity-related illnesses etc does indeed get included in the GDP total.<<

Yes, it does.

>>It all makes GDP bigger than it would otherwise be.<<

Not necessarily. It depends whether additional money is injected into the economy in order to combat the problem. If it isn't, then the economy does not increase in size, and is therefore not "bigger than it would otherwise be". In fact, it would become smaller, as unproductive activity within the economy increased in relation to the productive part.

>>But of course none of this activity should be added to GDP<<

It isn't added. It is included.

>>Yes it would be hard to sort out just what should or should not be included in this calculation. But I’m sure we could do it if we tried.<<

But it would not make sense to anyone except you.

pre-ridicules..<<..smoking, alcohol and obesity-related illnesses etc does indeed get included in the GDP total.<<

Yes, it does.>>

no it dont..its economic activity..does.
i home brew..i home grow..i home heal..there is no economic benifit/from me..

>>It all makes GDP bigger than it would otherwise be.<<
[no im not spening a cent/if i was to double my smoking..it dont showup/in extra sales..fertiliser/water..are minute..but if i use chook poo/rain water..nix nadda

<<Not necessarily..[bigger..gdp..'..It depends whether additional money is injected into the economy in order to combat the problem.>>

how come suddenly its a problem[no extra money was expendid[thus there is no problem/govt spendinf a bigger precentage/of nuthin.

<<If it isn't,..then the economy..does not increase in size,>>

sure/but what about barter?

no increase..<<..and is therefore not "bigger..than it would otherwise be".>>

that grates/on me..ok i got my crop/if disaster breaks..instead of free/i need raise the money or the value/in barter[its new eco activity]

more not less..<<....In fact,..it would become smaller,
as unproductive activity>>
[that seems the root of the error..
the disaster..isnt non productive..in fact not only me bying my booze/smokes..but insurance/buying roofs buildig etc[not imediate/but progressive/with a peak/then a low[and if thats not done..no eco activity/though some will rebuild by barter]

the real question/is\..has eco activity increased..
or are the volenteers suckking otherwise paid work?

<<..within the economy increased..in relation to the productive part.>>

>>But of course none of this activity should be added to GDP<<

It isn't added. It is included.>>

freaking same same
im including the tax burdens on you..but every penny you 'spend'..is added to gdp/but as expenmditure is linked to it..its govts aid/to beat any/of it up..

but only..so they can spend more

see how it should go/is money suply links to asset
as assets increase[via deflation]..the money supply..to govt
is increased../by way of\..'other consuming taxes...'anyhow govt should revenue raise by money moving..wether its moved for ever..or a micro second/a transaction/tax..on all transactions/double for corpertions/inc's/ltd's..and trust's tax minimisation..or money-export.

Nope. Wrong.

>>It isn't added. It is included.>>
freaking same same<<

That is the persistent error in Ludwig's logic.

There are ten people in a room.

If John walks in to join the people in the room, he is added to the total, making eleven in all.

If John is included in the people in the room, there are still only ten.

Most people learn this simple concept when they are in their first year at school. But perhaps that was so long ago for you and Ludwig that you have forgotten.

Is there another aspect to this misunderstanding, Ludwig?

"Of course disasters, accidents and illnesses lower our economic productivity. GDP would be lower than it would otherwise be."

You do understand the difference don't you, and that economic productivity is not economic product?

As near as I can figure it you do not want GDP to be what it is defined as, but to be something it is not defined as.

Wouldn't it be easier to argue for a Net Domestic Product? Though "it would be hard to sort out just what should or should not be included in this calculation."

On which side of the accounts would the time and costs of posting comments online appear, for example?

O ‘ullo Pericles. Trust you ‘ad a great weekend.

<< Yes, it does. >>

Well thankyou for agreeing with me!

<< Not necessarily. >>

No. Absolutely necessarily! ALL economic activity that is generated by disasters, accidents and illnesses gets added to (included in) GDP. Check the definition of GDP again. It doesn’t exclude this sort of economic activity.

So I take it that in saying; ‘not necessarily’, you can indeed see my point that economic activity that results directly from disasters, accidents and illness does indeed sometimes at least contribute to GDP and make GDP bigger than it would otherwise be.

<< It isn't added. It is included. >>

Added… included… it is absolutely the same thing! If it is added to the GDP total, that total would be bigger than if it was not added. It if is included in the GDP total, that total would be bigger than the total would otherwise be, by exactly the same amount as if it was added to it!!

<< If John walks in to join the people in the room, he is added to the total, making eleven in all. If John is included in the people in the room, there are still only ten. >>

If John walks into a room with nine people, there are then ten.

If John is included in the people that are then in the room, there are then ten.

Added to…. Included in… Same difference!!

Most people learn this simple concept when they are in their first year at school. But perhaps that was too long ago for Pericles!! ( :>/

Not at all, Ludwig.

>>Added to…. Included in… Same difference!!<<

Here are the dictionary definitions.

add (verb)
1. join (something) to something else so as to increase the size, number, or amount. e.g. "a new wing was added to the building"
2. put together (two or more numbers or amounts) to calculate their total value. e.g. "they added all the figures up"

include (verb)
1. comprise or contain as part of a whole. e.g. "the price includes dinner, bed, and breakfast"
2. make part of a whole or set. e.g. "we have included some hints for beginners in this section"

>>If it is added to the GDP total, that total would be bigger than if it was not added.<<

True, but that way of describing it is still confusing you. The total is only bigger after it is added. That is, if 1 is added to 99, the total is 100, which is bigger than 99.

This is where you go trip yourself up:

>>It if is included in the GDP total, that total would be bigger than the total would otherwise be, by exactly the same amount as if it was added to it!!<<

Of course it would. But that is not what we are talking about, is it, because you have had to subtract it, before adding it back in.

If 1 is included in 100, then the total stays the same.

Sometimes my patience amazes me.

It is a bit sad that we have to spend so much time on elementary arithmetic. But it is the only way you will ever understand why "increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol" can only be the result of external stimulus - e.g. increased government funding, or increased efficiency elsewhere in the economy - and does not happen of its own accord.

No-one goes "whoopee, there's a bush fire, our GDP will increase", which is what you were proposing when we started this discussion on "add" vs. "include".

<< You do understand the difference don't you, and that economic productivity is not economic product? >>

Yes WM Trevor. Although it depends on just what you call ‘productivity’ and ‘product’.

Of course all economic activity does not product a tangible material product. But a lot of it does produce good outcomes in the form of services of all sorts.

And we’ve got to consider the demand for productivity, product, goods and services. So if we are producing lots of product and non-product productivity (goods and services respectively), but the demand is constantly increasing and this production is just going along with the demand, then we aren’t really achieving anything…. Which is exactly what is happening with respect to our super high immigration / population growth rate.

So using a Net Domestic Product indicator instead of GDP would still have the fundamental problem of showing high product, without it being compared to the rate of demand or the per-capita product or the real improvements (or lack thereof) for our economy, quality of life and future prosperity (sustainability).

An NDP indicator would suggest that the achievement of high economic product output would be very good for our economy, end of story... which would be just as misleading and outrightly false as the GDP indicator currently is.

The trick is to work out how exclude (treat as neutral) all the product and productivity that is simply catering for the ever-increasing demand (and which happens in response to disasters, accidents and illness), which is simply providing the same level of services and infrastructure for ever-more people without producing anything truly positive for our society.

<< On which side of the accounts would the time and costs of posting comments online appear, for example? >>

This would be outside of any economic / GDP / NDP calculations, wouldn’t it? I can’t see how it would contribute to or detract from these.

I wrote:

>> If it is added to the GDP total, that total would be bigger than if it was not added. <<

Pericles, you replied:

<< True… >>

Thankyou for agreeing with me.

This is all that really matters here.

<< If 1 is included in 100, then the total stays the same. >>

And if 1 is included in the total that was 100 before it was included, the total would be 101.

Hey, you can look at ‘included’ as either not adding to a total as you do, or adding to a total as I do. Both are legitimate interpretations. My interpretation is just the same as adding something to the total. Including in… Adding… Same thing.

The important point is that you know what I mean: that economic activity included in a total makes that total bigger by the amount of that inclusion than it would otherwise be without that inclusion. Obvious and simple. And undeniable as it concerns contributions to GDP.

<< No-one goes "whoopee, there's a bush fire, our GDP will increase" >>

Of course they don’t.

So then, why does the economic activity that results from it get directly added to the GDP total? Or included in that total, which would be smaller if it was not included?

Quite apart from any diversion of material goods or labour from other jobs, quite apart from the fact that disasters surely do have an overall negative impact on our economy and quite apart from the obvious fact that economic activity spurred by a disastrous fire event is simply taking us from a bad situation back to a neutral situation, it all contributes to GDP!! !! !!

This is simply insane! Anyone who has the slightest clue about economics… or about logical thought processes… can surely see that we shouldn’t be adding stuff which is obviously not positive to a total that totally indicates that it is entirely positive!! ( :>|

Ah, but I am just repeating myself.

ludwig/quote..<<..This is all..that really matters..here.>>
i agree/this has been..entertaining]so-far.

<< If 1..is included..in 100,
then the total..stays the same...>>

yes..1..is included..to make 100...in singular unit progression to the total/..whole..of 100]..but in doing so..has lost its singular/entity

<<And if..1..is included in the total
that was 100..before it was included,..the total would be 101.>>

inclusion..of one/\excludes all else..[including 101][when..100=inclusion..of all]

you can look at..‘included’>>
as being the past/done..concluded..as it 'was'..included

<<..as either..not adding to a total..as you do,>>

me either..was means is must be..100
as 100 is all it was past included]..

<<..or adding..to..a [new?]..total as I do...Both are legitimate interpretations.../My interpretation is just the same..as adding something..to the total.>>

and thus modifying what 'was'
into the more usefukll of what now is

<<..Including in… Adding… Same thing.>>
i hope i have added my support/not that that changes anything?

<<The important point..is that you know what I mean>>

mean=means=average..:..that economic activity..*includ*ed*>>
past tense,,}..<<..in a total>>..sum certain]..<<..makes that total bigger*..by the amount of that inclusion..>>

absolutly/irrefutably/this moment modiefies what was previously concluded\to be included..conclusivly..consecutivly un addintionalised..<<>.than it would otherwise be..without that inclusion...>>

yes/thats clear/before i added mu 'inclusion/conclusion..collusion..<<..Obvious and simple...>>

And undeniable..in/as far\it concerns..contributions to GDP...so far as productive blogging is concerned..

<< No-one goes "whoopee,..there's a bush..
lockem-up/citizen arrest\em..

sorry/busche..<<..fire,..our GDP will increase" >>
but if it was set..into a hypothetical 'target'..of 100
the accident has drawn that predictive 100/back to 99..but thats lost forever

any input..is extra gdp..extra cost over return
i need plant again..[that reminds me we bailout plantations revaged by cyclone/but in the old days we chopped off most of the leaf/we bailout fools/their a dead loss..gdp=98?..plus one=what we got..clever accounting

money gets created..lol..you will love this
simply by us saying we allready recieved 'it'..its tthen put on the books as a debt/yet nothing was lent pre signing reciept..you allready 'got'..it...include includes a definitive condition/any change to that condition/alters the end fruits.

So as far as you are concerned Ludwig, words mean anything you choose them to mean.

>>My interpretation is just the same as adding something to the total.<<

Despite my providing you with two, clear and separate definitions of "add" and "include", you still maintain that they mean the same thing.

There seems little point in continuing this conversation in English.

Can you speak German?

But perhaps this will help.

>>Anyone who has the slightest clue about economics… or about logical thought processes… can surely see that we shouldn’t be adding stuff which is obviously not positive to a total that totally indicates that it is entirely positive!!<<

So where do you count expenditure on hospitals? There is a vast army of people out there tending the sick, which is clearly one of your "not positive" activities, given that the patients are non-productive for the duration of their illness.

Because, you know, they are certainly included in the calculation of GDP.

It is only a short logical step from there to show that bushfires, cyclones, earthquakes etc. have precisely the same impact. They do not add anything to our GDP. And the most likely outcome is that they reduce it.

Your problem, as has been pointed out before, is that you are unhappy that GDP counts everything. You want it to count only "good stuff", without being at all certain where the line may be drawn.

>>...all the economic activity generated by these bad things... gets ADDED to GDP... It absolutely SHOULDN’T be! It should be left out of the GDP calculation, or perhaps be subtracted from the total.<<

Well tough. That's not going to happen. At the risk of repeating myself, this is deeply "flawed" economic thinking:

>>[GDP] is a most terribly flawed economic indicator, which adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc.<<

Perhaps the best thing for you to do Ludwig is to learn a little about economics.

<< So as far as you are concerned Ludwig, words mean anything you choose them to mean. >>

That’s a silly thing to say Pericles. You have carefully explained what you mean and I have carefully explained what I mean.

You’ve got to admit that my interpretation and definition is every bit as good and as valid as yours.

More later.

Jeez, I must have the patience of a saint.

>>You’ve got to admit that my interpretation and definition is every bit as good and as valid as yours.<<

Let's run through that again, shall we.

Mine are not interpretations. They are definitions.

And they are not my definitions. They are dictionary definitions.

Here are those dictionary definitions once again.

add (verb)
1. join (something) to something else so as to increase the size, number, or amount. e.g. "a new wing was added to the building"
2. put together (two or more numbers or amounts) to calculate their total value. e.g. "they added all the figures up"

include (verb)
1. comprise or contain as part of a whole. e.g. "the price includes dinner, bed, and breakfast"
2. make part of a whole or set. e.g. "we have included some hints for beginners in this section"

And here is Ludwig-speak.

>>Hey, you can look at ‘included’ as either not adding to a total as you do, or adding to a total as I do. Both are legitimate interpretations. My interpretation is just the same as adding something to the total. Including in… Adding… Same thing.<<

Once again, with feeling:

So as far as you are concerned Ludwig, words mean anything you choose them to mean.

>>More later.<<

Can't wait.

I'm eagerly anticipating a Ludwig-ized version of that old Bill Clinton classic, "It depends on what the meaning of the word 'is' is"

For goodness Pericles. More words do not right you make!

I said:

<< More later >>

You should have held off and given me a chance to properly reply to your previous post. Heaven knows I could write a whole book about it!!

Crikey, I’m the professional beachbum, having taken a redundancy some time back. While you’re apparently the professional businessman, in charge of several employees. And yet you seem to have much more time to indulge in OLO than I do!!

Alright, please consider this:

GDP has been telling us in no uncertain terms that our economy’s been hootin along in recent years, yes?

Afterall, we’ve had a hooter of a mining boom, and we’re still right in it, just back a bit from the peak. And we’ve had hootinly high growth due to horribly high immigration for decades, except for a bit of a low patch under Keating if I recall correctly.

And yet…… we’ve got major issues with the Federal budget, with infrastructure, with services like health and education, major environmental issues, major discontent with politicians, term after term whether they be Lib or Lab… and in short: we are pretty obviously not gaining a higher quality of life or a more secure future as a result of all this growth.

GDP, being the horribly flawed measure that it is, has been MISLEADING US TERRIBLY!!

continued

Now, if GDP had been formulated so that it didn’t include all the economic growth generated by immigration that just duplicates all the basic requirements for that extra population, and it didn’t include stuff that happens as a direct result of economically negative disasters, accidents and illness, then it would have come somewhere much closer to giving us a realistic indication of what is really happening here.

<< So where do you count expenditure on hospitals? There is a vast army of people out there tending the sick, which is clearly one of your "not positive" activities, given that the patients are non-productive for the duration of their illness. >>

YES there is a 'vast army'! And all this sort of economic activity should be NEUTRAL to GDP!

<< Your problem, as has been pointed out before, is that you are unhappy that GDP counts everything. You want it to count only "good stuff", without being at all certain where the line may be drawn. >>

<< Well tough. >>

Hahahaa. That’s bizarre!!

Of COURSE I want the indicator that’s supposed to indicate only good stuff to only include good stuff.

And what do you want? For it to continue to be an incredibly basically fundamental dismally gravely flawed FALSE indicator…. which you KNOW includes a WHOLE lot of stuff that should be considered neutral or negative, and calls it all positive!!

The proof is in the pudding, Pericles.

The pudding is the high GDP growth that we’ve had for many years. But there is decided lack of pudding when it comes to the types of real improvements across our society that that high GDP has directly and unequivocally told us that we should have been having for all of those years, due to a hootinly good rate of economic growth!

<< At the risk of repeating myself, this is deeply "flawed" economic thinking >>

Please, just sit back for a moment…. and ponder just how deeply flawed your thinking is on this issue. Perhaps you need to learn a little about REAL economics!

Yeah, right.

>>Please, just sit back for a moment…. and ponder just how deeply flawed your thinking is on this issue. Perhaps you need to learn a little about REAL economics!<<

And this advice comes courtesy of...

>>...the professional beachbum<<

Go... catch a wave.

Or whatever it is you beachbums do.

Just don't, whatever you do, start your own business.

Pericles, don’t tell me you’re giving up?!?

What about my ‘proof in the pudding’ comments?

Irrefutable aren’t they.

All we need to do is to look at the nature of GDP, which has been growing like the clappers for many years, and compare it to our real-world economic situation and….. it all becomes glaringly obvious that there is something extremely wrong with the way GDP is formulated!

So, to uphold GDP as being of a sound economic basis is just terribly poor, for anyone who has a realistic understanding of economics.

Look at the rate of GDP growth in the last three years: http://www.tradingeconomics.com/australia/gdp-growth

Average growth of 0.81% per quarter since the start of 2011.

It has averaged 0.88% per annum from 1959 to 2013.

This is an absolutely staggering growth rate when you think about it. In fact GDP has increased by some 250% just since 2004!! http://www.tradingeconomics.com/australia/gdp

So…. with this sort of indication from GDP, how is it possible that we have a Federal budget ‘crisis’, or a humungous need for infrastructure expenditure or declining benefits for pensioners and other welfare recipients or the prospect of increasing prices for just about everything or a forthcoming increase in GST, or all sorts of other things, all of which clearly indicates that things are not going too well for us economically?

I mean; GDP is at the most stark odds with the very things that it is supposed to be indicating are in good nick!! !!

And the biggest reason for this is our absurdly high rate of immigration – or more specifically; all the economic growth that is needed to simply give this massive number of new immigrants each year all the basic infrastructure and services that the established population has, all of which makes a HUGE contribution to GDP… but which is at best neutral... and absolutely should NOT be part of the GDP calculation!

Your what, Ludwig?

>>What about my ‘proof in the pudding’ comments?<<

Your numbers:

>>Average growth of 0.81% per quarter since the start of 2011. It has averaged 0.88% per annum from 1959 to 2013. This is an absolutely staggering growth rate...GDP has increased by some 250% just since 2004!!<<

And at the same time, per capita GDP rose from US$13,267 in 1962 to $37,228 in 2013 - that's a growth rate of 2% per annum.

So we are, every one of us, substantially better off than we were in [pick a year].

But that's not the point, is it. What you are asking is:

>>So…. with this sort of indication from GDP, how is it possible that we have a Federal budget ‘crisis’, or a humungous need for infrastructure expenditure or declining benefits for pensioners and other welfare recipients or the prospect of increasing prices for just about everything or a forthcoming increase in GST, or all sorts of other things, all of which clearly indicates that things are not going too well for us economically?<<

We can discount the last bit - "things are not going too well for us economically" - because as you have shown us, we have done fantastically well.

However there has to be a point at which you say, hey, we have done a great job and increased everybody's wealth over the last fifty years, but we need to start thinking about the next fifty.

Mind you, I believe the "crisis" is only a crisis in the eye of Hockey, who needs to make the previous government look as bad as he possibly can.

That is not to say we don't need to find a way forward that doesn't rely so heavily on digging stuff out of the ground and flogging it, we certainly do. Infrastructure needs some attention, for sure. Benefits need to "decline" - that's the rationale for mandated super - or we will have not enough taxpayers left to provide them.

But that's just detail.

Go to the beach. When you get back, tell me again how terrible it all is.

Once again Pericles I could write a book in response to your post.

And this time I will (well… half a book at least)…

<< And at the same time, per capita GDP rose from US$13,267 in 1962 to $37,228 in 2013 - that's a growth rate of 2% per annum. So we are, every one of us, substantially better off than we were in [pick a year]. >>

Firstly, it is nice to note that you haven’t questioned the enormous growth rate of GDP – 250% since 2004 and an average of 0.88% pa since 1959. And a huge increase in growth rate to 0.81% per quarter from the start of 2011.

I haven’t checked the figures, but I presume that this much greater growth rate started well before 2011 and is pretty well correlated to big increases in immigration…. much more so than to the mining boom.

So, do you really think that we are substantially better off to the extent indicated by GDP? Are we 2½ times better off than were in 2004?

Obviously we aren’t. So obviously there is something critically wrong with GDP…. or more specifically; with the indication of economic wellbeing, prosperity and improvement that GDP is supposed to be giving us.

Alright, I have established that GDP is enormously errant as an economic indicator. Well… obviously if GDP is fundamentally flawed, then per-capita GDP is also fundamentally flawed!

continued

And obviously NOT “everyone of us” is better off! Clearly there are a whole lot of people that are no better off at all. In fact, we are probably not any better off on average! And if we are, it’s skewed strongly towards the rich end of the spectrum.

So Pericles, how can you espouse per-capita GDP as translating into us all being better off?

Once again, this per-capita GDP measure is based on a very large part of GDP; that part resulting from economic activity related to immigration; which simply should NOT be added to (included in) GDP!

A realistic measure of GDP would be MUCH lower than it is. And then of course a realistic measure of per-capita GDP would be much lower, if not negative.

When it comes to people being or not being better off, you also need to consider all sorts of things outside of the GDP calculation, especially the rising prices of most basic necessities. Even if per-capita real GDP, as it should be measured, was increasing, it might still not translate into real average gains, if expenses are also increasing at the same or a greater rate. And we know that the prices of many basic goods and services have indeed gone well up in recent years.

Then there are other less tangible things that work against perceived improvements in peoples’ live, like congestion and travelling times, environmental quality, crime rate, access to health services, etc.

So again; it is a very woolly assertion indeed that you make; that the increasing per-capita GDP that we have had for many years has meant that we are all better off.

continued

You quoted me in your last post:

>> So….with this sort of indication from GDP, how is it possible that we have a Federal budget ‘crisis’, or a humungous need for infrastructure expenditure or declining benefits for pensioners and other welfare recipients or the prospect of increasing prices for just about everything or a forthcoming increase in GST, or all sorts of other things, all of which clearly indicates that things are not going too well for us economically? <<

But you didn’t answer my question! You’ve skipped around the issue. And what a huge issue to avoid addressing!

What about the massive need for infrastructure? Or the other things I mention. How does this fit with your assertion that every one of us is substantially better off?

<< However there has to be a point at which you say, hey, we have done a great job and increased everybody's wealth over the last fifty years, but we need to start thinking about the next fifty. >>

Interesting. So what are you really saying here? That it is not looking as good for the future as it has in the past?

Well… how does that fit with GDP? I mean; GDP is ripping ahead at the moment, and giving NO indication of any need for change in the near future!

<< Infrastructure needs some attention, for sure >>

Wonderful. I’m so pleased you can appreciate that. So then… why do we need more or better infrastructure? Why hasn’t our massive rate of economic growth led us to be right up there with infrastructure? This is one thing that we would surely be right on top of…. if the GDP indicator was worth a pinch of the proverbial! You know that a massive amount of tax-payers’ money has always been put into infrastructure (and services).

continued

So there is only one possible answer; yes you know it perfectly well: massive immigration / population growth. That is: massive continuous demand for more infrastructure, despite the absolutely enormous amount of the stuff that is constantly being built, and has been built at a great rate for many years!

This constantly increasing demand not only works against the good part of economic growth – by demanding expenditure that should be put into things that improve the lives of the pre-existing population, but alarmingly, it all gets counted as positive stuff in our crazy GDP indicator!!

This is tantamount to madness. It really is brazen economic criminality!!

<< Benefits need to "decline" - that's the rationale for mandated super - or we will have not enough taxpayers left to provide them. >>

No, benefits don’t need to decline at all. They could do with a bit of re-evaluation so there is a better correlation between who gets benefits and who needs them. Then they should increase for those who really need them.

And the big factor concerning there not being enough taxpayers’ money to pay for all the stuff we need… and hence putting pressure on the government to reduce benefits, is… yes… our absurdly high immigration rate.

Ah, but let’s not get carried away with detail.

<< Go to the beach. When you get back, tell me again how terrible it all is. >>

No, no beach yesterday. But I did go for a nice hard run up Castle Hill in Townsville, amidst many lycra-clad nubile young women! And no… there wasn’t anything at all terrible about that!! ( :>)

Actually, yes, Ludwig.

>>So, do you really think that we are substantially better off to the extent indicated by GDP? Are we 2½ times better off than were in 2004?<<

The country as a whole has increased its product by that much. The numbers tell you so.

Have each of us experienced that level of increase in our prosperity? Of course not. But on a per capita basis, we are all better off, as once again the numbers clearly show.

The incontrovertible reality of that national growth is that it was created by people. People digging stuff out of the ground. People organizing to sell it to places where it is needed. If we had experienced a shortage of people to do this, who would have made it happen? You seem to think that we can be prosperous as a country independently of the number of people employed. As if prosperity is somehow our right, granted automatically.

>>So obviously there is something critically wrong with GDP…. or more specifically; with the indication of economic wellbeing, prosperity and improvement that GDP is supposed to be giving us.<<

Only in your imagination.

GDP gives us a measure of how well off we are in comparison to other parts of the world. GDP per capita gives us a view of how we each, individually, are benefitting from that prosperity. They are both numbers that are easily calculated, and difficult to fudge.

>>Alright, I have established that GDP is enormously errant as an economic indicator. Well… obviously if GDP is fundamentally flawed, then per-capita GDP is also fundamentally flawed!<<

You haven't. So it isn't.

So with that out of the way, the rest of your standard anti-immigration rant gets washed away. You are simply wasting your breath, if you think that we can continue to increase our prosperity relative to the rest of the world, and our individual prosperity within that growth, by shutting our doors and creating fortress Australia.

Ah, Pericles, methinks there is a thorn in your Gordian Knot.

>if you think that we can continue to increase our prosperity relative to the rest of the world, and our individual prosperity within that growth, by shutting our doors and creating fortress Australia.<

This statement appears to assert/suggest that all growth is inseparably bound to population growth, but underlying such a proposition is an assumption that the Earth's finite resources (and capacity to absorb environmental abuse) would by some magic be able to sustain ever-increasing populations the world over.
Not feasible - at least in my humble view.

The flaw in the proposition is that it fails to take account of the potentials of individual (per capita) 'productivity' increase.
The world is shrinking, populations must also shrink and per capita productivity increase to sustain and to grow individual affluence.

Oz is not yet 'full', but in my view the best option for increasing prosperity is to increase productivity - and that means to work smarter, and to get all hands pulling in the same direction.
The less distractions, the smoother the transition to the 'smarter' Oz.

Distractions: Housing and caring for an ever-increasing 'dependent' population, unrealistic wages and conditions, trashing of R&D provisions, inordinate barriers to innovation, scarcity of job opportunity, excessive focus on infrastructure at the expense of investment in long-term industrial/occupational development, too many wanting too much too soon, and lack of overall political vision.

To be 'can do', we'll all have to put our backs into it, and stop procrastinating and fabricating excuses.
A brave new world awaits.

A brave bid for mixed metaphor of the year, Saltpetre.

>>Ah, Pericles, methinks there is a thorn in your Gordian Knot<<

But you would be wrong to suppose the following:

>>This statement appears to assert/suggest that all growth is inseparably bound to population growth<<

Not at all. What was it that I wrote that gave you that idea?

>>...underlying such a proposition is an assumption that the Earth's finite resources... would by some magic be able to sustain ever-increasing populations the world over.<<

But we both know that isn't possible, don't we? There are indeed limits to growth. It is just that Australia has not reached that point just yet. As witnessed by the fact that our per capita GDP continues to grow, as the economy as a whole continues to grow.

>>Oz is not yet 'full', but in my view the best option for increasing prosperity is to increase productivity - and that means to work smarter, and to get all hands pulling in the same direction.<<

It doesn't have to be the only option, though. Growing the overall economy, which will enable it to better withstand cyclic variations, is also a good path.

O Pericles, you’re running right off the rails!

Your post is full of things that are just wrong wrong WRONG!

Where do I start…..

<< The country as a whole has increased its product by that much. The numbers tell you so. >>

My goodness! That is just staggering! You really are looking only at the numbers… and not at all at the real world, aren’t you.

I’ve brought to your attention just how utterly flawed the GDP numbers are, and yet you can continue to assert that because the numbers ‘tell’ you something, then that something must be true!

Well, you’ve just very succinctly shown how bad GDP really is. Not only is it utterly flawed, but there are people like you, and no doubt many who would call themselves economists, some in high-falutin and very influential positions, who look at the numbers, only the numbers and nothing but the numbers… and make very important decisions that affect Australia’s economic future based on those utterly flawed numbers!!

<< Have each of us experienced that level of increase in our prosperity? Of course not. >>

Right. And have each of us experienced the level of increase in prosperity indicated by per-capita GDP? Of course not.

<< But on a per capita basis, we are all better off, as once again the numbers clearly show >>

Oh puleeease!

Sheesh, I went to considerable lengths in my last quadruple post to explain why our ever-increasing per-capita GDP does NOT indicate that we are all better off. You have just slipped past all of that, without comment… and continued to make absurd assertions!

continued

I wrote:

>>Alright, I have established that GDP is enormously errant as an economic indicator. Well… obviously if GDP is fundamentally flawed, then per-capita GDP is also fundamentally flawed!<<

You quipped:

<< You haven't. So it isn't. >>

Mwa haa haaaa!! Thanks for the detailed response ( :>). Surely if you truly believe that is it isn’t, then you could have put a bit of substance into your reply. The fact you haven’t strongly suggests that you really do see that GPD and hence per-capita GDP are indeed fundamentally flawed. But of course you would be loath to concede anything in this regard.

<< …your standard anti-immigration rant… >>

<< …by shutting our doors and creating fortress Australia. >>

You’re scraping the bottom of the bucket there Pericles. We’ve been head-bangin on this forum for a few years now. You totally know my views on immigration. You know that I am not anti-immigration and that there nothing ‘fortress Australia’ about my desires. Shame shame shame on you for stooping to this very low level, of asserting things about my views which you know are not true. I’ve told you this a few times over the years, but you keep occasionally falling back to this very low quality of correspondence.

I call it as I see it, Ludwig. Sorry if that doesn't meet with your approval.

>>My goodness! That is just staggering! You really are looking only at the numbers… and not at all at the real world, aren’t you.<<

I am looking at the numbers because that is what GDP consists of. Numbers. The source of those numbers is clearly defined. If you don't like what they tell you, or disagree that they have any validity in your world, that is, regrettably, your problem.

>>I’ve brought to your attention just how utterly flawed the GDP numbers are, and yet you can continue to assert that because the numbers ‘tell’ you something, then that something must be true!<<

You have stated that in your opinion, GDP numbers are "utterly flawed". Unfortunately, they cannot answer back, because a) they are just numbers and b) the activities that they track are clearly defined. So it is not the numbers that are flawed, just what you choose to read into them.

>>I went to considerable lengths in my last quadruple post to explain why our ever-increasing per-capita GDP does NOT indicate that we are all better off.<<

You certainly went to considerable lengths, Ludwig, but you didn't actually say anything meaningful. Most people would consider an increase in their share of GDP to be a good thing, in exactly the same way that they would consider a decrease to be a bad thing. But if you don't share that view, that is a personal issue, not an economic one.

"You haven't. So it isn't." was a straightforward response to your claim that "I have established that GDP is enormously errant as an economic indicator. Well… obviously if GDP is fundamentally flawed, then per-capita GDP is also fundamentally flawed!"

Somehow you seem to believe that just because you assert something, it must be true and correct. Sadly, this is rarely the case.

>>You totally know my views on immigration. You know that I am not anti-immigration<<

As I said before, I call it as I see it.

<< I call it as I see it, Ludwig. >>

Not always Pericles. Some of your comments such as:

<< shutting our doors and creating fortress Australia >>

…are surely not genuine expressions of how you see my views. You know me better than that. They seem to be cheap insults and false assertions that know full well are false.

Hey, we do have good debates. We’ve had a lot of them on OLO. I really appreciate that. And despite the tetchiness and cheap insults from time to time, it has been and remains really good… and I thank you for it.

But it would be better without those sorts of false assertions.

<< If you don't like what they [the numbers] tell you, or disagree that they have any validity in your world, that is, regrettably, your problem. >>

Um…. no…. it is certainly not just my problem. It is a major problem for our society. To have such a terribly flawed prime economic indicator, which our decision-makers seem to take as gospel, is of enormous importance to the future of our nation, to the ability for us to match resource demand and supply capability, to get ahead in terms of genuine quality of life factors and to achieve a sustainable society.

The ramifications of the flawed nature of GDP are absolutely enormous.

continued

<< …it is not the numbers that are flawed, just what you choose to read into them. >>

It is the concept of GDP that is fundamentally flawed. That makes the GDP numbers fundamentally flawed.

<< You certainly went to considerable lengths, Ludwig, but you didn't actually say anything meaningful. >>

Wow. Well it is all there in black and white for anyone else to read who may be following this sordid discussion to make their own judgement on that.

<< Most people would consider an increase in their share of GDP to be a good thing, in exactly the same way that they would consider a decrease to be a bad thing. >>

Really?

I think you might find that there are a whole lot of people out there who no longer believe that continuous rapid growth is the answer to all our ills, or that the prime indicator; GDP, is worth a brass razoo.

When you consider the amount of disillusionment out there and add to it the amount of apathy in the general community, I think you will find stark little real support for GDP.

I think most people who have given this subject a bit of thought, and who are independent of the enormous bias of the big-business profit motive and the political pandering to it, will side more with me than you.

Well, Pericles,

We are led to believe that "shutting our doors and creating fortress Australia" would not only be substantially detrimental to our economic prospects, but would actually court economic disaster, or even physical invasion, and, in any event would not be at all possible.
We either go with the flow, or we risk being ostracized as a pariah.

But is it fear which fires this outlook, or blind obedience to the prevailing global economic paradigm, or, of all things, a genuine vision of the superlative of national interest?

We are bound, and beholden, to global trade, and thus 'fortress' cannot apply, but why should 'shutting the door' be ruled as diametrically opposed to Oz' economic and/or developmental interests?
(Excepting of course for business travel, tourism, education, diplomacy and the like, and some selective residential immigration directly in the national economic interest.)

I accept we have a moral obligation to participate in international efforts to resolve the current world refugee crisis, but I question suggestions that such participation must, of necessity, include absorption of a 'quota' of displaced persons as fundamentally 'key' to Oz' future economic prospects.

As regards:

< Most people would consider an increase in their share of GDP to be a good thing,<

The problem I see with this broad-brush assignment is that GDP is not in fact shared equally, with a large portion inevitably going to the top few percent of the population, a significant portion going to infrastructure development - which many may not view as a significant personal gain - and another significant portion going to multinational interests.
In the end result, the portion of GDP growth applying directly to the personal interests of the bulk of the population may not necessarily be very significant at all.
(Larger population must also equate to a proportionately broader sprinkling of the 'crumbs'.)

No problem, Ludwig.

>>I think most people who have given this subject a bit of thought, and who are independent of the enormous bias of the big-business profit motive and the political pandering to it, will side more with me than you.<<

I'm genuinely unconcerned what you think other people might think. Even less concerned whether they might share your opinion. Having a chicken-little view of our economic position while ignoring reality is not a mindset that I would wish on anyone. But if it is how they choose to live, then that's fine by me.

What is at issue here is that you have a particular view as to what GDP is made of, what it stands for and what it is used for. Clearly I have been unable to help you by pointing to the facts.

You have a choice. Either give up a couple of hours beachbumming every day in order to learn about economics, after which you might be able to support your views with facts instead of emotion; or you can continue to believe that Australia is going to hell in a handbasket, with that opinion supported by your misapplication of a set of numbers that you clearly misunderstand.

But if beachbumming is your preference, that's all good too.

Have a great day.

Ahh Pericles, by all indications I have a much better understanding of economics than you seem to have. May be it is because whenever I am thinking about economics I am viewing it holistically, in the big picture, considering not only the numbers, but what they really mean and how well they translate into all the things that our economy is supposed to translate into – all the quality-of-life things, both now and well into the future.

Please consider this from Tradingeconomics.com:

< Australia's economy is dominated by the service sector (65 percent of total GDP). Yet its economic success is based on abundance of agricultural and mineral resources. The most important and the fastest growing sector of the economy is industry with mining accounting for 13.5 percent of GDP, manufacturing for 11 percent and construction for 9.5 percent. Agriculture accounts for the remaining 2 percent of the GDP. >

http://www.tradingeconomics.com/australia/gdp-growth-annual

Now consider the definition of GDP:

The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

http://www.investopedia.com/terms/g/gdp.asp

continued

Well…this should immediately ring alarm bells with any economist!

GDP includes all services. But services are not really productive. And yet they make up 65% of GDP!

The productive sectors are mining, agriculture and manufacturing.

We know that service-provision is very rapidly increasing, in about a one to one ratio with population growth. And we know that those services are basically just duplication of what we already have in order to cater for that population increase.

So, anyone who thinks about this for more than a few seconds must surely realise that GDP is utterly compromised.

I would suggest that most ‘economists’ and politicians know this perfectly well, and are happy to go along with the enormous misrepresentation of economic growth and success inherent in it.

Afterall, the prime motive here appears to be to appease the big end of town and placate the masses while doing it. If leading the masses to believe in false indicators and economic prospects is the way to do this, then so be it.

Now.. is that cynical view? Or is it a realistic one?

I think both, with the latter prevailing!

Query:

From the tradingeconomics definition of GDP:

< The monetary value of all the FINISHED goods and services… >

Pray tell: what is a finished service??

Most services by their very nature are ongoing.

And what is a finished good? If a new freeway takes three years to build, is all the economic activity that goes into it in the first two years not counted in GDP until the third year?

Perhaps you can enlighten me here Pericles.

Hey the sun is shining. I’ve really got to go find a nice beach…. preferably one with a few young bikini babes on it. Chow!

Thanks for the chuckle, Ludwig.

>>Ahh Pericles, by all indications I have a much better understanding of economics than you seem to have.<<

You have about the same level of understanding of economics as I have of surfing. Which is to say, I have seen other people do it, but haven't the first clue how to ride a wave. Or whatever it is that they do.

>>...whenever I am thinking about economics I am viewing it holistically, in the big picture<<

Yep. I do the same with surfing. I view it holistically. From a distance. With a beer in my hand.

>>GDP includes all services. But services are not really productive. And yet they make up 65% of GDP!<<

Ouch! Services are "not really productive", are they not? That's the equivalent of my saying that catching a wave is not really surfing.

Oh look. The world average for services as a component of GDP is 63.2%

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

The economies who - according to Ludwig's law of services - are less productive than Australia, include France, UK, Belgium, Japan, USA, Neteherlands, Italy Sweden, Canada and Germany.

What does that tell you?

>>The productive sectors are mining, agriculture and manufacturing.<<

Tell that to the Germans. Over 70% of their GDP is generated through services. Are they in dangerous territory, do you think?

>>Pray tell: what is a finished service?? Most services by their very nature are ongoing.<<

Ok, a valid question, although it might help if you first understood what a service is.

"Services correspond to ISIC divisions 50-99 and they include value added in wholesale and retail trade (including hotels and restaurants), transport, and government, financial, professional, and personal services such as education, health care, and real estate services."

http://data.worldbank.org/indicator/NV.SRV.TETC.ZS

So the value of a finished service is the amount that is invoiced, e.g. when you leave the restaurant, the bill that you pay counts as a finished service.

See, you are already on the road to enlightenment!

Oh, about that freeway.

>>And what is a finished good? If a new freeway takes three years to build, is all the economic activity that goes into it in the first two years not counted in GDP until the third year?<<

A very good question indeed.

Since freeways are infrastructure, and therefore not visibly "consumed", they have a special place in GDP calculation.

"Government (G) - This category includes government spending on... capital goods, such as highways, missiles, and dams."

http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/gross-domestic-product.asp

The simple answer is once again to look at the invoices. How much was spent on concrete, how much on hiring the machinery etc. etc. So the answer to your question is that the economic activity is calculated each year, on the basis of what is actually spent on the project.

If you would like to investigate this component a little more deeply, I suggest you look it up under "Gross Fixed Capital Formation". Wikipedia is a good starting point,

http://en.wikipedia.org/wiki/Gross_fixed_capital_formation

...and will eventually lead you to the World Bank.

http://data.worldbank.org/indicator/NE.GDI.TOTL.ZS

This shows that 28% of our GDP has its roots in GFCF, which places us in mid-table on the world stage. This is because China (49%) is investing massively in infrastructure, which will benefit its economy in years to come, while most developed economies (USA: 19%, UK: 15%, Germany: 17%) have their infrastructure investment spread over many previous centuries. For example, you can still travel along roads in the UK that were built by the Romans, 2000. years ago.

It is excellent that you are showing an interest, Ludwig. Keep those questions a-coming.

I was wondering what the Romans ever did for us...

But, as you know Pericles, it was the Greeks who realised Phronesis is a double-edged sword, ... not only seeking insight into the implications of actions and events but also the ability to understand how complex and messy situations interact.

Absolutely, WmTrevor.

>>But, as you know Pericles, it was the Greeks who realised Phronesis is a double-edged sword<<

In fact, I believe it was Aristotle himself who said "that's all very well, Plato, but nobody loves a smartypants".

Pericles wrote:

<< Most people would consider an increase in their share of GDP to be a good thing >>

Saltpetre, you replied:

<< The problem I see with this broad-brush assignment is that GDP is not in fact shared equally, with a large portion inevitably going to the top few percent of the population, a significant portion going to infrastructure development - which many may not view as a significant personal gain - and another significant portion going to multinational interests. In the end result, the portion of GDP growth applying directly to the personal interests of the bulk of the population may not necessarily be very significant at all. >>

Right on!

Most of us don’t get anything like out ‘fair share’ of GDP... and per-capita GDP is thus a most terrible indicator.

Indeed a large portion does go into infrastructure, most of which is just catering for new residents and is not benefitting the existing population at all.

And as for services, which make up an enormous 65% of GDP, a large part of it is again just duplication for ever-more people, without creating improvements for the pre-existing citizenry.

I am amazed at the enormous contradiction in Pericles’ statements: between his assertion that he knows all about economics, and his assertion that:

<< …on a per capita basis, we are all better off, as once again the numbers clearly show. >>

Now then, Ludwig. This is not the time to start verballing.

>>I am amazed at the enormous contradiction in Pericles’ statements: between his assertion that he knows all about economics...<<

I have never made any such claim.

I just happen to know more than you, that's all.

Not difficult, it has to be said. Like the man said to his pal as they were being chased by a tiger, "It's no good, we can't outrun him". To which his friend replied "I don't have to run faster than the tiger. I only bneed to run faster than you"

It's statements like this that give you away:

>>And as for services, which make up an enormous 65% of GDP, a large part of it is again just duplication for ever-more people, without creating improvements for the pre-existing citizenry.<<

Such a massive misapprehension of the workings of an economy is truly breathtaking. Except of course, to me. I'm used to it by now.

<< You have about the same level of understanding of economics as I have of surfing. >>

Well Pericles, you seem to know that surfing requires the catching of a wave. So I reckon you know a good deal about it. More than about economics actually!! { :>/

I mean, if you don’t understand the very basics, then it doesn’t really matter what else you understand… or think you understand!

<< I do the same with surfing. I view it holistically. From a distance. With a beer in my hand. >>

Haaaa hahaaa.

You seem to do the same thing with economics when it comes to viewing it holistically – from a distance, with a beer in your hand… tipping over and spilling everywhere as you nod off!! ( :>)

<< Ouch! Services are "not really productive", are they not? That's the equivalent of my saying that catching a wave is not really surfing. >>

Erm… no it isn’t.

Again from tradingeconomics.com:

< Australia's economy is dominated by the service sector (65 percent of total GDP). Yet its economic success is based on abundance of agricultural and mineral resources. >

http://www.tradingeconomics.com/australia/gdp-growth-annual

The enormous contribution to GDP from services is not productive in terms of the success of our economy. It is largely neutral! And therefore it should largely NOT be included in GDP!!

<< The economies who - according to Ludwig's law of services - are less productive than Australia, include France, UK, Belgium, Japan, USA, Neteherlands, Italy Sweden, Canada and Germany. What does that tell you? >>

Nothing! Because it doesn’t say anything about the other sectors of GDP. Or about population growth and hence the size of the increase in the demand for more services, infrastructure and everything else. And hence it doesn’t say anything about the amount of economic activity involved with duplicating services and the amount that actually goes into improving services in these countries.

<< Oh, about that freeway. >>

Wow thanks Pericles. That is a good answer to my question. I appreciate the links.

However, I’ve got to say that you obviously spent a bit of time researching it and finding out just what the answer is… which indicates that you didn’t know beforehand. Well… we’ve both learnt something, so all is good!

<< So the answer to your question is that the economic activity is calculated each year, on the basis of what is actually spent on the project. >>

Yes, as I presumed…. which means that the word ‘finished’ in the GDP definition is meaningless!!

This raises another interesting point – the invoices have to be closely examined in order to work out what gets included in that particular year’s GDP total and what doesn’t.

Well… that’s a bit complicated, and I would think that some of the stuff straddles two financial years or is otherwise finely poised as to whether it gets included that year or the next, or perhaps not at all.

So, if we were to devise GDP definition which only includes the stuff that should be included, and not all the stuff that just duplicates services and infrastructure in direct response to the humungous immigration influx, or occurs in response to disasters, accidents and illness, then the same sort of thing would apply – a close examination of invoices, as well as an examination who benefits from the work being done. Some of it would be difficult to determine, but not significantly harder than at present.

I say this in response to your earlier comments regarding the impracticality of working out just what should or shouldn’t be included if we were to redefine GDP as I would like it to be.

Bottom line – it wouldn’t be significantly harder to work out than for the current system. But it would certainly be a WHOLE lot more meaningful and accurate as an economic indicator.

.

Run….. RUN…. That tiger’s gunna catch you. Coz I can run faster than you!!

Not really, Ludwig.

>>Run….. RUN…. That tiger’s gunna catch you. Coz I can run faster than you!!<<

You just talk more, that's all.

For sure Pericles. I’m a real blabbermouth.

But, you don’t do too badly yourself! ( :>)

Ludwig, me ol' mate, I think Pericles must surely be female,
and with the patience of a saint.
Could be wrong of course, about the gender at least.
And you are most definitely a real bulldog,
or at least a bloodhound, determinedly pursuing the 'scent' of your quarry.

Anyhow, it's been an interesting thread.

(And I think our current population is just fine.)

Interesting perspective Salty.

But I really don’t see why you would allot more patience to Perky than to Luddy!

From my perspective, tis Lud who is the extraordinarily patient one!

But yes, Lud is certainly a bulldog who is not going to let bullsh** go unanswered! Grrrrr! } :> |

<< (And I think our current population is just fine.) >>

Agreed!

We are now at the level that the CSIRO submission and the majority of other submissions to the 1994 Carrying Capacity Inquiry wanted us to achieve as a stable population.

Trouble is of course; we are still growing manically.

So…. do you also have no problem with the size of our immigration program and the open-ended continuously-rapidly-growing-with-no-end-in-sight nature of our population?

I wrote:

>> …as for services, which make up an enormous 65% of GDP, a large part of it is again just duplication for ever-more people, without creating improvements for the pre-existing citizenry. <<

Pericles, you replied:

<< Such a massive misapprehension of the workings of an economy is truly breathtaking. Except of course, to me. I'm used to it by now. >>

Wow! Would you be so kind as to explain where the ‘massive misapprehension’ is here?

Surely you can appreciate that a large population increase requires a large duplication of all the basics – housing, roads, supermarkets, doctors… just to give them what the established population already has.

So all of this, which amounts to a very large amount of economic activity is really NEUTRAL…. and should not be added to GDP which indicates that it is ALL totally positive and advancing our economy!

So….. where’s the misapprehension?

No, Ludwig, I'm not too keen on our current immigration program, but I can see some benefit in taking-in a small quota of suitable genuine refugees.

Perhaps 20,000 per year, for maybe the next 10 years, but subject to annual review of our intake capacity - per budget constraints.
Of course the world refugee situation is really rife right now, and the selection of who, and from where, is exceedingly complex.

My inclination would be for suitable representatives of our immigration department to consult with current local refugee groups, like the Sudanese, Tamil, Myanmar and Congolese communities in Oz, as well as the UNHCR, with a view to sending envoys to relevant refugee centres to review and select suitable refugee families for permanent visas.
No easy task, I'm afraid, but in the current situation I think it must be done, and with some urgency.

I have made my position clear on other threads, regarding the overall worldwide refugee situation, and I see the only solution being to tackle the causes of this situation at its roots, in the countries concerned, by a massive international effort, diplomatically and developmentally, and, if necessary, by a very substantial UN peacekeeping deployment.

Our ability to relocate refugees within our own shores can only be token, but, undertaken appropriately, I believe it can be a win-win.

I am dismayed by our offshore processing and detention arrangements, and I believe these need to be closed post haste - either by the issuing of temporary protection visas or the return of unsuitable applicants to appropriate overseas international refugee centres.

Some of our recent refugee intake appear to be settling in well, and are shaping up to be really worthwhile contributors to our society.
These should be our beacon to where and how we can do the most good, both for our own society and for some most worthy refugee families.

Perhaps our governments could establish agricultural and/or horticultural facilities in rural and regional centres to accommodate some refugee families, at least as an interim, and could establish a public appeal towards such development?
Agricultural schools?

Saltpetre, we are of one accord re: our refugee intake.

20 000 per annum? Yes, but only within an immigration program that is heading towards net zero.

The causes of refugeeism need to be tackled at the roots, and our intake, even at 100 000 pa, would be only a token effort.

We should be considering the win-win aspect of our intake. As there are very needy refugees all over the world, we should be choosing the ones that are the most compatible with Australian society and the most likely to assist us rather than hinder us in achieving a truly sustainable high-quality-of-life society.

And yes, let’s get the detention centres shut down.

Of course the way to do that is to STOP the boats….which the current government is well on track to doing. However, those now in the centres need to be processed, and given the practice of document-destruction and the high propensity for non-refugee economic migrants to use the people-smuggling onshore-asylum-seeking method, their refugee determination or non-determination is difficult. This needs to be done properly. So the detention centres need to stay open until this is done.

I don’t like the idea of issuing TPVs or of otherwise letting applicants move freely in our society before their refugee claims have been fully assessed. The story with this in other countries is that some people would go underground and become very hard for the authorities to track. This would also create a considerably pull factor for more arrivals.

And by the way; in keeping with the main discussion on this thread, I will note that all of the very large amount of economic activity and government expenditure involved in dealing with onshore asylum seekers since Rudd’s amazing re-opening up of the whole issue in 2007, which has amounted to a huge economic expense, has been added to our GDP, has it not?

Perhaps Pericles could confirm or counter this.

You really should do some homework on this Ludwig. I have given you plenty of references that you can easily follow up on your own without my having to hold your hand every time. You keep making the same basic errors.

>>So all of this, which amounts to a very large amount of economic activity is really NEUTRAL…. and should not be added to GDP which indicates that it is ALL totally positive and advancing our economy! So….. where’s the misapprehension?<<

Your misapprehension is, as always, around the basis of GDP calculation. It counts all economic activity. Not just the parts that Ludwig considers to be "totally positive". That is because GDP is a measure of our... guess what? Economic activity. All of it. Even the bits you feel are "bad", or "neutral". It cannot be any other way, because this is the design point of the GDP calculation.

So, with that in mind, what you say here makes absolutely no sense whatsoever.

>>Surely you can appreciate that a large population increase requires a large duplication of all the basics – housing, roads, supermarkets, doctors… just to give them what the established population already has.<<

It isn't "duplication" Ludwig. It is additional. Additional housing. Additional roads. Additional supermarkets. Additional doctors.

It works like this. You build another supermarket that the new people will use. The "established population" will no doubt continue to buy from their original supermarket, while the new population will buy from the "duplicate" version. This increased turnover is reflected in an increase in GDP.

And because the new arrivals are more productive, GDP per capita will increase as well.

Stick to the beach, Ludwig. Until you can grasp this basic level of understanding, economics will continue to baffle you completely.

<< Your misapprehension is, as always, around the basis of GDP calculation. It counts all economic activity. Not just the parts that Ludwig considers to be "totally positive". That is because GDP is a measure of our... guess what? Economic activity. All of it. Even the bits you feel are "bad", or "neutral". >>

Scuuuze me Pericles, but this is what I keep telling YOU!!

GDP counts ALL economic activity… regardless of its merit. It does not count just the positive bits. YES, GDP is a measure of economic activity, NOT of what is good about our economy.

But guess what. It is taken as a prime indicator of what is good about our economy. The larger the better, end of story, according to our dumb pseudoeconomists and politicians!

<< It isn't "duplication" Ludwig. It is additional. >

Of course it is additional. But it is also duplication! How can duplication not be additional?? More houses, more roads, more shops and businesses of all sorts, all of which is just more of the same for more people. It is duplication. It is so obviously duplication. And it is so obviously +/- neutral in terms of benefits for the pre-existing population.

<< The "established population" will no doubt continue to buy from their original supermarket, while the new population will buy from the "duplicate" version. This increased turnover is reflected in an increase in GDP. >>

Yes!! !!

‘the “duplicate” version’. That’s exactly what it is.

Hey, look at what you’ve written here. It really is close to what I’ve been saying all along. Perhaps you’re finally getting it??

So then, onshore asylum seeking has cost us an enormous amount in since 2007. It is an OBVIOUS drain on our economy. But it has created a wide variety of economic activity… which by the definition of GDP gets included in GDP.

What have got to say about this, Pericles?

BTW, I had a grrreat day at the beach today, in exquisite late autmn weather, here in Cairns ( :>)

I wonder what impact there may be on GDP if the money to rebuild, detain, control borders, 'duplicate' infrastructure (roads, public housing, schools...) has to be borrowed, generating debt?

Surely such borrowings, whether by issuing government bonds, or from Oz banks and superannuation funds, etc, or whether borrowed from overseas, should be reflected as a deduction to GDP?
(Or, 'net' GDP?)
And the interest payable?

Puzzling.

Ludwig, my idea of TPVs is that they be applied/issued to genuine refugees, who also reasonably meet our basic intake criteria, in order to give them temporary asylum (even conditionally) - but leaving the option of later evaluation in respect of permanent residency.

Those who do not qualify as genuine refugees, or who for some reason do not meet even our basic intake criteria, in my way of thinking should be returned to an appropriate overseas international refugee/displaced-persons or UNHCR centre.
Now, I know such centres can be hell on earth, and in need of much greater international humanitarian support, but that is where I believe so much humanitarian effort needs to be focused - as well as, and most importantly, much greater international diplomatic and developmental efforts to correct the underlying causes of displacement, disadvantage and/or terror.

To send anyone back to such refugee centres would be a hard thing to do, but, if their claims are not more compelling than all those other hundreds and thousands, then I do not see that they can or should be afforded special treatment.
Such repatriation would of course be much harder on someone who has endured great hardship to make their way to a refuge country, perhaps over very many miles, and months, maybe even years.
Such factors/circumstances would also therefore have to be taken into account before sending anyone 'back'.

The whole issue is one helluva predicament.

GDP input? I guess Oz' direct expenditure would be.
But what of our foreign aid contributions? A deduction? And, if using borrowed money, would this qualify for a double-deduction from GDP?
(Funny how 'expenditure' and 'GDP' seem to be almost interchangeable?)
Where's revenue fit in?

Careful Saltpetre...

"GDP input? I guess Oz' direct expenditure would be.
But what of our foreign aid contributions? A deduction? And, if using borrowed money, would this qualify for a double-deduction from GDP?
(Funny how 'expenditure' and 'GDP' seem to be almost interchangeable?)
Where's revenue fit in?"

You're running the risk of mixing up the economic sponge, custard, jelly and cream to end up a trifle confused.

GDP is an established measure of a nation's economic activity. That is all it is. Responses to and interpretations of it vary, but neither change what it is.

Unlike the government's budget papers which seem to vary the economic parameters reported each and every year, making meaningful comparison and interpretation across time most difficult. Which is precisely the motive of the politicians in power... whoever they are.

National economics could be said to be analogous to epiphenomenalism where individual transactions are causally related but that the meaning ascribed to the totality of these is an emergent property.

I don't necessarily think this is as interesting as, well... suggesting that one measure of a nation's economic well-being could be changes in the number of accumulative person-years spent at the beach by its citizens.

Let's try this once more, shall we Ludwig.

>>But guess what. It is taken as a prime indicator of what is good about our economy. The larger the better, end of story, according to our dumb pseudoeconomists and politicians!<<

Larger is better, yes. Larger GDP per capita is also better, yes.

This is because smaller is worse.

Here's an observation from our own Lowy Institute:

"The above events have led to the now well known global downturn. All official forecasting agencies, such as the IMF and OECD, 
have described this downturn and so will not be expanded here. As the IMF notes ‘Global GDP is estimated to have fallen
 by an unprecedented 5 per cent in the fourth quarter (annualized), led by advanced economies, which contracted by around 7 per cent’"

http://melbourneinstitute.com/downloads/conferences/mckibbin_stoeckel_session_5.pdf

It should not have escaped your notice, even from a beach in FNQ, that this situation was regarded generally as a "bad thing".

>>What have got to say about this, Pericles?<<

A rising GDP is good, while a falling GDP is bad.

<< Larger is better, yes. Larger GDP per capita is also better, yes. >>

And your explanation for this is…

<< …because smaller is worse. >>

Haaahahahaaa!

I asked regarding all the economic activity that has been spurred by onshore asylum seeking…

>> What have you got to say about this, Pericles? <<

Your reply in totality is…

<< A rising GDP is good, while a falling GDP is bad. >>

Deeear o dear o dear!

I’m sure you wooda given a more comprehensive answer if you cooda! It is looking as though you really have seen the light… that you at long last do actually get what I am on about.

It is seems that this example of just how crazy GDP is - of onshore asylum seeking being an obvious enormous drain on our economy and yet generating a whole lot of economic activity that gets included in GDP, has done the trick.

continued

As for the GFC; it had everything to do with economists, bankers and politicians not sticking to the basic principles of economics. And one way in which they were (and continue to be) violating these basic principles is with the definition of GDP, and hence all the stuff that gets included in GDP totals that such so totally shouldn’t.

For as long as we continue to delude ourselves about our economic health, we will be on a road towards disaster a whole lot bigger than the GFC.

Hey, the way GDP is defined encourages politicians and their moon-unit economic advisers to continue to grow the economy at all costs… and to that end; maintain very high immigration… which simply sits at diametric odds with what we should be doing!

A REAL economist would see the need to keep the demand for goods, services and all manner of expenditure that our economy provides manageable, instead of having it constantly, rapidly and neverendingly increasing.

A real economist would see the imperative of keeping demand within the supply capability, with a high quality of supply and a big safety margin in case of hard times…. ie: sustainable.

THIS is what makes GDP so bad! What it is indicating as a good thing and a strategy to uphold, is almost totally the opposite to what we should do doing!

Not a particularly useful contribution, Ludwig.

>>Haaahahahaaa!<<

It appears that you are laughing at the idea that an increased GDP is good, while a decrease is bad. So please, do explain to us all how a reduction in GDP will benefit the Australian people?

>>I asked regarding all the economic activity that has been spurred by onshore asylum seeking…<<

Once again, you are demonstrating your ignorance as to what GDP consists of. Of course it includes the expense of managing the asylum seekers. How else would you account for the money that the employees spend in the supermarkets, the rent paid for their accommodation etc. etc.? It is fuelled by the allocation of taxpayers dollars, which have either been a) borrowed or b) diverted from other activities. Either way, it is economic activity, and therefore must be accounted for. The fact that you disagree with the allocation of funds this way does not make it disappear from the national accounts.

>>...onshore asylum seeking being an obvious enormous drain on our economy and yet generating a whole lot of economic activity that gets included in GDP<<

Indeed. As with cyclones, earthquakes, epidemics etc., if this kind of activity exceeds our country's ability to service them, we will eventually become poorer. And that level of "poorer" will be measured by a reduction in - guess what? - GDP.

In short, you really cannot have it both ways, Ludwig. An increase in GDP is good, a decrease in GDP is not good. What is there to laugh at in that?

Wm Trevor, (and Pericles, if you're listening),

Ok, I'm trying to make sense of the 'trifle'.

>>GDP is an established measure of a nation's economic activity.<<

And:
>> individual transactions are causally related but that the meaning ascribed to the totality of these is an emergent property.<<

So, I am assuming that overall GDP is compiled from business reporting - tax returns, reports to shareholders and the ASX - plus government(s) own records of government expenditures.

Perhaps then, the business component of GDP is revenue less costs, but before tax - or is it the total expenditure of the business?
(Even if the business does not actually produce a physical product, but only a service - say, like an IT business or a cleaning business.)

What about personal income (non-business, like from wages, share dividends, government handouts, bank interest, etc)?
Any contribution to GDP here?

As for revenue, I don't expect personal or company tax would figure in GDP, but what of government mining royalties? Just another revenue stream, another tax, and therefore not contributing to GDP - although a cost to the mining industry?

Then there's State government taxes and charges, and local government council rates - including charges for garbage disposal, water and sewage - plus DA fees and other charges for new development and construction.

Revenue then figures as the means for governments (Federal, State, Local) to incur expenditure, some of which would be on infrastructure and services (healthcare, education, aged care, transport, childminding rebates, welfare), grants to industry for R&D, special grants to schools and universities, maybe for bursaries or scholarships, and so on.

But if a business runs at a loss, even though it produced product or service, is the loss a deduction from GDP?

If government runs at a loss, relying on borrowings, is the loss then a deduction from GDP?

Is foreign aid a deduction from GDP?

Or, does total expenditure = GDP?

At 30 June 2011 Aust's National Net Worth was $8,089.9 Billion,
with a positive trajectory from 2007, but current and 'real' worth are at odds. How so?
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1301.0~2012~Main%20Features~National%20balance%20sheet~224

i was thinking..wondering if these 'bailouts'..affect gdp
the falling gdp will be fun..the death rattle grows louder
http://www.zerohedge.com/news/2014-05-26/retail-death-rattle-grows-louder

The pundits, politicians and delusional retail CEOs continue to await the revival of retail sales as if reality doesn’t exist. The 1 million retail stores, 109,000 shopping centers, and nearly 15 billion square feet of retail space for an aging, increasingly impoverished, and savings poor populace might be a tad too much and will require a slight downsizing – say 3 or 4 billion square feet. Considering the debt fueled frenzy from 2000 through 2008 added 2.7 billion square feet to our suburban sprawl concrete landscape, a divestiture of that foolish investment will be the floor.

If you think there are a lot of SPACE AVAILABLE signs dotting the countryside, you ain’t seen nothing yet. The mega-chains have already halted all expansion. That was the first step. The weaker players like Radio Shack, Sears, Family Dollar, Coldwater Creek, Staples, Barnes & Noble, Blockbuster and dozens of others are already closing stores by the hundreds. Thousands more will follow

Who is keeping the criminals on Wall Street criminals
out of jail? Eric Holder?
http://www.thedailysheeple.com/dave-kranzler-on-gold-housing-and-silver_052014

Is Covington/Burling, Eric Holders law firm, the most powerful law firm in the country? Remember, Holder was the Chief legal counsel for JPMorgan prior to becoming the Attorney General of the United States.

When was the last major gold deposit discovered, 10 million ounces or more, 10 years ago, 12 years ago? Barrick, GoldCorp, Newmont have all high-graded their existing mines to appear to be making money. What this means is they are processing the highest grade ore, the ore with the most gold per ton, to maximize their profits. This will not last long and these giant holes, with little gold left to process, is all that will remain. With the price of gold so low they are working over-time to produce as much gold as possible and get it to market. All of this just to try to stay profitable. How long will they be able to keep up this charade? (
http://www.youtube.com/watch?v=YmvuYTH5nU0

<< It appears that you are laughing at the idea that an increased GDP is good, while a decrease is bad. So please, do explain to us all how a reduction in GDP will benefit the Australian people? >>

Congrats Pericles on asking the most blatant straw-man question of all time. You know perfectly well what I found so humorous!

Moving right along…

Isn’t this an interesting aspect of GDP:

GDP = C + G + I + NX

C is all private consumption, or consumer spending, in a nation's economy
G is the sum of government spending
I is the sum of all the country's businesses spending on capital
NX = Exports – Imports.

So the esteemed economic minds that devised GDP could see the merit in subtracting imports, despite the fact they generate economic activity of all sorts. And yet they can’t see the merit in subtracting immigration!

Think about that. There is the most enormous inconsistency there.

Immigration generates a great deal economic activity as do imports… and yet one is subtracted from GDP while the other is added!!

Even back then in the primordial days of GDP, those primitive economists could see that there was merit in not including everything on the positive side of the ledger. It is just a crying shame that subsequent economists, with presumably a progressively better understanding of real economics, couldn’t have seen fit to refine that notion, and subtract or at least leave out a few other things that clearly should not contribute to GDP.

Following this sort of thinking, it is simply amazing Pericles that you; someone who purports to have a pretty good understanding of economics, has no problem with all the economic activity generated by onshore asylum seeking being included in our GDP total.

Crikey, if there is anything that should just totally be left out of the GDP calculation, it is this!

continued

<< An increase in GDP is good, a decrease in GDP is not good. >>

Now hold on. I think you might find that this aint necessarily so.

I can think of several scenarios:

1. If some common sense were to suddenly be injected into the definition of GDP and it did not include some of the stupid stuff that it now does, then we would have a considerably lower GDP in the first year with the new formula, which would not indicate a proportionally worse-off economy.

2. If we were to have a population that was decreasing, we could possibly have a GDP that was decreasing while the economy was improving… and while per-capita GDP was increasing.

3. There are others, but I think you get the message.

Interesting that you chose not to answer the question, Ludwig. Most illuminating, in fact.

I asked "So please, do explain to us all how a reduction in GDP will benefit the Australian people?"

And your response?

>>Moving right along…<<

It is not a good look, you know. Then, possibly realizing that this leaves your logic horrendously exposed, you offer:

>>If we were to have a population that was decreasing, we could possibly have a GDP that was decreasing while the economy was improving… and while per-capita GDP was increasing.<<

I've ignored the redefinition suggestion. That's just pure evasion.

So your suggestion is that we somehow engineer a decreasing population. I thought that would be your offering, as you keep banging on about immigration being an economic evil, but I'm a little surprised that you actually say it out loud.

Back to Ludwig-utopia then.

How will you bring this about? Who will do all the work ? How will you organize it that the remaining population suddenly becomes more productive (i.e. raising per capita GDP at the same time that GDP is falling)? What will be the age demographics of your reduced population - how will you retain the workforce that is needed to keep the oldies alive - or does that not worry you? How will you retain the brightest brains, in a dying economy - you certainly won't be able to afford to pay them internationally competitive salaries? Who will be left to teach in universities - this is after all a service, and according to you, does not contribute to our economy.

And why do I expect your response to this to be...

>>Moving right along…<<

All very good questions, Saltpetre.

>>So, I am assuming that overall GDP is compiled from business reporting - tax returns, reports to shareholders and the ASX - plus government(s) own records of government expenditures.<<

Amongst many other sources. Our ABS is at the heart of the statistics-gathering part of the exercise. You are clearly doing your research in the right place, but here is the relevant page that you may have missed:

http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1301.0~2012~Main%20Features~Defining%20and%20measuring%20GDP~221

>>Perhaps then, the business component of GDP is revenue less costs, but before tax - or is it the total expenditure of the business?<<

As you can see from the ABS explanation, this particular area is counted as "value-add", not total expenditure. But you can also see that there are three independent calculations that come to the same conclusion - Income, Expenditure and Production.

Taxation is entirely separate from these calculations, although the government will no doubt base their decisions on which part of the economy to tax, from the baseline calculation themselves.

Here's another guide, with less jargon

http://www.wikihow.com/Calculate-GDP

Might be a little simplistic in places, but useful as a cross-reference with the dry ABS stuff.

Hope this helps

OL'PERRIWRINKLES/[rip-wrinkles]QUOTE..<<..'m a little surprised that you actually say it out loud.>>

IM GLAD ITS..
PUT SIMPLY..IN WRITING
[you talk too fast..per*ridicules]..your like a great masters QUISLING..encoding/rather\than decoding*,with wisdom/but\wisdom/learned/of\ROTE..MEMORIZATION/Rather than origonal thinking..p[let-alone..any/applied patience\..for any essor/being's\seeing.

<<..Back to Ludwig-utopia then.

How will you bring this about?>>

THATS TROLLING[avoidance?]..IS LUDWIGS LUDETOPIA..indeed in the offing?

<<..Who will do all the work..?..>>

ITS STILL FEELS/LIKE AVOIDANCE/
but at least..framing..a new question..is an origonal thought[it might contain hidden gems/or just germs

<<..How will you organize it...that the remaining population suddenly becomes more productive..(i.e.raising per capita GDP}>>

OK MY WAY..IS GOVT..ORDER PEOPLE TO OVER INSURE/ON THEIR HOME.S
AND THEN OVERNIGHT burNOUT APPLIENCES SO HOT THEY START FIRES[everyone gets a bailout for twice the real values of their goods/ANd the gdp went through the roof[thus govt spending[as an expected claw-back percentage..of spending..spends its revenue share.percentages

regardless..of what..gdp was doing
pre the 'natural dissaster/payoff..<<..GDP is falling)?

now we get into the 'adsurdium...<<<..What will be the age demographics of your reduced population..>>

not age specific
job specifiuc [all 3 rd year apprenbtices]
<<..how will you retain the workforc>>

they can only spend their wage in the company store
and their wage will allways be one dollart less than they need
too easy

<>that is needed to keep the oldies alive>>

boost crime numbers/jail every petty crime
run the old peoples homes with prison labour[its a proven buisness model[but dont low wages = less gdp?

so let double wages..=\double gop

DAWD..GDP..DPP

its sounding more like a fish-slap/now..<<.n <<or does that not worry you?...How will you retain the brightest brains,..in a dying economy>>

people work/for homour/title/flexible employment terms
the imaginative/boss..needs but appiciate/their talent-s skillsets/extend to all/of\us.

<<..you certainly won't be able to afford to pay them internationally competitive salaries?>>

we can assure/them\this work
wont send their/SOUL\DIRECTLY..TO HELL.

<<..Who will be left to teach in universities ..>>

ANY TEACHER/WHO REALLY TEACHES/MAKES EACH NEW LEARNING[A NEW BUSINESS//OPPERTUINITY]..HIGHER EDUCATION IS ABOUT GETTING THE FRANCHISE/OR PEERR GROUP/SKILL SETS[EACH CLASS SETS UP A REAL BUSNESS/AS CHOSEN FROM SWTUDENMTS SKILLSETS

THE FRUITS OF THIS JOINED STUDY/CAN BE INVESTED..INTO
AND THE STUDENTS EACH HOLD SHARE ACCORDING TO THEIR INPUT[ITS ike super or hoiding shared patent]..at least thats how its done in heaven

[or hell/hard to tell/they interlap together
so much/on so many levels

<<..- this is after all a service,>>

or dis-service[who/is\to/judge?]

<<and according to you,..>>

dont put wurd..tords..ain anyones ,mouth ['not\a/quote]'

<<..And why..do I expect your response..to this to be...

>>Moving right along…<>>>
why dear perJULES..your living out what was..not what is
everything..we thought..was organised..but its organised..on illusion
http://www.washingtonsblog.com/2014/05/enron-2-0-wall-street-wants-manipulate-state-energy-markets-just-like-manipulates-every-market.html

yet you/talk/like..its a skill/talent..a fixed firm foundation
which has extremist paternalistic obsessive control/over everything/so much so we all stopped thinking.

but the fruit is/THE DEBT HEAPED UPON THE POOR
and the elite twice as rich/when..they all earned dIFFERENT KARMA

BUT KARMA..is the feminie aspect/[a real/bitch]

Pericles, you know those rails. Well… you’re off them entirely. They’re way back there behind you somewhere, well out of sight…. and your train (of thought) is heading straight towards a huge cliff!

You put up a blatant straw-man question, which failed to suck me in. I rightly side-stepped it… and you call it evasion, and ‘not a good look’.

Well, we’ve been debating this sort of stuff on OLO for years. Who do most OLOers usually side with? Who ultimately does a runner from the subject, because they no longer have any credulity or room to move with their flawed arguments? Not me.

So I’m happy to let others judge who is right, who is off-track and who is avoiding the issues and erecting straw-man arguments here.

<< So your suggestion is that we somehow engineer a decreasing population. >>

There you go again - deliberate diversion into straw-man la la land. You are asserting something you know to be false. I of course was not suggesting anything of the sort.

I’ve made my position on population abundantly clear on OLO – we should head towards net zero immigration, which would take immigration out of the population growth equation. Our population would continue to increase and would stabilise in some three or four decades time if the birthrate remains the same as it is now (the natural birthrate, not the artificially-enhanced baby-bonus birthrate). Then we should maintain a stable population. Or we could let it gently decline if that is deemed the best approach by that time. Or we could increase it if we are confident that the supply capability of all goods, services and everything else that we need is up to the task of matching the increasing demand, and in a sustainable manner.

Why do you do this Pericles? Why do you try to divert the discussion off into the wilderness and in so doing, imply that I hold views and positions that you know full well I don’t?

It’s not a good look. Doesn’t do your credibility any favours at all.

continued

Back to the topic then….

I hope you can see that your incredibly simplistic assertion that ‘an increase in GDP is good, a decrease in GDP is not good’, is incredibly flawed.

And um… I note that you had nothing to say about my point that exports are subtracted from GDP while immigration is added.

This is a biggie! It is surely a huge flaw in the GDP calculation.

Would you care to comment?

<< I've ignored the redefinition suggestion >>

But of course. That one’s just too hard for you. Mwa hahahaaa!

I do thankyou for injecting a bit of humour into what would otherwise quite a droll discussion ( :> )

My goodness, Ludwig. With all the pressure, you seem to be losing your grip on the English language too...

>>Who ultimately does a runner from the subject, because they no longer have any credulity<<

credulity n. a tendency to be too ready to believe that something is real or true

An interesting, but somewhat self-defeating, description. In fact, altogether a pretty feeble reason to leave an argument, don't you think?

And then there's this:

>>I do thankyou for injecting a bit of humour into what would otherwise quite a droll discussion<<

Surely, if the discussion was already droll, it wouldn't need an injection of humour?

I know it is difficult keeping it all together when every bit of logic and rational arguments are going against you. But do make an effort, there's a good chap.

Now, where were we.

>>You put up a blatant straw-man question<<

That's ridiculous, and you know it. You stated...

>>[GDP] is taken as a prime indicator of what is good about our economy. The larger the better, end of story, according to our dumb pseudoeconomists and politicians!<<

So the obvious inference is, if bigger is not better, smaller must be.

Yet you deny this too.

>>I note that you had nothing to say about my point that exports are subtracted from GDP while immigration is added.<<

Exports are subtracted, imports are added. Seems pretty straightforward.

Immigration is not "added", just the economic activity that immigrants create. Which is actually indistinguishable from the economic activity that anyone else creates. Including you.

And for the record, I've ignored the redefinition suggestion because giving you carte blanche to change the definition of GDP simply invalidates every argument, for or against.

>>I’ve made my position on population abundantly clear<<

Yep. It appears to me that You believe a smaller population will be good for Australia. Am I wrong?

Pericles, there is an amazing contrast between your excellent command of the Queen’s English and your off-the-rails views on all things economics and population-related.

Many posters have picked you up on this over the years. I am certainly not alone in headbanging with you on this stuff on OLO.

I'm not at all concerned about occasionally using words that might be technically incorrect, especially when the meaning in the context where used is perfectly clear.

My biggest PITA on OLO is MWS!!

I’ll expand…

The biggest pain in the ar…mpit about writing stuff on OLO has been this extraordinary missing word syndrome that I suffer terribly from. It seems that on average, there is one MW in every bloody post. No amount of proof-reading or spell-and-grammar checking can prevent it!

Second to this is the OLW (one-letter-wrong) syndrome… where a post is corrupted by a single incorrect letter, such as ‘it’ where it should be ‘is’ or ‘out’ where it should be ‘our’

I HATE that stuff, with a vengeance!! I wish we could edit after posting, as per Skype and Facebook!

You are a very minor PITA in comparison, Pericles ( :>)

But I do thank you for going to considerable lengths to point out that my use of the words; ‘credulity’ and ‘droll’ were not the best choices.

So, after all of our correspondence, which must now number in the thousands of posts, the grand total of incorrect words that I have used and that you have pointed out is…..um…….2!

I’m sure if there had been any others, you woodna held back in coming forward about them!!

Now, where the blazes were we....

Oh yes….

<< So the obvious inference is, if bigger is not better, smaller must be. >>

If GDP is bigger while being based on a whole lot of stuff that does not indicate that our economy is improving, then bigger is certainly not better…. and smaller would be even worse!!

<< Immigration is not "added", just the economic activity that immigrants create. >>

Um… yeayus!

All that enormous economic activity from our enormous immigration intake gets added to GDP, despite it being +/-NEUTRAL in terms of supply and demand and our overall economic wherewithal.

So, if all of this is going to be added to GDP, then why wouldn’t imports be added as well? Or at least not subtracted. Why wouldn’t the silly economists and politicians strive to make our GDP appears as big as possible? This is what they seem to be doing in every way, except with the subtraction of imports!

<< …I've ignored the redefinition suggestion because giving you carte blanche to change the definition of GDP simply invalidates every argument, for or against. >>

So what you are actually saying is that you have a completely closed mind on the idea of redefining and thus improving GDP so that it could become a much more meaningful economic indicator ??

<< Yep. It appears to me that You believe a smaller population will be good for Australia. Am I wrong? >>

I’ve made my position on population abundantly clear. But as is your wont (sheesh, I hope I’ve used the right word here), you’ve read something else into it which is completely different to what I have said.

You are wrong. I don’t advocate a smaller population. I advocate the lowest population level that we can achieve from this point forward while maintaining a significant immigration program and accepting that our birthrate (minus the influence of the baby bonus) is actually very good and doesn’t need to be further lowered.

Not sure about that, Ludwig.

>>Pericles, there is an amazing contrast between your excellent command of the Queen’s English and your off-the-rails views on all things economics and population-related.<<

I'd say that I am equally picky - pedantic, if you will - on both counts.

>>Many posters have picked you up on this over the years. I am certainly not alone in headbanging with you on this stuff on OLO.<<

You are the most persistent, though. Most of the others back off when they realize that they haven't quite thought it all through in a logical fashion, or hadn't done their homework very well.

Like here, for instance...

>>If GDP is bigger while being based on a whole lot of stuff that does not indicate that our economy is improving, then bigger is certainly not better…. and smaller would be even worse!!<<

Coles supermarkets turn over fifty billion dollars a year, employ fiftyfive thousand people, at a net margin of less than four percent.

My local mini-mart turns over a few hundred thousand, employs one guy (who is there from 7 in the morning to 10 at night), and has net margins closer to 15%.

Thinking in GDP terms, which of these do you think would have a) power to make things happen, e.g build new stores, upgrade roads, revitalize a shopping mall etc., and b) be more able to withstand economic shocks, downturns, interest rate changes etc.etc.?

It is the same with economies. The larger the economy (you only have to think of the US to understand this) the greater their power to make things happen, and to withstand external economic pressures. They do of course achieve this latter through their mega borrowing power, but seem to rub along somehow. This resilience is not always available to other, smaller economies, which is why it is generally accepted that having a growing GDP is actually better for that country's people than a shrinking one.

If you still disagree, can you perhaps offer an example of where a country's shrinking economy has benefitted its citizenry??

<< I'd say that I am equally picky - pedantic, if you will - on both counts. >>

Really. Oh, well I’ll take that asa compliment, seeinas you ave extreemely rarely picked me up on me yuse ov the old country’s langwidge!

<< Most of the others back off when they realize that they haven't quite thought it all through in a logical fashion, or hadn't done their homework very well. >>

Haaa hahaahaaa haaahaaaaaa ha …… ha ….haaha……….AAAAAAAAAH HAAAAAAA HAHAHAHAHAHAAA!

What a fascinating perception!! My perception is that you have time and time again lowered one’s head, tucked one’s ears back and slinked off with tail between legs, after others have pointed out the absolute folly of your arguments!

<< The larger the economy … the greater… [the] power to make things happen… >>

Whoa, hold on there. You’re off with the fairies!

Has our economy, which is apparently 250% larger than ten years ago, given us 250% more power to get infrastructure up to scratch, to make the quality of health and education considerably better, to raise our quality of life and environment, or bring us closer to a sustainable society?

Has it given us one iota more power?

Pericles, a larger economy does NOT give us more power to do the essential things, for as long as the number of people and the number of issues and the magnitude of those issues continues to increase!!

This is the great furphy of our time: that economic growth is the answer to all our ills, end of story.

This is what GDP tries to tell us. And isn’t it just so TOTALLY and UTTERLY WRONG!

If we were to increase economic turnover and profits while NOT increasing the number of pie slices that it all has to be divided up amongst, then we might be at the start of the right track towards a healthy future.

But an ever-bigger economy, which has an ever-bigger demand for everything built into it as a fundamental element, is just going to get us NOWHERE!

Ludwig, you're not alone in making the occasional 'typo'.
Get this one:

1. >The new sware shop [sic] offer values ALZ at $4.35< (share swop?[sic]= swap)
[extract from an equities 'report'.]

And, this one (copied directly, using Ctrl-C) from 'wikiHow' re calculating Real GDP from Nominal GDP (i.e. to take account of inflation - in this case of 25% - which 'wiki' explains gives a 'deflator' of 125 [1 + 0.25, all x 100 = 125{%}) [Note, 'wiki' did not include the %]

(My Note 1. 'wiki' would have been better to have left this 'deflator' as 1.25,; but below you will see why, and will see a second, and actual 'mistake' in their calculation):

2. >>"Divide the nominal GDP by the deflator. Real GDP is equal to the ratio of your nominal GDP divided by 100. As an equation, it starts off like this: Nominal GDP ÷ Real GDP = Deflator ÷ 100.

So, if your current nominal GDP is $10 million, and your deflator is 125 (inflation was 25% from the base period to the current period), this is how you'd set up your equation:
$10,000,000 ÷ Real GDP = 125 ÷ 100
$10,000,000 ÷ Real GDP = 1.25
$10,000,000 = 1.25 ÷ Real GDP
$10,000,000 ÷ 1.25 = Real GDP
$8,000,000 = Real GDP"<< [my parentheses, at both ends of quote.]

My Note 2. Just taking the first sentence of the above instruction:
>Divide the nominal GDP by the deflator.<
And, using 1.25 as the 'deflator' gives $10 million divided by 1.25 = $8 million. (Hence, no need for the rest of the babble.)

Note 3. The second sentence >Real GDP is ... 100< is gobbledegook!

Note 4. Regarding the above 'calculation':
Second line finally 'reveals' the 1.25,
Third line is 'wrong', and should read $10m = 1.25 X "Real GDP" [and not, divided by.]

Which then finally leads in fourth line to $10m/1.25 = $8m [in fifth line.]
Phew, what a torment! (Talk about 'life wasn't meant to be easy'?)

Anyhow, Ludwig, Exports minus Imports = 'Balance of Trade'.
(Or, Income from overseas interests, less payments to overseas interests = 'Balance'.) (A Logical 'adjustment' to locally 'produced' income/'product'.)

And, me ol' mate, I think a part of the explanation of why we do not seem to have seen much of that '250%' you mention, is perhaps that we (Oz) were a bit behind the proverbial '8' ball beforehand - as far as public infrastructure, education, healthcare, etc - possibly due to 'State Governments' lack of fiscal prowess [or incompetence?], or, in NSW, the likes of .., .. and .., and Water .., Wine, Mining ..?

(The Recession we 'had to have'; the 'Banana Republic'; the 'level playing field'; "Free" Trade; BLF; Water-side Workers; Three Tiers of 'Government'; "Batts"; "Halls"; Consultancies, Commissions, and more Consultancies, Studies, Committees, Inquiries ...)

Additionally, we must have had quite an increase in population during that 250% period you mentioned (though I haven't looked up the actual figures), so the GDP 'growth' has been spread more widely.
Public expenditure in 'accommodating' a portion of that population increase would also have diluted the pool available for 'the rest'.
(Guess you know what 'portion' that might have been; plus perhaps a few little-one 'bonuses'?)

And, I wonder if that 250% was 'REAL' or 'Nominal'?
(If overall inflation in the period was 250%, then 'Real' = 1.0 X Starting Point.)

Pericles,

As, Exports - Imports; = 'Balance';
Then, why not 'Loans' to overseas interests 'Minus' 'Borrowings' from overseas interests? (As a logical 'adjustment' to GDP? - when measured by the Income method, or, in 'effect' when measuring by the Expenditure method.)

Sorry, I haven't yet had a chance to absorb the ABS info in the link you most kindly provided; but I will get to it.

But surely, if one borrows in order to 'grow' GDP, and there is interest to pay on such borrowings, then any resultant 'growth' would have to be 'adjusted' to take account of loan-repayment responsibilities - principal plus interest?
(I guess the 'PIGS' {who, in the end result, couldn't 'fly'} could answer that one for us.)

I can't convince myself that 'growth' and population-increase are co-dependent.
(In truth, I'm not even convinced that growth is even essential - unless one is preparing for war, or seeking utopian affluence. In peace, many alternatives are available for 'production', and productivity.)
Firstly there are finite limits to population growth - unless one totally throws caution to the wind, and lets the chips fall where they may. A fool's outlook, ultimately.
Secondly, growth for its own sake is geared to make some inordinately wealthy, and masses wanting desperately to catch up; whereas a more effective distribution of existing 'product' could provide reasonably for all, without forever chasing after the treadmill to the stars, to eventual total un-sustainability.

If a virus doesn't get us first, 'growth' may ultimately desolate this incredible planet. And, for what?

Hang in there, Saltpetre... economic statistics has always been an arcane science.

Often the concepts behind the calculations are more easily grasped. Like this from the Reserve Bank,

"GDP - Gross Domestic Product. A key measure of the value of economic production in the economy. GDP is determined in one of three ways: the value of goods and services produced less the cost of production; the sum of incomes generated by production; the sum of final expenditure on goods and services produced plus exports minus imports. An average of the three approaches may be calculated and is also referred to as GDP."

This might be a useful link:

http://www.econlib.org/library/CEECategory.html

If you need to lighten the mood... Spurious Correlations is a fun couple of minutes:

http://www.tylervigen.com/

All economics, to my mind, extend from a couple of basic concepts. Like the expression: 'every problem is either; you want something you can't have or you have something you can't get rid of', economics seems to be reducible to: 'someone has a surplus of something and someone else wants more of it'.

The complexity arises from the myriad ways individuals, groups, organizations and states deal with this.

This is right up there with your best efforts, Ludwig, congratulations.

>>Haaa hahaahaaa haaahaaaaaa ha …… ha ….haaha……….AAAAAAAAAH HAAAAAAA HAHAHAHAHAHAAA!<<

It is always good to have strong, constructive discussions with you, on topics in which you can add your wit, wisdom and undoubted expertise in this manner.

>>Has our economy, which is apparently 250% larger than ten years ago, given us 250% more power to get infrastructure up to scratch, to make the quality of health and education considerably better, to raise our quality of life and environment, or bring us closer to a sustainable society?<<

It has most certainly played a part in doing so. Indeed, far more than a declining GDP would.

But I'm not sure where you are getting your figures from - as far as I can tell, our overall economy, measured in GDP terms, is 150% larger over the ten years, not 250%. But let's not worry about detail, shall we.

It would be interesting for you to consider the alternative, though. What would be our situation here if GDP were to decline by - say - a mere 10%. Would you feel better, or worse off? Would we be able to build more, or fewer, hospitals, schools etc.?

You would do well to take a look at some of the European economies whose GDP has shrunk over the past few years, and ask them the question: would you prefer to live in a growing, or a shrinking economy?

And there's no need to exaggerate.

>>This is the great furphy of our time: that economic growth is the answer to all our ills, end of story.<<

It is definitely one very important component, yes. But no-one in their right mind would isolate it as the only important variable, and certainly wouldn't go so far as to describe it "the answer to all our ills". That's just self-serving hyperbole.

>>But an ever-bigger economy, which has an ever-bigger demand for everything built into it as a fundamental element, is just going to get us NOWHERE!<<

Except better off, of course. [See per capita GDP for details]

Talking about the state of our economy -
the following article may be of interest to those
that are willing to read from sources other than those
of only - NewsCorp Ltd:

http://newmatilda.com/2014/05/26/real-debt-danger

<< Additionally, we must have had quite an increase in population during that 250% period you mentioned (though I haven't looked up the actual figures), so the GDP 'growth' has been spread more widely. >>

That’s the biggie, Saltpetre.

If we had had a moderate rate of immigration over that period, all else being equal, I reckon our economy would be hooting along, in terms of achieving all the improvements that is supposed to achieve.

<< I can't convince myself that 'growth' and population-increase are co-dependent. >>

They certainly aren’t co-dependent. Although they have been closely correlated in Australia for decades, even through the mining boom.

Of course there is enormous folly in that: massive growth in infrastructure, service and everything else on the supply side of the equation, which is closely correlated to massively increasing demand (population growth), is just pointless!

But if you look at GDP, you will think that it is all fantastic!

<< This is right up there with your best efforts, Ludwig, congratulations. >>

Why thankyou Pericles my friend!

I’m a down-to-earth person. If you say something silly, I’ll let you know about it. If you say something hilarious, I’ll ROFL around for ages…. then I’ll slowly pick myself up,…. fall back on the floor and ROFL some more… then eventually get myself together, and succinctly express my great appreciation of your humour in my follow-up post!

<< It has most certainly played a part in doing so. Indeed, far more than a declining GDP would. >>

Are you sure about that??

This enormous increase in GDP and thus in our economy doesn’t seem to have achieved much at all. Look at infrastructure, services, environment and sustainability. Where are the real improvements?

<< …our overall economy, measured in GDP terms, is 150% larger over the ten years, not 250% >>

Quite right. It is 250% as large as it was in 2004, or 150% larger. Thankyou for the clarification.

<< What would be our situation here if GDP were to decline by - say - a mere 10%. Would you feel better, or worse off? Would we be able to build more, or fewer, hospitals, schools etc.? >>

If our GDP declined by 10% while population growth stayed the same, we’d not be in a good place. But if population growth declined by 20%, we’d be in a better place than if we had an increase in GDP accompanied by the normal rate of increase in population size.

And of course if we had a lower rate of population growth, we wouldn’t need so many new hospitals, schools, etc. We would initially, but then the demand would fall away somewhat in subsequent years.

continued

<< And there's no need to exaggerate - > This is the great furphy of our time: that economic growth is the answer to all our ills, end of story.< >>

No exaggeration there at all. That is exactly how it is. If it wasn’t, then our decisionmakers would understand that massive growth that is underpinned by a massively increasing demand for everything is just bonkers. They apparently don’t understand this most basic of economic principles.

<< It is definitely one very important component, yes. >>

Well I’m pleased you can appreciate that.

<< But no-one in their right mind would isolate it as the only important variable… >>

Sure. There are several other huge things that come into play. Not least the enormous power that the big business profit motive has over our government decisionmakers.

Thank you Foxy, finally an article I can understand about debt. 'The Real Debt Danger' by Ian McAuley in 'NewMatilda'. Unfortunately 'NewMatilda' is not approved for consumption by our mates the 'Usual Suspects' on OLO. These guys exist purely on a bland diet of "Ruperts Rubbish" as fed to them through a daily ingestion of half truths and down right lies they avidly consume freely, complements pf the "Murdoch Mouthpiece", 'News Limited'. With the words of the Profit Rupert ringing in their ears, which are duly reinforced by his disciples Tax Em' Tony and Joe Cockey, the poor unfortunate 'Usual Suspects' live in a fantasy hell of fear and loathing about debt and its implications, totally divorced from the reality of Australia's situation!
Ludwig, thanks for your contribution it makes a lot of sense to me. This business of "growth" which politicians from both sides seem to treat as the ultimate ideal, given the Worlds population explosion can't be SUSTAINABLE! To me, its a bit like, as the balloon gets bigger, the simply solution is to pump more air in, which we all know where that leads in the long term.