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.