Family Leave

[Toni]

You're still evading rather than addressing the point. Standard GDP calculations will count that $400.

If I remember correctly, ld is an economist who holds a Ph.D. and you are not.

I'm pretty sure he understands what is counted as GDP much better than you do. Heck, I've taken exactly one economics class in my life and I have a better understanding of GDP than you apparently do.

Also, your little sidebar re: GDP makes zero sense within the context of this thread.

Then he needs to turn in his Ph.D.

No: you need to recognize the limits of your knowledge and that googling an example on the internet is not the same thing as knowing what you are talking about.

 

[Toni]

Dictionary: "GDP: abbreviation for Gross Domestic Product: the total value of goods and services produced by a country in a year". See anything about income in there??

First, you provided a seemingly pointless example. Then after it is shown to be incorrect, you disputed the basis of your own example. After that is shown to be incorrect, you respond with a glaring false claim that the $400 was not included in my correction.

It's quite relevant and you haven't proven anything other than your lack of knowledge.

All this time, you have refused to explain the point of your example. Why not attempt to make sense of your example with an explanation?

This pointless side thread came about because you didn't want to accept the point I was making and threw out garbage.

You're the one who is not very knowledgeable and throw out irrelevant garbage. Seriously, Loren. Sometimes, I think you skip a lot of words in posts.

 

[laughing dog]

Dictionary: "GDP: abbreviation for Gross Domestic Product: the total value of goods and services produced by a country in a year". See anything about income in there??

GDP can be determined by
1) the value added approach: total gross value added,
2) the income approach : Income earned, and
3) the expenditure approach: the value of expenditures on final goods and services.

This is taught in every traditional university economics 101.
Your definition is the expenditure approach and the most common one.
From  Gross_domestic_product

Income approach

The second way of estimating GDP is to use "the sum of primary incomes distributed by resident producer units".[5]

If GDP is calculated this way it is sometimes called gross domestic income (GDI), or GDP (I). GDI should provide the same amount as the expenditure method described later. By definition, GDI is equal to GDP. In practice, however, measurement errors will make the two figures slightly off when reported by national statistical agencies.

This method measures GDP by adding incomes that firms pay households for factors of production they hire - wages for labour, interest for capital, rent for land and profits for entrepreneurship.

The US "National Income and Expenditure Accounts" divide incomes into five categories:

Wages, salaries, and supplementary labour income
Corporate profits
Interest and miscellaneous investment income
Farmers' incomes
Income from non-farm unincorporated businesses

These five income components sum to net domestic income at factor cost.

Two adjustments must be made to get GDP:

Indirect taxes minus subsidies are added to get from factor cost to market prices.
Depreciation (or capital consumption allowance) is added to get from net domestic product to gross domestic product.

Total income can be subdivided according to various schemes, leading to various formulae for GDP measured by the income approach. A common one is:

GDP = compensation of employees + gross operating surplus + gross mixed income + taxes less subsidies on production and imports
GDP = COE + GOS + GMI + TP & M – SP & M

Compensation of employees (COE) measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to social security and other such programs.
Gross operating surplus (GOS) is the surplus due to owners of incorporated businesses. Often called profits, although only a subset of total costs are subtracted from gross output to calculate GOS.
Gross mixed income (GMI) is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.

The sum of COE, GOS and GMI is called total factor income; it is the income of all of the factors of production in society. It measures the value of GDP at factor (basic) prices. The difference between basic prices and final prices (those used in the expenditure calculation) is the total taxes and subsidies that the government has levied or paid on that production. So adding taxes less subsidies on production and imports converts GDP(I) at factor cost to GDP(I) at final prices.

Total factor income is also sometimes expressed as:

Total factor income = employee compensation + corporate profits + proprietor's income + rental income + net interest[16]

As an aside, I spend a number of years using NIPA (national income and product account) data from the Bureau of Economic Analysis (BEA) that collects and publishes GDP data to build and forecast GDP from the income approach. I have probably spent more time using NIPA tables over the past 30 years than you have posting here.

It's quite relevant and you haven't proven anything other than your lack of knowledge.

I understand you are unable to acknowledge your lack of knowledge about GDP. Everyone makes mistakes. You made one. I made your example accurate - there is no reason to get upset.

You still have not explained how your inaccurate example is relevant. After numerous requests for an explanation, all you have done is spew evasions. Why is that?

 

[Loren Pechtel]

GDP can be determined by
1) the value added approach: total gross value added,
2) the income approach : Income earned, and
3) the expenditure approach: the value of expenditures on final goods and services.

This is taught in every traditional university economics 101.
Your definition is the expenditure approach and the most common one.
From  Gross_domestic_product


As an aside, I spend a number of years using NIPA (national income and product account) data from the Bureau of Economic Analysis (BEA) that collects and publishes GDP data to build and forecast GDP from the income approach. I have probably spent more time using NIPA tables over the past 30 years than you have posting here.

It's quite relevant and you haven't proven anything other than your lack of knowledge.

I understand you are unable to acknowledge your lack of knowledge about GDP. Everyone makes mistakes. You made one. I made your example accurate - there is no reason to get upset.

You still have not explained how your inaccurate example is relevant. After numerous requests for an explanation, all you have done is spew evasions. Why is that?

And the company that made the widget maker has $400/day in income. You're still getting the $2,400 GDP.

 

[laughing dog]

GDP can be determined by
1) the value added approach: total gross value added,
2) the income approach : Income earned, and
3) the expenditure approach: the value of expenditures on final goods and services.

This is taught in every traditional university economics 101.
Your definition is the expenditure approach and the most common one.
From  Gross_domestic_product


As an aside, I spend a number of years using NIPA (national income and product account) data from the Bureau of Economic Analysis (BEA) that collects and publishes GDP data to build and forecast GDP from the income approach. I have probably spent more time using NIPA tables over the past 30 years than you have posting here.

It's quite relevant and you haven't proven anything other than your lack of knowledge.

I understand you are unable to acknowledge your lack of knowledge about GDP. Everyone makes mistakes. You made one. I made your example accurate - there is no reason to get upset.

You still have not explained how your inaccurate example is relevant. After numerous requests for an explanation, all you have done is spew evasions. Why is that?

And the company that made the widget maker has $400/day in income. You're still getting the $2,400 GDP.

No. The total market value of the widgets includes income paid to the factors of production, so the $400 is included in the market value of the widgets.

It is been a couple of days and at least 3 requests, still waiting for an explanation about the relevancy of your widget example.

 

[Loren Pechtel]

And the company that made the widget maker has $400/day in income. You're still getting the $2,400 GDP.

No. The total market value of the widgets includes income paid to the factors of production, so the $400 is included in the market value of the widgets.

It is been a couple of days and at least 3 requests, still waiting for an explanation about the relevancy of your widget example.

I'm showing that it's not just a division between owners and labor, but a division between owners, labor, and tools. The amount of equipment per worker has skyrocketed in many areas, of course labor gets a smaller part of the pie!

You're assuming it's even possible to figure out the total consumer market value--you can't because a lot of things are sold both to business and to consumers--and not all of those business sales will be reported as such. The data simply doesn't exist.

 

[laughing dog]

And the company that made the widget maker has $400/day in income. You're still getting the $2,400 GDP.

No. The total market value of the widgets includes income paid to the factors of production, so the $400 is included in the market value of the widgets.

It is been a couple of days and at least 3 requests, still waiting for an explanation about the relevancy of your widget example.

I'm showing that it's not just a division between owners and labor, but a division between owners, labor, and tools. The amount of equipment per worker has skyrocketed in many areas, of course labor gets a smaller part of the pie!

Tools are part of the "owners". And tools, by themselves, produce nothing. So, your point does not show what you think it does.

You're assuming it's even possible to figure out the total consumer market value--you can't because a lot of things are sold both to business and to consumers--and not all of those business sales will be reported as such. The data simply doesn't exist.

No, income earned is income earned from production of everything. Sorry, you really do not seem to understand GDP accounting.

 

[Loren Pechtel]

I'm showing that it's not just a division between owners and labor, but a division between owners, labor, and tools. The amount of equipment per worker has skyrocketed in many areas, of course labor gets a smaller part of the pie!

Tools are part of the "owners". And tools, by themselves, produce nothing. So, your point does not show what you think it does.

You're assuming it's even possible to figure out the total consumer market value--you can't because a lot of things are sold both to business and to consumers--and not all of those business sales will be reported as such. The data simply doesn't exist.

No, income earned is income earned from production of everything. Sorry, you really do not seem to understand GDP accounting.

If you're trying to count it by paychecks (which is not GDP!!) you'll still get it wrong because with the self-employed you have no good way to fix exactly what is income vs investment gains (from the money spent on whatever they use for their job.)

 

[Toni]

Tools are part of the "owners". And tools, by themselves, produce nothing. So, your point does not show what you think it does.
No, income earned is income earned from production of everything. Sorry, you really do not seem to understand GDP accounting.

If you're trying to count it by paychecks (which is not GDP!!) you'll still get it wrong because with the self-employed you have no good way to fix exactly what is income vs investment gains (from the money spent on whatever they use for their job.)

Just no.

Even I can tell that you don't know what you are talking about and I've only had one economics course in my life. It is obvious that you don't really understand the terms as an economist uses them and that you are determined that other people are wrong about issues they are actually expert in because you disagree with them politically even though you actually don't really understand the issue you are arguing about in the first place.

 

[Loren Pechtel]

Tools are part of the "owners". And tools, by themselves, produce nothing. So, your point does not show what you think it does.
No, income earned is income earned from production of everything. Sorry, you really do not seem to understand GDP accounting.

If you're trying to count it by paychecks (which is not GDP!!) you'll still get it wrong because with the self-employed you have no good way to fix exactly what is income vs investment gains (from the money spent on whatever they use for their job.)

Just no.

Even I can tell that you don't know what you are talking about and I've only had one economics course in my life. It is obvious that you don't really understand the terms as an economist uses them and that you are determined that other people are wrong about issues they are actually expert in because you disagree with them politically even though you actually don't really understand the issue you are arguing about in the first place.

He's holding out for a definition that's contrary to even the dictionary.

 

[laughing dog]

Just no.

Even I can tell that you don't know what you are talking about and I've only had one economics course in my life. It is obvious that you don't really understand the terms as an economist uses them and that you are determined that other people are wrong about issues they are actually expert in because you disagree with them politically even though you actually don't really understand the issue you are arguing about in the first place.

He's holding out for a definition that's contrary to even the dictionary.

I am not holding out for anything. I provided a Wiki link that confirms that GDP can (and is) measured in 3 different ways: value added, income earned, and spending on final goods and services.  National_Income_and_Product_Accounts provides the following table for USA in 2003

National income accounts of the U.S., 2003[note 1]
Billions of current US$
Employee compensation [note 2] 6,289.00
Proprietors' income with IVA and CCA [note 3] 834.10
Rental income of persons with CCA 153.80
Corporate profits with IVA and CCA [note 4] 1,021.10
Net interest and miscellaneous payments 543.00
Taxes on production and imports 798.10
Less: subsidies −46.70
Business current transfer payments (net) 77.70
Current surplus of government enterprises 9.50
Equals: national income (NI) 9,679.60
Statistical discrepancy 25.60
Equals: net national product (NNP) 9,705.20
Consumption of fixed capital 1,353.90
Equals: gross national product (GNP) 11,059.10
Income receipts from the rest of the world 273.90
Less: Income payments to the rest of the world −329.00
Equals: gross domestic product (GDP) [note 5] 11,004.00

As anyone can see, it delineates between employee compensation and the self-employed (who are included in among proprietors or corporations depending on their legal status).

NIPA accounting is apolitical - it is what it is and this type of national income accounting has been carried out for decades in this manner.
Apparently, you did not bother to read the Wiki link about GDP that I provided earlier. All I can do is provide you with the correct information but I cannot make you to properly educate yourself.