When Soviet Living Standards Will Be better

[barbos]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

I have no idea what point you are making here.

 

[fromderinside]

People don't eat percentage growth. Living standards are based on the absolute number.

I thought we were talking about economic growth which properly measured as percentage growth.
As for living standards, then numbers you provided do not apply because as I have said before you need to look at purchasing parity GDP.

If one has a low enough beginning point one can have greater PP every year and keep falling further and further behind a nation with significantly higher baseline. PP isn't very meaningful except relative to previous suffering. We're talking about growth here not less suffering.

 

[arkirk]

I thought we were talking about economic growth which properly measured as percentage growth.
As for living standards, then numbers you provided do not apply because as I have said before you need to look at purchasing parity GDP.

If one has a low enough beginning point one can have greater PP every year and keep falling further and further behind a nation with significantly higher baseline. PP isn't very meaningful except relative to previous suffering. We're talking about growth here not less suffering.

One of the peculiarities of a market economy is that your standard of living is what you income allows you to buy...and in this country we actually have no STANDARD OF LIVING. In Flint, you are apt to be poisoned by the water you get in your home. If you are one of the .1% you fly from luxury accommodation to luxury accommodation in your Lear jet. Neither life deserves to be considered a "standard of living." Medians and averages are not standards. These for the average person are on the decline...even though we have a huge population that would gladly accept some of the former Soviet housing an living accommodations of the past. The rich in this country are very happy to obfuscate and make data on actual living conditions of Americans a matter of public record.

 

[dismal]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

I have no idea what point you are making here.

It's called "math".

 

[bilby]

I thought we were talking about economic growth which properly measured as percentage growth.
As for living standards, then numbers you provided do not apply because as I have said before you need to look at purchasing parity GDP.

There may be times when percentage growth may make sense to talk about. But when we are asking if X lives better than Y then absolute level is the more relevant thing.

The problem with percentage growth is it can be misleading when the starting point is really low. Like China starting at $250 GDP per capita under the communists. They have had massive levels of percentage growth in the last several decades but they are just getting to the point where they are passing Jamaica in absolute GDP per capita.

Generally those wildly high percentage growth numbers when starting from a low and previously suppressed base number are not going to be sustainable. In a few decades you'd have to own the world.

My understanding is that that's pretty much what the Chinese plan to do.

They started by buying the USA. The Americans didn't even notice.

 

[bilby]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

LOL.

You really think that someone whose purchasing power has increased from 'one meal a day' to 'three meals a day' has seen less of a living standard increase than someone who has gone from 'one Ferrari in the garage' to 'three Ferraris in the garage', (or even from 'new clothes once a decade' to 'new clothes once a year'), don't you.

That's the problem with looking only at money; it's a good measure of all kinds of things, but quality of life isn't one of them. Sure, more money is slightly correlated with a better life, most of the time; but the relationship is far from directly proportional. Gains at the low end are worth far more, in terms of living standard per dollar, than gains at the top end.

Give a Tanzanian peasant farmer an old bicycle worth $10, and it will become his most treasured possession, and will totally change his life.

Give the same $10 old bicycle to an upper middle class American suburbanite, and he will put it straight in the trash.

 

[dismal]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

LOL.

You really think that someone whose purchasing power has increased from 'one meal a day' to 'three meals a day' has seen less of a living standard increase than someone who has gone from 'one Ferrari in the garage' to 'three Ferraris in the garage', (or even from 'new clothes once a decade' to 'new clothes once a year'), don't you.

That's the problem with looking only at money; it's a good measure of all kinds of things, but quality of life isn't one of them. Sure, more money is slightly correlated with a better life, most of the time; but the relationship is far from directly proportional. Gains at the low end are worth far more, in terms of living standard per dollar, than gains at the top end.

Give a Tanzanian peasant farmer an old bicycle worth $10, and it will become his most treasured possession, and will totally change his life.

Give the same $10 old bicycle to an upper middle class American suburbanite, and he will put it straight in the trash.

Consider this:

Two people start a foot race. Bob runs 3 laps in the first ten minutes. Jim runs 1 lap in the first ten minutes. For the next 10 minutes Bob increases his pace 0% while Jim increases his pace 100%. How many laps does Jim make up in the second 10 minutes of the race? (I tried to keep the math easy for the leftists.)

Or, alternatively if you are convinced a person who has gained $5000 has gained more than a person who has gained $250 we can test this directly. You send me $5000 and I'll send you $250 and we'll meet back here to chat about who has gained more.

 

[bilby]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

LOL.

You really think that someone whose purchasing power has increased from 'one meal a day' to 'three meals a day' has seen less of a living standard increase than someone who has gone from 'one Ferrari in the garage' to 'three Ferraris in the garage', (or even from 'new clothes once a decade' to 'new clothes once a year'), don't you.

That's the problem with looking only at money; it's a good measure of all kinds of things, but quality of life isn't one of them. Sure, more money is slightly correlated with a better life, most of the time; but the relationship is far from directly proportional. Gains at the low end are worth far more, in terms of living standard per dollar, than gains at the top end.

Give a Tanzanian peasant farmer an old bicycle worth $10, and it will become his most treasured possession, and will totally change his life.

Give the same $10 old bicycle to an upper middle class American suburbanite, and he will put it straight in the trash.

Consider this:

Two people start a foot race. Bob runs 3 laps in the first ten minutes. Jim runs 1 lap in the first ten minutes. For the next 10 minutes Bob increases his pace 0% while Jim increases his pace 100%. How many laps does Jim make up in the second 10 minutes of the race? (I tried to keep the math easy for the leftists.)

Or, alternatively if you are convinced a person who has gained $5000 has gained more than a person who has gained $250 we can test this directly. You send me $5000 and I'll send you $250 and we'll meet back here to chat about who has gained more.

Your analogy, like the rest of your argument, completely misses the point.

This is not about mathematics; Every dollar buys the same amount of goods, and more dollars buys more goods than do fewer dollars - we agree on that point, and your pointless foot race analogy demonstrates it beautifully, (well done, have a gold star) - but the same dollar value of goods does not lead, in all cases, to the same improvement in living standard.

That you cannot grasp this doesn't surprise me; but it remains true whether or not you can grasp it.

Give a Tanzanian peasant farmer an old bicycle worth $10, and it will become his most treasured possession, and will totally change his life.

Give the same $10 old bicycle to an upper middle class American suburbanite, and he will put it straight in the trash (because finding a buyer for it in suburban America, and shipping it to the buyer once one is found, will likely cost more than it is worth - all the local kids already own better, more valuable, bikes).

It's the SAME bicycle; It's worth exactly the same number of dollars; but the circumstances of the owner determines whether or not their life is improved at all, and if so, how much, by owning it.

Dollars are a very convenient unit of measure for value. They can be used to compare many things that are otherwise difficult to compare. But they still cannot be used to measure everything. Quality of life is one of those things.

Metres are a great unit for measuring length. They are pretty useless for measuring air pressure though. That doesn't render dollars or metres useless; But it does imply that assuming they are always a good unit of measure is going to lead you astray once in a while.

 

[dismal]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

LOL.

You really think that someone whose purchasing power has increased from 'one meal a day' to 'three meals a day' has seen less of a living standard increase than someone who has gone from 'one Ferrari in the garage' to 'three Ferraris in the garage', (or even from 'new clothes once a decade' to 'new clothes once a year'), don't you.

That's the problem with looking only at money; it's a good measure of all kinds of things, but quality of life isn't one of them. Sure, more money is slightly correlated with a better life, most of the time; but the relationship is far from directly proportional. Gains at the low end are worth far more, in terms of living standard per dollar, than gains at the top end.

Give a Tanzanian peasant farmer an old bicycle worth $10, and it will become his most treasured possession, and will totally change his life.

Give the same $10 old bicycle to an upper middle class American suburbanite, and he will put it straight in the trash.

Consider this:

Two people start a foot race. Bob runs 3 laps in the first ten minutes. Jim runs 1 lap in the first ten minutes. For the next 10 minutes Bob increases his pace 0% while Jim increases his pace 100%. How many laps does Jim make up in the second 10 minutes of the race? (I tried to keep the math easy for the leftists.)

Or, alternatively if you are convinced a person who has gained $5000 has gained more than a person who has gained $250 we can test this directly. You send me $5000 and I'll send you $250 and we'll meet back here to chat about who has gained more.

Your analogy, like the rest of your argument, completely misses the point.

This is not about mathematics; Every dollar buys the same amount of goods, and more dollars buys more goods than do fewer dollars - we agree on that point, and your pointless foot race analogy demonstrates it beautifully, (well done, have a gold star) - but the same dollar value of goods does not lead, in all cases, to the same improvement in living standard.

Given the question was about when the Russian economy and US economy would be equal this seems completely irrelevant. At that time they would have the same amount of dollars.

My point was, like in the race example, you don't gain by your improvement percentage. You gain by the absolute amount of ground you cover.

Two gold stars.

 

[bilby]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

LOL.

You really think that someone whose purchasing power has increased from 'one meal a day' to 'three meals a day' has seen less of a living standard increase than someone who has gone from 'one Ferrari in the garage' to 'three Ferraris in the garage', (or even from 'new clothes once a decade' to 'new clothes once a year'), don't you.

That's the problem with looking only at money; it's a good measure of all kinds of things, but quality of life isn't one of them. Sure, more money is slightly correlated with a better life, most of the time; but the relationship is far from directly proportional. Gains at the low end are worth far more, in terms of living standard per dollar, than gains at the top end.

Give a Tanzanian peasant farmer an old bicycle worth $10, and it will become his most treasured possession, and will totally change his life.

Give the same $10 old bicycle to an upper middle class American suburbanite, and he will put it straight in the trash.

Consider this:

Two people start a foot race. Bob runs 3 laps in the first ten minutes. Jim runs 1 lap in the first ten minutes. For the next 10 minutes Bob increases his pace 0% while Jim increases his pace 100%. How many laps does Jim make up in the second 10 minutes of the race? (I tried to keep the math easy for the leftists.)

Or, alternatively if you are convinced a person who has gained $5000 has gained more than a person who has gained $250 we can test this directly. You send me $5000 and I'll send you $250 and we'll meet back here to chat about who has gained more.

Your analogy, like the rest of your argument, completely misses the point.

This is not about mathematics; Every dollar buys the same amount of goods, and more dollars buys more goods than do fewer dollars - we agree on that point, and your pointless foot race analogy demonstrates it beautifully, (well done, have a gold star) - but the same dollar value of goods does not lead, in all cases, to the same improvement in living standard.

Given the question was about when the Russian economy and US economy would be equal this seems completely irrelevant. At that time they would have the same amount of dollars.

My point was, like in the race example, you don't gain by your improvement percentage. You gain by the absolute amount of ground you cover.

Two gold stars.

That's not the question. I agree with you on the first part of this:

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

It is second part; the part in bold; that I am questioning.

Economically, you gain by the amount of ground you cover. Standard of living gains, however, increase by more than that at the low end. They go up by even more than the improvement percentage. Because standard of living, (unlike wealth, income, or GDP per capita), is not measured in dollars.

Your assumption that standard of living increases proportionally (or even close to proportionally) with absolute change in the absolute GDP per capita; or with the absolute dollar wealth of a given individual, is simply wrong.

And that basic error underlies many of the assumptions that lead you (and many others, particularly in the USA) to hold really dumb positions on economics, and as a result to hold really dumb and quite harmful political views too.

 

[fromderinside]

Two gold stars

. That minus the one bibly gave you leaves one from which I subtract another two gold stars for you having given them to yourself. A good example of how one who measures things by his own standards often loses in the eyes of another.

 

[barbos]

I thought we were talking about economic growth which properly measured as percentage growth.
As for living standards, then numbers you provided do not apply because as I have said before you need to look at purchasing parity GDP.

If one has a low enough beginning point one can have greater PP every year and keep falling further and further behind a nation with significantly higher baseline. PP isn't very meaningful except relative to previous suffering. We're talking about growth here not less suffering.

if your percentage growth is constantly higher than some other country than you will overtake them eventually regardless of baseline.
PP GDP is absolutely meaningful, that's why it was invented because nominal GDP was not meaningful.

 

[Derec]

if your percentage growth is constantly higher than some other country than you will overtake them eventually regardless of baseline.

The difficulty is sustaining that constant growth rate.

PP GDP is absolutely meaningful, that's why it was invented because nominal GDP was not meaningful.

Obviously there are shortcomings to the nominal figures. When people talk about poor people in third world countries living on $2 a day or something that is certainly not the same as expecting somebody in the US or Europe to try to do the same. But PPP is an estimate and has its own shortcomings. Local stuff (goods and services) will be cheaper in a poorer country but the quality will often be shoddier and you can't use PPP currency to buy imported goods of course, you have to use real, aka nominal, money. Same goes with travelling abroad - going from a low PPP factor to a high one makes for a very cheap trip, the opposite is cost-prohibitive.

 

[barbos]

The difficulty is sustaining that constant growth rate.

PP GDP is absolutely meaningful, that's why it was invented because nominal GDP was not meaningful.

Obviously there are shortcomings to the nominal figures. When people talk about poor people in third world countries living on $2 a day or something that is certainly not the same as expecting somebody in the US or Europe to try to do the same. But PPP is an estimate and has its own shortcomings. Local stuff (goods and services) will be cheaper in a poorer country but the quality will often be shoddier and you can't use PPP currency to buy imported goods of course, you have to use real, aka nominal, money. Same goes with travelling abroad - going from a low PPP factor to a high one makes for a very cheap trip, the opposite is cost-prohibitive.

PPP takes into accounts all products including the ones which are imported. Once again, purchasing parity was invented because nominal GDP depends on exchange rate and is meaningless because of that. It actually measures amount of stuff produced in the country not amount of stuff multiplied by some arbitrary number called exchange rate. Russian PP GDP is in the range of $20-24k which is half of US but there are a lot of countries in the same range.

 

[Will Wiley]

Food Stamps Still Feed One in Seven Americans Despite Recovery

About 45.4 million Americans, roughly one-seventh of the population, received nutrition aid last October, the most recent month of data. Unemployment was 5 percent that month. The last time joblessness fell to that level, in April 2008, 28 million Americans used food stamps, and the program cost less than half of what the government paid out last year

The uneven recovery has swelled the ranks of long-term unemployed and reduced the number of people working or looking for work, further boosting demand. Even for those with jobs, pay may be lower than in the past: In real dollars, SNAP recipients in 2014 had net incomes of $335 a month, the lowest since at least 1989.

Not sure how we could compare that to Russia.

 

[barbos]

How much of Russia's GDP is tied to oil. Is the decline in oil prices going to hurt the Russian economy?

According to wiki, during high oil/gas prices in 2012 it was 16% of GDP and 52% of federal budget.
Now, it's probably half of that. Basically. Russia lost 10% of GDP because of oil prices crash.
But as you can see federal budget is too dependent on oil/gas. In a long run Russia can survive with low oil/gas prices. Countries like Saudi Arabia, I am not so sure, and russian government critters hope that KSA would realize that too eventually and increase oil prices.

In any case Russian budget was mostly oil money, and US budget is to a significant degree a deficit.
So I have a similar question, where would US be if it had no opportunity to increase its debt?

 

[barbos]

Food Stamps Still Feed One in Seven Americans Despite Recovery

The uneven recovery has swelled the ranks of long-term unemployed and reduced the number of people working or looking for work, further boosting demand. Even for those with jobs, pay may be lower than in the past: In real dollars, SNAP recipients in 2014 had net incomes of $335 a month, the lowest since at least 1989.

Not sure how we could compare that to Russia.

Well, I think bottom 45.4 millions of Russians would probably gladly change places with bottom 45.4 millions of americans.

 

[coloradoatheist]

How much of Russia's GDP is tied to oil. Is the decline in oil prices going to hurt the Russian economy?

According to wiki, during high oil/gas prices in 2012 it was 16% of GDP and 52% of federal budget.
Now, it's probably half of that. Basically. Russia lost 10% of GDP because of oil prices crash.
But as you can see federal budget is too dependent on oil/gas. In a long run Russia can survive with low oil/gas prices. Countries like Saudi Arabia, I am not so sure, and russian government critters hope that KSA would realize that too eventually and increase oil prices.

In any case Russian budget was mostly oil money, and US budget is to a significant degree a deficit.
So I have a similar question, where would US be if it had no opportunity to increase its debt?

If it came to it, the US could find a way to manager it. But oil prices and a natural resource that will run out is important. If you wanted to find a reason why Russia might shoot down a plane and stire up wars, it's the reason.

 

[dismal]

It was you who started talking about growth. I merely pointed out that correct way to talk about it is percentage.

The problem with percentage growth is it can be misleading when the starting point is really low.

absolute numbers are even more misleading than that.

I have no idea what point you are making here.

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

A person whose purchasing power has grown from $10,000 to $15,000 has experienced an increase of $5000 in purchasing power. A person whose purchasing power has grown from $250 to $500 has not experienced as big of an improvement. One can buy $5000 more worth of stuff. The other can buy $250 more worth of stuff.

LOL.

You really think that someone whose purchasing power has increased from 'one meal a day' to 'three meals a day' has seen less of a living standard increase than someone who has gone from 'one Ferrari in the garage' to 'three Ferraris in the garage', (or even from 'new clothes once a decade' to 'new clothes once a year'), don't you.

That's the problem with looking only at money; it's a good measure of all kinds of things, but quality of life isn't one of them. Sure, more money is slightly correlated with a better life, most of the time; but the relationship is far from directly proportional. Gains at the low end are worth far more, in terms of living standard per dollar, than gains at the top end.

Give a Tanzanian peasant farmer an old bicycle worth $10, and it will become his most treasured possession, and will totally change his life.

Give the same $10 old bicycle to an upper middle class American suburbanite, and he will put it straight in the trash.

Consider this:

Two people start a foot race. Bob runs 3 laps in the first ten minutes. Jim runs 1 lap in the first ten minutes. For the next 10 minutes Bob increases his pace 0% while Jim increases his pace 100%. How many laps does Jim make up in the second 10 minutes of the race? (I tried to keep the math easy for the leftists.)

Or, alternatively if you are convinced a person who has gained $5000 has gained more than a person who has gained $250 we can test this directly. You send me $5000 and I'll send you $250 and we'll meet back here to chat about who has gained more.

Your analogy, like the rest of your argument, completely misses the point.

This is not about mathematics; Every dollar buys the same amount of goods, and more dollars buys more goods than do fewer dollars - we agree on that point, and your pointless foot race analogy demonstrates it beautifully, (well done, have a gold star) - but the same dollar value of goods does not lead, in all cases, to the same improvement in living standard.

Given the question was about when the Russian economy and US economy would be equal this seems completely irrelevant. At that time they would have the same amount of dollars.

My point was, like in the race example, you don't gain by your improvement percentage. You gain by the absolute amount of ground you cover.

Two gold stars.

That's not the question. I agree with you on the first part of this:

If I ask "who has a better living standard today" I would look at the absolute number. If I ask "whose living standard has improved the most since 1990" I would look at the absolute change in the absolute number.

It is second part; the part in bold; that I am questioning.

Economically, you gain by the amount of ground you cover. Standard of living gains, however, increase by more than that at the low end. They go up by even more than the improvement percentage. Because standard of living, (unlike wealth, income, or GDP per capita), is not measured in dollars.

Your assumption that standard of living increases proportionally (or even close to proportionally) with absolute change in the absolute GDP per capita; or with the absolute dollar wealth of a given individual, is simply wrong.

And that basic error underlies many of the assumptions that lead you (and many others, particularly in the USA) to hold really dumb positions on economics, and as a result to hold really dumb and quite harmful political views too.

If you try to imagine this is a thread about when Russia and the US will have the same standard of living and the issue that vexes you so should just evaporate.

 

[barbos]

If it came to it, the US could find a way to manager it.

Same with Russia.

But oil prices and a natural resource that will run out is important.

Are you implying that debt can grow forever?

If you wanted to find a reason why Russia might shoot down a plane and stire up wars, it's the reason.

I am not following you here.

- - - Updated - - -

If you try to imagine this is a thread about when Russia and the US will have the same standard of living and the issue that vexes you so should just evaporate.

Again, it was you who started it. I merely corrected you.