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Gdp And Govt Debt

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(someone touched on this in a thread yesterday)

Is govt debt taken out of GDP calcs?

If the govt borrow (from the future) and spend 20% of GDP and we see a GDP gain of 0.5%,

is it a real gain of 0.5% or a decrease of 19.5% or somewhere in between?

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.... to follow on from my own post.

Taking the car scheme as an example:

Car costs 10k. Normally someone buys the car and GDP increases by 10k,

but if the person only pays 8k and the govt take on debt to pay the other 2k,

how is this counted in the GDP?

If it's still 10k, then it's so easy to manipulate and 'growth at any cost' really is

just that!!!

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The govt only pays £1k. And if they get the VAT on the car straight back. On an £8k car, that's £1200!

The manufacturer has to offer the other £1k.

Edited to add: I've picked £8k as an average. I've ordered a car under scrappage thats £5k INCLUDING VAT so not so much from me. ;)

Edited by deflation

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The govt only pays £1k. And if they get the VAT on the car straight back. On an £8k car, that's £1200!

The manufacturer has to offer the other £1k.

Edited to add: I've picked £8k as an average. I've ordered a car under scrappage thats £5k INCLUDING VAT so not so much from me. ;)

Ok, I thought it was 2k + 2k, but was just an example.

I was really wondering if Govt Debt was taken out in GDP calc? Otherwise they'll be

shouting loud about GDP growth when it's just future tax take borrowed in advance?

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http://en.wikipedia.org/wiki/Gross_domestic_product

The most common approach to measuring and quantifying GDP is the expenditure method:

GDP = private consumption + gross investment + government spending + (exports − imports), or,

GDP = C + I + G + (X − M).

So it look like it is in the GDP calculations. This would make sense as else GDP would show a shocking drop.

Also :- http://www.marketoracle.co.uk/Article12444.html from one of the comments.....

GDP Manipulation

The primary manipulation of the GDP statistic comes from manipulation of the INFLATION statistic.

According to http://www.shadowstats.com/ the actual inflation rate is closer to 3% instead of the 'officially' reported -1%.

Using the 3% inflation rate would result in a GDP calculation for the recent quarter of MINUS 5% !

They are reporting about the GDP of America, but they all use the same tricks!

It seems GDP is not very reliable because it can be manipulated in so many ways, and is in fact being manipulated so much that it is nothing more than a lie.

Ho hum!

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(someone touched on this in a thread yesterday)

Is govt debt taken out of GDP calcs?

If the govt borrow (from the future) and spend 20% of GDP and we see a GDP gain of 0.5%,

is it a real gain of 0.5% or a decrease of 19.5% or somewhere in between?

I wouldn't let it trouble you. A nuclear accident involing the deaths of thousands of people, large scale decontamination and waste disposal would boost GDP.

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So GDP calcs are total rubbish.

All we'll here for next 6 months, is how Brown has got us out of recession, but in fact he's borrowed

and spent to skew the numbers.

Not only is the GDP falling very quick, but future growth is also destroyed as we'll need to pay back

the money wasted by their short term policies. Idiots.

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Not only is the GDP falling very quick, but future growth is also destroyed as we'll need to pay back

the money wasted in years of unsustainable spending that started in about 2002. Idiots.

There. Fixed it for you.

See e.g. http://www.economicshelp.org/blog/uk-econo...k-national-debt for the data. If you don't want to take my word for it, Mervyn King also described government spending before the crunch as unsustainable (e.g. http://news.sky.com/skynews/Home/Business/...00906415317485).

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So GDP calcs are total rubbish.

All we'll here for next 6 months, is how Brown has got us out of recession, but in fact he's borrowed

and spent to skew the numbers.

Not only is the GDP falling very quick, but future growth is also destroyed as we'll need to pay back

the money wasted by their short term policies. Idiots.

Brownhole has been playing this game form the start - theft from pensions all the way through to stealth taxation with increased public and government debt all the way. All the time propped up by a bent central bank ignoring the reality of the inflationary situation and rapidly growing dysfunctional economics of the situation.

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