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Aircraft Carriers Now To Be Classed As "investments" For Gdp!

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http://www.bbc.co.uk/news/blogs-magazine-monitor-28679674

There are big changes coming to the national accounts next month, writes Anthony Reuben.

I've already written about how illegal drugs and prostitution are going to be included in the calculation of gross domestic product (GDP), which is the measure of all the goods and services produced by an economy.

Another of the changes is to the treatment of "military weapons of destruction and the equipment needed to deliver them".

In the past, government spending on weapons was considered to be just consumption by governments - from next month some of it will count as an investment.

That increased government investment in things like ships, aircraft and tanks will add £3.5bn to GDP for 2009, which is the most recent year for which we have been given figures so far.

The thing is, some of these weapons are very expensive. The recently named HMS Queen Elizabeth aircraft carrier is expected to cost about £6.2bn.

Clearly, we hope this doesn't happen, but if, in some future conflict, it were to be sunk, would that knock 1.6% off that quarter's GDP?

Not necessarily, according to the specialists at the Office for National Statistics (ONS).

Remember, counting weapons as government investments is new stuff to the statisticians - they released a report on how they planned to treat them.

If the ship were to be sold then they would take account of that straight away. But at the moment, the model does not take account of catastrophic losses, so the ship would continue to be written off gradually over its theoretical 20-year lifespan.

But they say that if the loss were really big (like the loss of an aircraft carrier) they might have to adjust the model to take that into account, which would mean there would be a big hit to GDP.

It's an excellent example of how the thinking about GDP is developing to embrace the changes.

In the first world war the dreadnoughts where never really sent to sea apart from Jutland as neither side could afford to risk losing them as it would possible mean the loss of the war.

So an aircraft carrier is now a fecking investment!!! I'd love to know how it's going to add to our productivity!!

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If a British aircraft carrier is sunk I doubt any of us would be terribly concerned about the tediously dull method of accounting for its loss. We'd most likely have rather more pressing concerns.

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I think denninger or mish was blogging on the similar gdp 'enhancements' in the US...noting stuff like this is already counted as production, and the new method basically double counts a shed load of stuff.

Seems the new normal, just invent growth now lying about inflation has gone about as far as it can.

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not forgetting that each and every spend leading up to the final "product", including the sale of treasuries to the Banks to pay for the thing, are all added to the GDP

Triple accounting all round.

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The concept of 'GDP' is just an utter, utter nonsense and I can't quite believe why it's given the level of importance it is, considering;

1) No 2 countries measure GDP in the same way, rendering it useless as a comparative tool

2) Stuff is randomly added, rendering it useless when using it when comparing GDP to previous periods

3) A significant wedge (over 10%) of GDP is nothing but the mirage that is 'Imputed Rent' (how much a houseowner would pay to rent their home in some strange parallel universe - B) :lol:WTF??!!)... This figure is being completely abused and has risen from 6% in 2007

4) £5 billion added for prostitution. :D (Presumably then, there should be 'imputed prostitution' every time someone masturbates?)

Feel free to 'ONS' this list (add anything you feel like to it)

Considering the level of manipulation available, I wonder how it's ever possible to enter a recession.

Edited by Reck B

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Don't see what the problem with this is.

If you look at it from the perspective that an aircraft carrier is essential for the country to continue business, then surely it should be accounted for in the same way as any business asset.

Plus the fact military hardware is often sold off. If you don't account for it in the first place where does the revenue come from, out of the sky ? For examples in aircraft carriers look at HMS Hermes.

Pointless mouth foaming.

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The concept of 'GDP' is just an utter, utter nonsense and I can't quite believe why it's given the level of importance it is, considering;

1) No 2 countries measure GDP in the same way, rendering it useless as a comparative tool

2) Stuff is randomly added, rendering it useless when using it when comparing GDP to previous periods

3) A significant wedge (over 10%) of GDP is nothing but the mirage that is 'Imputed Rent' (how much a houseowner would pay to rent their home in some strange parallel universe - B) :lol:WTF??!!)... This figure is being completely abused and has risen from 6% in 2007

4) £5 billion added for prostitution. :D (Presumably then, there should be 'imputed prostitution' every time someone masturbates?)

Feel free to 'ONS' this list (add anything you feel like to it)

Considering the level of manipulation available, I wonder how it's ever possible to enter a recession.

Since the latest economic calamity and now that they've revealed their latest extremes for manipulating the GDP figure which is now apparently the sole gauge to measure recovery then perhaps there won't be another statistical recession.

Of course if recovery continues to be measured using the GDP as currently formulated then the real UK economy will continue to progress further and further downhill and well beyond the current level of devastation even if there's no statistical recession.

Also if the UK never had a recession then there wouldn't be an excuse to give the bankers bailout money funded by the taxpayer so maybe the current GDP as it is will in time be changed so that excuse will still be available to them.

Edited by billybong

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4) £5 billion added for prostitution. :D (Presumably then, there should be 'imputed prostitution' every time someone masturbates?)

:):)

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Don't see what the problem with this is.

If you look at it from the perspective that an aircraft carrier is essential for the country to continue business, then surely it should be accounted for in the same way as any business asset.

Plus the fact military hardware is often sold off. If you don't account for it in the first place where does the revenue come from, out of the sky ? For examples in aircraft carriers look at HMS Hermes.

Pointless mouth foaming.

because, assets appear on a balance sheet, not a Profit and Loss.

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How the Royal Navy is all at sea over an appeal to ancient mariners to crew its new £6.2 billion aircraft carriers 

3D19AAB800000578-0-image-m-60_1486862686

Britain's two new £6.2 billion aircraft carriers are suffering from a manpower crisis because the Navy lacks enough sailors to crew the vessels - so they're recruiting ex-sailors aged 60 and above.

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1 hour ago, interestrateripoff said:

How the Royal Navy is all at sea over an appeal to ancient mariners to crew its new £6.2 billion aircraft carriers 

3D19AAB800000578-0-image-m-60_1486862686

Britain's two new £6.2 billion aircraft carriers are suffering from a manpower crisis because the Navy lacks enough sailors to crew the vessels - so they're recruiting ex-sailors aged 60 and above.

Mr Mannering ...

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I'm surprised they haven't added the weather to GDP.

When it rains - it's free stuff into our reservoirs.

Also how much sunshine - that could be converted to solar energy. Etc.

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On 8/13/2014 at 10:26 AM, Reck B said:

4) £5 billion added for prostitution. :D (Presumably then, there should be 'imputed prostitution' every time someone masturbates?)

 

Stroke of genius. That could double our GDP. 

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Don't forget that every time an oil tanker runs aground the resultant clean up all adds to our GDP... We should all do like the wreckers of the olden days and lure them onto our coastline.

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20 hours ago, interestrateripoff said:

How the Royal Navy is all at sea over an appeal to ancient mariners to crew its new £6.2 billion aircraft carriers 

3D19AAB800000578-0-image-m-60_1486862686

Britain's two new £6.2 billion aircraft carriers are suffering from a manpower crisis because the Navy lacks enough sailors to crew the vessels - so they're recruiting ex-sailors aged 60 and above.

Not to many old school stokers will be qualifying though. A career being ankle deep in diesel and bilge and the associated fumes doesn't carry over into a healthy retirement.

Many I know are already having serious health issues in their 40's and 50's.

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All smells of WWII style enemy-focused propaganda to me.

"Oh look how weak we are! We've only got spud guns and sucker-tipped children's toy bow and arrows".

Come in close and then BAM! "Well, we found a couple of hundred Exocet missiles at the back of the shed last week".

If government truly controls meaningful media output, then the kind of stories are obvious bait.

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