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Thread: GDP Contracted at 1% Pace in First Quarter

  1. #111
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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by mmi View Post
    And nearly doubled the per capita national debt.

    Attachment 67167359

    >>doubled the GDP

    Real GDP:

    1980 — 6.49 trillion
    1988 — 8.60 trillion

    A 32.5% increase.

    >>increased FIT revenue by 60%.

    A big increase in Social Security taxes played a large role in generating that additional revenue.

    In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees. — Taxes: What people forget about Reagan," CNNMoney, Sept 12, 2010

    >>It also created a peace dividend that was wasted

    Yeah, wasted when Chaingang and associates ignored the clear warnings of an imminent Al Qaeda attack inside the US, and then spun their lies to get us to invade Iraq.

    >>facts never were much of a friend to you

    I always get a laugh out of yer arrogant ignorance.

    >>someone who probably hadn't been born yet

    http://www.debatepolitics.com/breaki...post1063275988

    >>you buy what the left tells you. one of these days you will outgrow that

    Sadly, it looks like you'll never outgrow yer … disorder.
    Love it, 1.7 trillion in debt is much much worse than the 6.8 trillion Obama has added because it is a smaller percentage. I keep hearing about the percentage change in debt but not the percentage change in GDP, or the percentage change in tax revenue, or the percentage of GDP that debt represents. Either learn how to use the quotes or I will no longer post to you. Final warning.

    By the way, "real" GDP? LOL, The GDP growth was in 80 dollars not 2005 dollars
    Last edited by Conservative; 05-31-14 at 06:22 PM.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by Conservative View Post
    By the way, "real" GDP?
    Real GDP means GDP in constant dollars or after-inflation GDP. Nominal GDP means GDP in current dollars or unadjusted for inflation.

    Economists focus on real GDP (and the 1% annualized contraction for Q1 concerns real GDP), because that measure deals strictly with economic growth. Nominal GDP includes inflation. Hence, the economy might experience no growth whatsoever, but inflation would lead to a higher nominal GDP figure creating the perception of economic growth when none actually occurred.

  3. #113
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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by donsutherland1 View Post
    Real GDP means GDP in constant dollars or after-inflation GDP. Nominal GDP means GDP in current dollars or unadjusted for inflation.

    Economists focus on real GDP (and the 1% annualized contraction for Q1 concerns real GDP), because that measure deals strictly with economic growth. Nominal GDP includes inflation. Hence, the economy might experience no growth whatsoever, but inflation would lead to a higher nominal GDP figure creating the perception of economic growth when none actually occurred.
    Great, the problem is Govt revenue, debt, and components of GDP at the time aren't generated in inflation adjusted dollars. Reagan had a GDP growth that doubled in nominal dollars and the revenue generated was in nominal dollars.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by Conservative View Post
    Great, the problem is Govt revenue, debt, and components of GDP at the time aren't generated in inflation adjusted dollars. Reagan had a GDP growth that doubled in nominal dollars and the revenue generated was in nominal dollars.
    I was providing a technical point regarding the "real GDP" term. One can get data concerning revenue and expenditures in constant and current dollars and as a percent of GDP at: http://www.whitehouse.gov/sites/defa...s/hist01z3.xls

    My personal opinion is that President Reagan was a superb leader. While he came to Washington expecting to cut the nation's deficits, seek to revive its economy, and bolster its military capabilities (to press the USSR), he quickly realized that he could not accomplish all three simultaneously. Deficits would be increased by cutting taxes (which would shift the supply curve to the right and complement the Fed's battle on inflation) and by raising military expenditures. He prioritized and chose economic revival and increased defense expenditures at the expense of deficit reduction. He also made tax-related concessions in helping extend the solvency of Social Security. He was a leader who saw the big picture, understood the need to work with Republicans and Democrats, and knew how to bring people together toward common goals (even as they disagreed on many issues). He was also willing to revise his approaches e.g., the Social Security plan had a revenue component to it. His shift from confrontation to engagement with the Soviet Union was a pivotal shift and he made it in the face of stiff opposition among many of his senior officials.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by 99percenter View Post
    Double digit interest rates? lol. I thought conservatives loved high interested rates.
    They don't. They dislike inflation, but many also want low interest rates. Go figure.

    During Carter's term, inflation was very high, and the only real remedy was to jack up interest rates; so, Carter brought in Paul Volcker, who began a very unpopular policy of doing just that. Reagan kept Volcker on (Fed chairmen rarely change when the President leaves office), and disliked Volcker's policy since in the short term it did make economic conditions a bit worse -- remember, Reagan was dealing with a recession for about 2 years. Fortunately, the Fed policy took hold, inflation was brought under control, and the economy started getting back on track.

    Later, it was the arch-conservative Alan Greenspan who kept interest rates low year after year, much to the delight of corporate American and Wall Street -- who pitched major fits every time anyone in the Fed did so much as hinted that interest rates might go up.

    Now, I will say that conservatives do want certain forms of fiscal restraint. But what we usually see when they are in the Presidency is that they cut taxes and sometimes spending, which often results in higher deficits. Bush 43 was particularly egregious in that he started two very expensive wars (which he intentionally kept out of the federal budget figures), cut taxes during wartime (which, frankly, is kind of insane), threw insane amounts of money at Homeland Security, and created a whole new entitlement to boot (Medicare Part D). At the end of his term, due only partly to his own policies, the US got whacked with the worst economic downturn in about 80 years, which of course sapped tax revenues. So we should keep in mind that Bush 43 saddled Obama with a lot of costs that he couldn't stop right away and tax cuts he couldn't change until after his 1st term.

    I'd also say that I'm not really clear if they want small government to cut government spending, or if they want to cut spending in an attempt to hobble government's capabilities. It could be a bit of both, but I for one lean more towards the latter.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by donsutherland1 View Post
    I was providing a technical point regarding the "real GDP" term. One can get data concerning revenue and expenditures in constant and current dollars and as a percent of GDP at: http://www.whitehouse.gov/sites/defa...s/hist01z3.xls

    My personal opinion is that President Reagan was a superb leader. While he came to Washington expecting to cut the nation's deficits, seek to revive its economy, and bolster its military capabilities (to press the USSR), he quickly realized that he could not accomplish all three simultaneously. Deficits would be increased by cutting taxes (which would shift the supply curve to the right and complement the Fed's battle on inflation) and by raising military expenditures. He prioritized and chose economic revival and increased defense expenditures at the expense of deficit reduction. He also made tax-related concessions in helping extend the solvency of Social Security. He was a leader who saw the big picture, understood the need to work with Republicans and Democrats, and knew how to bring people together toward common goals (even as they disagreed on many issues). He was also willing to revise his approaches e.g., the Social Security plan had a revenue component to it. His shift from confrontation to engagement with the Soviet Union was a pivotal shift and he made it in the face of stiff opposition among many of his senior officials.
    You and I are in agreement about Reagan's leadership skills and ability to get things done through Congress. We disagree however that cutting taxes caused the deficits as no one can prove that we would have generated 17 million new jobs and thus new taxpayers without the tax cuts. Human behavior is a foreign concept for far too many just like their lack of knowledge as to the components of GDP.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by Conservative View Post
    You and I are in agreement about Reagan's leadership skills and ability to get things done through Congress. We disagree however that cutting taxes caused the deficits as no one can prove that we would have generated 17 million new jobs and thus new taxpayers without the tax cuts. Human behavior is a foreign concept for far too many just like their lack of knowledge as to the components of GDP.
    Clearly, there are behavioral (second and third-order impacts) from tax policy changes. Those effects are highly complex and there is a lot of uncertainty. Hence, they are not well-modeled.

    For that reason, the Congressional Budget Office (CBO) uses a static baseline. According to that baseline, tax revenue was lower than it would otherwise have been.

    At the same time, there are hints that there had, in fact, been some behavior effect. First, tax revenue proved higher than had otherwise been projected. Second, if one used a “quick and dirty approach” and estimated tax revenue based on GDP trend growth (the Reagan period saw above trend growth) and the average tax revenue as a share of GDP, there was a gap. However, the faster growth or growth premium helped mitigate the gap that would have existed had GDP expanded at trend rate. Some economists suggest that a persistent growth premium (over the trend line) would, over a period of time, lead to tax revenue being at least as high as it would have otherwise been absent tax rate reductions.

    In any case, those are highly technical and much debated matters. There is some behavioral impact, but it can’t be estimated precisely.

    In the end, Reagan was satisfied that he had gotten most of what he set out to achieve in Washington. He had reduced tax rates, including the highest marginal rate. He had presided during a robust economic revival. He was able to strengthen the nation’s defenses and believed that had played a role in making possible renewed engagement with the Soviet Union. He was disappointed that he could not contain growth in other spending.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by donsutherland1 View Post
    Clearly, there are behavioral (second and third-order impacts) from tax policy changes. Those effects are highly complex and there is a lot of uncertainty. Hence, they are not well-modeled.

    For that reason, the Congressional Budget Office (CBO) uses a static baseline. According to that baseline, tax revenue was lower than it would otherwise have been.

    At the same time, there are hints that there had, in fact, been some behavior effect. First, tax revenue proved higher than had otherwise been projected. Second, if one used a “quick and dirty approach” and estimated tax revenue based on GDP trend growth (the Reagan period saw above trend growth) and the average tax revenue as a share of GDP, there was a gap. However, the faster growth or growth premium helped mitigate the gap that would have existed had GDP expanded at trend rate. Some economists suggest that a persistent growth premium (over the trend line) would, over a period of time, lead to tax revenue being at least as high as it would have otherwise been absent tax rate reductions.

    In any case, those are highly technical and much debated matters. There is some behavioral impact, but it can’t be estimated precisely.

    In the end, Reagan was satisfied that he had gotten most of what he set out to achieve in Washington. He had reduced tax rates, including the highest marginal rate. He had presided during a robust economic revival. He was able to strengthen the nation’s defenses and believed that had played a role in making possible renewed engagement with the Soviet Union. He was disappointed that he could not contain growth in other spending.
    Although CBO is non partisan they base their projections on assumptions many of which are given to them by Congress. CBO projections are notoriously inaccurate due to assumptions they are given. They are given way too much credit which is why I use actual data and know that the 17 million jobs created generated more tax revenue. No CBO projection ever came close to the 17 million jobs created and where human behavior comes in is what those people did with their money. The GDP is 2/3 consumer spending or activity and that is why putting more money into the pockets of the consumer is so necessary to our economy.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by mmi View Post
    ...
    Was this a business cycle recession?
    HA! I knew it. You folks are nothing if not predictable.
    The recession ended in 2009 ... along with any hope for the Country. There's no excuse for what he's done to us.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by jmotivator View Post
    U.S. GDP Contracted at 1% Pace in First Quarter - WSJ.com

    "he U.S. economy contracted in the first quarter of 2014, the latest stumble for a recovery that has struggled to find its footing since the recession ended almost five years ago."

    The "recovery" is over.


    I think you might just be reading the data incorrectly. The appearance of economic contraction is just the economy taking a huge breath before it enters {TURNM ON THE REVERB} "Summer of Recovery V". Or is it "VI"?

    I'm considering quitting my job in preparation for all of the new opportunities that will be springing up as a result of the ongoing success of the Presidents Jobs Plan.

    He's been focused on this like a laser since before the immacualtion. How much longer could it take?
    I am not of the mind that a man is either of science or of religion. At his best and his worst, man exists in the misty glimmering where the falling angel meets the rising ape. That he chooses a direction from that point defines him as human.

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