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U.S. Economy Grew Less-Than-Forecast 1.2% in Second Quarter

fmw said:
Because somebody decided to include government in GNP and call it GDP?
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Government expenditures are a part of the aggregate economy. If we were to reduce government spending, enough to bring the deficit to zero, it would negatively impact both consumption and investment. People like to look at the identities as though they are isolated from each other. In reality, when consumption falls, so will investment and imports. When investment declines, so will consumption, imports, and exports.

To believe we can begin to understand growth by observing accounting identities is extremely naive.
 
Kushinator said:
Government expenditures are a part of the aggregate economy. If we were to reduce government spending, enough to bring the deficit to zero, it would negatively impact both consumption and investment. People like to look at the identities as though they are isolated from each other. In reality, when consumption falls, so will investment and imports. When investment declines, so will consumption, imports, and exports.

To believe we can begin to understand growth by observing accounting identities is extremely naive.
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Not nearly as naive as failing to understand that the government doesn't create wealth. It spends it.
 
fmw said:
Not nearly as naive as failing to understand that the government doesn't create wealth. It spends it.
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I never said the government creates wealth. It spends tax proceeds (and then some) back into the aggregate economy, which increases both consumption and investment. You can't cut government spending, especially when the economy is growing at around 2% and expect anything other than recession. This is simply a matter of fact.
 
Kushinator said:
I never said the government creates wealth. It spends tax proceeds (and then some) back into the aggregate economy, which increases both consumption and investment. You can't cut government spending, especially when the economy is growing at around 2% and expect anything other than recession. This is simply a matter of fact.
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It is a matter of opinion. Government spending never slows. You have no basis for comparison.
 
fmw said:
It is a matter of opinion. Government spending never slows. You have no basis for comparison.
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It isn't a matter of opinion. Your entire anti-government point is your opinion; you haven't offered a single bit of factual support for it.
 
Kushinator said:
It isn't a matter of opinion. Your entire anti-government point is your opinion; you haven't offered a single bit of factual support for it.
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Then we are even. We have two competing opinions.
 
fmw said:
Then we are even. We have two competing opinions.
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I am not stating an opinion. When government spending makes up more than the rate of economic growth, you cannot expect to cut the deficit without cutting overall growth.

There is no opinion here, simply a matter of fact.
 
Kushinator said:
I am not stating an opinion. When government spending makes up more than the rate of economic growth, you cannot expect to cut the deficit without cutting overall growth.

There is no opinion here, simply a matter of fact.
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So we disagree on facts.
 
Kushinator said:
You disagree with facts. That's your problem.
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No it is your problem. There hasn't been a period of reduced government spending since 1859. You have no basis for your opinion let alone facts. You are guessing that reduced government spending would hurt the economy. I'm guessing it would help the economy. There are no facts, only opinions.
 
fmw said:
No it is your problem. There hasn't been a period of reduced government spending since 1859. You have no basis for your opinion let alone facts. You are guessing that reduced government spending would hurt the economy. I'm guessing it would help the economy. There are no facts, only opinions.
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The facts are: if 2.5% of the economy comes from deficit spending, and you remove it, the private sector is going to have to come up with 2.5% more production to offshoot the loss. You are arguing that the private sector would produce more if there was less overall spending in the economy. Why isn't the private sector producing 2.5% more? Your claim is that the government is paying them not to, you just are not aware.

This is nonsense. You simply disagree with basic arithmetic on the basis of partisan ignorance.
 
Kushinator said:
Half of all businesses fail by year 5, and 2/3 fail by year 10. Why? Because half/two-thirds of small business owners are likely financially illiterate. So no... they really don't have a good idea on their own.
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That's true. but most economists are only giving macro info and that doesn't mean a lot to most small businesses.
 
Kushinator said:
The facts are: if 2.5% of the economy comes from deficit spending, and you remove it, the private sector is going to have to come up with 2.5% more production to offshoot the loss. You are arguing that the private sector would produce more if there was less overall spending in the economy. Why isn't the private sector producing 2.5% more? Your claim is that the government is paying them not to, you just are not aware.

This is nonsense. You simply disagree with basic arithmetic on the basis of partisan ignorance.
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I am neither a partisan nor ignorant. Less government leaves more wealth in the hands of those that can create more wealth or cause more wealth to be created. Yes, of course, the private sector can better contribute to the economy with less government. You simply disagree with the obvious on the basis of partisan ignorance.
 
fmw said:
I am neither a partisan nor ignorant.
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I disagree.

Less government leaves more wealth in the hands of those that can create more wealth or cause more wealth to be created. Yes, of course, the private sector can better contribute to the economy with less government. You simply disagree with the obvious on the basis of partisan ignorance.
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You have a piss poor understanding of macroeconomics, and finance in general; which is why you have come to these conclusions. The argument you are trying to put forth is that government spending is crowding out private investment, but you have no proof of this actually occurring. On the contrary, there are multiple instances where government spending actually crowds in private investment, e.g. defense contracts, SNAP disbursements, infrastructure grants, etc....

Bumper-sticker economic policy won't cut it!
 
Kushinator said:
I disagree.



You have a piss poor understanding of macroeconomics, and finance in general; which is why you have come to these conclusions. The argument you are trying to put forth is that government spending is crowding out private investment, but you have no proof of this actually occurring. On the contrary, there are multiple instances where government spending actually crowds in private investment, e.g. defense contracts, SNAP disbursements, infrastructure grants, etc....

Bumper-sticker economic policy won't cut it!
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Neither will yours. That money is nothing more than a transfer of tax revenue and debt from the private sector back to the private sector. No wealth was generated whereas some might have been generated without the government as a middle man. Economics is a social science made up of theories and opinions. You accept one opinion. I accept another. Sorry.
 
fmw said:
Neither will yours. That money is nothing more than a transfer of tax revenue and debt from the private sector back to the private sector. No wealth was generated whereas some might have been generated without the government as a middle man.
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The deficit is funding that would not had entered into the aggregate economy, had it not been borrowed from the sidelines. If there is an instance of crowding out, we will be able to observe it through analysis of interest rates. There is no debating this fact.
 
fmw said:
Neither will yours. That money is nothing more than a transfer of tax revenue and debt from the private sector back to the private sector. No wealth was generated whereas some might have been generated without the government as a middle man. Economics is a social science made up of theories and opinions. You accept one opinion. I accept another. Sorry.
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Humans were less productive before they formed societies.

But we only have several thousand years of unanimous empirical evidence to back that narrative, so go ahead and strain for your desired conclusion that government "middle men" magically impede productivity.
 
Absentglare said:
Humans were less productive before they formed societies.

But we only have several thousand years of unanimous empirical evidence to back that narrative, so go ahead and strain for your desired conclusion that government "middle men" magically impede productivity.
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I refer to the amount of middle man, not the existence of it. Nobody said anything about anarchy or tribalism. You are drawing conclusions from what you say, not from what I say.
 
Kushinator said:
The deficit is funding that would not had entered into the aggregate economy, had it not been borrowed from the sidelines. If there is an instance of crowding out, we will be able to observe it through analysis of interest rates. There is no debating this fact.
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Not with your economic beliefs.
 
fmw said:
Not with your economic beliefs.
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You do not believe that if money that had not been spent, enters the economy, it doesn't result in a larger economy sans injection. You don't debate, you obfuscate.
 
Kushinator said:
You do not believe that if money that had not been spent, enters the economy, it doesn't result in a larger economy sans injection. You don't debate, you obfuscate.
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To me it depends on who spends the money and where it comes from. I prefer to think of spending wealth with money simply acting a measure for keeping score. If government spends money it is robbing Peter to Pay Paul. Peter had some wealth that the government transferred to Paul. Whatever expenses were involved the transfer is just a loss. If the government prints money without having wealth to back it up, that leads to inflation. Prices today are more than 10 times greater than what they were half a century ago. 1000%. Meaningless? Not to me.

If the government borrows the money, then it robs the future to pay Paul. The private sector creates all the wealth. The government creates all the money. I think that is a problem personally. These opinions of mine at least address common sense in my view. I realize there isn't much common sense in current American society.
 
fmw said:
I refer to the amount of middle man, not the existence of it. Nobody said anything about anarchy or tribalism. You are drawing conclusions from what you say, not from what I say.
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Government programs are often more efficient, in terms of the quantity and expense of middle men, than the private sector. The Waltons alone represent $37 billion of private sector waste.
 
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