Comments on: The “GDP Fraud” http://dailyreckoning.com/the-gdp-fraud/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Fri, 10 Feb 2012 17:22:41 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: pete http://dailyreckoning.com/the-gdp-fraud/#comment-37765 pete Mon, 09 Nov 2009 09:34:39 +0000 http://dailyreckoning.com/?p=19719#comment-37765 It is a fact that accounting can easily hide the real state of any business and so it is with any country - the problem is that nowhere can one seriously believe that creating additional debt will solve any problems, unless one intends intentionally to renage on the debt - does that thought worry anyone out there? How does one create something out of nothing? - by fiddling the books? Naturally this is the new way! Who are we kidding? It is a fact that accounting can easily hide the real state of any business and so it is with any country – the problem is that nowhere can one seriously believe that creating additional debt will solve any problems, unless one intends intentionally to renage on the debt – does that thought worry anyone out there?

How does one create something out of nothing? – by fiddling the books?

Naturally this is the new way!

Who are we kidding?

]]> By: JG http://dailyreckoning.com/the-gdp-fraud/#comment-36707 JG Tue, 03 Nov 2009 00:51:07 +0000 http://dailyreckoning.com/?p=19719#comment-36707 GDP is so fundamentally a fraud by it's core definition that it's mind boggling that it's even used. Essentially take the national equivalent of a business' financial cash flow statement, then for every cash flow type take the absolute value, and then sum all the values. It's no wonder you can have "good economic growth" without actually creating anything or any actual productivity. It's mathematically nonsensical to its core. Mind you GNP is only slightly less insane. And what is the excuse for hand-waving GDP? We don't know how to measure anything else and/or it's too complicated (undemocratic?) to label specific cash flows as positive or negative, and we can presume that any cash flow contribute perfectly equivalent value. All of these are nonsense - if a nation has the value of self-preservation, dedication to its citizens and general sustainability, it is simple enough to allocate some flows as positive or negative in terms of national worth and value. We can't seem to do that so we just "look under the streetlight where the light is better" rather than where the value really is. GDP is so fundamentally a fraud by it’s core definition that it’s mind boggling that it’s even used.

Essentially take the national equivalent of a business’ financial cash flow statement, then for every cash flow type take the absolute value, and then sum all the values. It’s no wonder you can have “good economic growth” without actually creating anything or any actual productivity. It’s mathematically nonsensical to its core. Mind you GNP is only slightly less insane.

And what is the excuse for hand-waving GDP? We don’t know how to measure anything else and/or it’s too complicated (undemocratic?) to label specific cash flows as positive or negative, and we can presume that any cash flow contribute perfectly equivalent value. All of these are nonsense – if a nation has the value of self-preservation, dedication to its citizens and general sustainability, it is simple enough to allocate some flows as positive or negative in terms of national worth and value. We can’t seem to do that so we just “look under the streetlight where the light is better” rather than where the value really is.

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