Goldman Sachs predicts U.S. economy will grow 8% this year

[FairAndUnbiased]

current stock exchanges do not account for GDP. otherwise americas GDP would be higher than $50 trillion

"Other things not included in the GDP are government social security and welfare payments, current exchanges in stock and bonds, and changes in the values of financial assets"

EconPort - What is Counted in GDP?

www.econport.org

However stock dividends and debt interest from stock market activity involving debt are part of GDP.

So is corporate spending with money derived from capital gains.

 

[Mk-313]

However stock dividends and debt interest from stock market activity involving debt are part of GDP.

So is corporate spending with money derived from capital gains.

well now ur confusing the two. there are 2 approaches to calculate GDP. the expenditure approach and the income approach. we use expenditure approach which is rGDP = (C + I + G + Xn) in which dividends are not counted.

in income approach you count the interest. but there are statistical discrepancies and also fallacies. also in income approach ur GDP is higher than what is orignally is and so that also must be balances out

we look at it this way. if you received dividend and you stashed away in ur house in lieu of spending it then that capital is not productive . but if u spend it to icnrease ur productivity that capital is productive. but in income approach that capital that is stashed under should be counted as productive.

Also corporate spending and capital gains are 2 different things. the money from capital gains goes to the investor not the corporate to spend

 

[Yongpeng Sun-Tastaufen]

Due to American innovation and the healthy demographics of the country, if the US can sustain itself through reinvestment in making itself more competitive, it will be able to defeat China in a generation or so; 2050-2060. Demographics have decimated Japan’s competitiveness and it looks to be what could do in China by 2050-2060. America can outcompete China, as it outcompeted (through all its ways) Japan and the Soviets in the 20th century, if it invests in making middle class life sustainable.

The $300 a month for each child in the US, is a great experiment in a way. Put money in the hands of families will immediately circulate in the economy (which multiplies the impact on the economy an approx. 6 fold when fully circulated; its called the “velocity of money”). The experiment is to see if cash infusions bring back towns. If the money doesn’t help then you know that town or region won’t really get the best ROI through infrastructure as another town.

Besides infrastructure, will have to be some level of consolidation (out of dying towns (where it is more expensive to provide services) and into more sustainable towns) and modernization of “Prospect cities”, and connecting them through frequent high speed commuter rail (as in the New York or Boston suburbs).

The key will be to make sure, the gap in services between rich towns and poor towns is nit too wide, otherwise private sector investment won’t come.

Prospect Cities; what China would call second or third tier cities.

Decaying Midwest towns

The current contrast between the middle of Long Island NY (where a lot of the ethnic minority middle class live) and the South Shore (where a lot of the upper middle class of NYC live). A video from this past weekend.

Hear what matters, direct from the mouths of People in a small town in Mingo County WV

The US has a young vibrant population. All the immigrants from poor countries are in young age, and have high birth rate. White population however is on decline and aging.

 

[FuturePAF]

Developed economies cap out at 3% max. with ideal at 1-2% anything above 3% is considered overheating. right now we do see 8% to partially account for reopening of Co-VID

2- America is free enterprise. govt doesnt step in unless things get out of hands

3- zombie companies dont live off loan. what they do is just make enough money to pay interest on their corporate bonds but not enough that the lender may receive more money to invest in other parts of the economy. there is no one definitive way to kill of a zombie company

4- wall street numbers are not GDP. GDP is the sum of transactions of government spending + household spending+ corporate spenfing . if companies stop buy backs and puts that money in the hands of the people that will actually increase GDP because those people will actually go out and spend it.
- where as corporate buy backs tend to keep money in the banks rather than flooding the economy

what your saying is true. Maybe in my haste to over simplify what I was thinking I didn’t explain the issues correctly.

The financial system works efficiently to fund coporations, but GDP growth masks the falling standard of living and increased burden put on government to provide social services (which forces them to raise taxes and spend less efficiently then what a private company could do).

If not addressed, once the stimulus money runs out we may see a K type recovery, which will slow down long term growth. I think America has the potential for more than 3% growth if we address the inefficiency of tax revenue spending and cut out loopholes that decrease collection of tax revenue (such as with Amazon) or at least incentivize corporations to offer more benefits so the government doesn’t have to foot the bill as much.

 

[FuturePAF]

The US has a young vibrant population. All the immigrants from poor countries are in young age, and have high birth rate. White population however is on decline and aging.

Good for the economy, not so good for the bottom of the current population.

 

[Yongpeng Sun-Tastaufen]

Good for the economy, not so good for the bottom of the current population.

Not necessarily good for economy. Mexico has young population and it is very underdeveloped compared to China for example.

 

[FuturePAF]

Not necessarily good for economy. Mexico has young population and it is very underdeveloped compared to China for example.

The US is not Mexico. While America does have a lot of unskilled immigrants coming in from poor countries, it also attracts the best and the brightest to our universities and our corporations.

The question to ask is, could an immigrant engineer like Elon Musk prosper in your country? Politics don’t tend to get in the way of major technology companies as much in the US as they may do in other countries.

 

[Yongpeng Sun-Tastaufen]

it also attracts the best and the brightest to our universities and our corporations

Not now because covid. And may not in future. China also attracts bright talents from abroad.

 

[FairAndUnbiased]

The US is not Mexico. While America does have a lot of unskilled immigrants coming in from poor countries, it also attracts the best and the brightest to our universities and our corporations.

The question to ask is, could an immigrant engineer like Elon Musk prosper in your country? Politics don’t tend to get in the way of major technology companies as much in the US as they may do in other countries.

US attracts 2 kinds of people, mostly:

1. "I am from a desperately poor country. I want geographic arbitrage in the US so that even being a janitor makes more money than home."

2. "I am being held back in my moderate/high income country by old institutions, government and corporations. In the US I can become a billionaire instead of a middle class bot."

Both are right wing and very cozy with neocons which is why nuts like Cuban right wing, Iranian monarchist, ex Muslims, Chinese right wing Felon Goons, etc. All seem to be reading from the same script.

Particularly ex Muslims, they make Chinese self haters look like paragons of loyalty in comparison.

 

[FuturePAF]

US attracts 2 kinds of people, mostly:

1. "I am from a desperately poor country. I want geographic arbitrage in the US so that even being a janitor makes more money than home."

2. "I am being held back in my moderate/high income country by old institutions, government and corporations. In the US I can become a billionaire instead of a middle class bot."

Both are right wing and very cozy with neocons which is why nuts like Cuban right wing, Iranian monarchist, ex Muslims, Chinese right wing Felon Goons, etc. All seem to be reading from the same script.

Particularly ex Muslims, they make Chinese self haters look like paragons of loyalty in comparison.

Strange, I’ve always heard most of the people coming in, once they become citizens will vote Democrat. Don’t get me wrong, many are the hard working type that would vote for the republicans for the lower taxes if it was for the xenophobia (which is why a higher percentage of Latinos votes for Trump this election then last).

Depending on if they make comfortably into the middle class, they will stay voting Democrat or move over to voting Republican. Second generation and third generation citizens usually don’t hold on to the baggage of their immigrant ancestors and tend to vote their interests.

 

[Beidou2020]

US household net worth was $130.2 trillion at the end of Q4. The American people are literally richer than ever before.

Average American is getting poorer. I have read horror stories from middle class and working class Americans that are now basically in poverty. The wealthy are getting richer through massive money printing. America will be like India soon with mass poverty and extreme wealthy. No middle class.

 

[Mk-313]

what your saying is true. Maybe in my haste to over simplify what I was thinking I didn’t explain the issues correctly.

The financial system works efficiently to fund coporations, but GDP growth masks the falling standard of living and increased burden put on government to provide social services (which forces them to raise taxes and spend less efficiently then what a private company could do).

If not addressed, once the stimulus money runs out we may see a K type recovery, which will slow down long term growth. I think America has the potential for more than 3% growth if we address the inefficiency of tax revenue spending and cut out loopholes that decrease collection of tax revenue (such as with Amazon) or at least incentivize corporations to offer more benefits so the government doesn’t have to foot the bill as much.

thats a static way to look at economy. what youre failing to realize that everyday as people turn 18 they are added to the economy and their productivity increases GDP and part of their productivity is going to get taxed which naturally increases government revenue. As long as all of these things are in harmony the net effect is fine.

standard of living and GDP are not correlated. standard of living is measured via GNI and average household income which i will give it to u has not increased

America shouldn't increase more than 3%. it is a developed economy which are much less volatile and ideally should stay between 1-3%

Average American is getting poorer. I have read horror stories from middle class and working class Americans that are now basically in poverty. The wealthy are getting richer through massive money printing. America will be like India soon with mass poverty and extreme wealthy. No middle class.

doesnt 600 million of your population live in poverty? and the total debt of your country is 317% of GDP? may u oughtta look after them before u guys turn like india

 

[Yongpeng Sun-Tastaufen]

doesnt 600 million of your population live in poverty?

Highly doubt this stat.

 

[Mk-313]

Highly doubt this stat.

China has over 600 million poor with $140 monthly income: Premier Li Keqiang - CNBC TV18

Business News: Get the latest Business News, Live Share & Stock Market Updates, Top News from India and across world. Read Top Business News and updates on financial, economic and banking news on CNBCTV18.

www.cnbctv18.com

chinas economy has started to deleverage. their state enterprise are defaulting on their debt left and right. their banks are running out of cash to the point their putting withdrawals limits in Hebe. they opened up their bond markets to take more debt from foreign investors

normally it wouldnt bother me what a foregin economy is doing but now theyre tied to the world and how they do effect how the world economy does

 

[FuturePAF]

thats a static way to look at economy. what youre failing to realize that everyday as people turn 18 they are added to the economy and their productivity increases GDP and part of their productivity is going to get taxed which naturally increases government revenue. As long as all of these things are in harmony the net effect is fine.

standard of living and GDP are not correlated. standard of living is measured via GNI and average household income which i will give it to u has not increased

America shouldn't increase more than 3%. it is a developed economy which are much less volatile and ideally should stay between 1-3%

The government guarantees/subsidizes bad investments and then the advocates for these bad investments try to get the government to write off their debts. This is true in student loans, housing mortgages, and too big to fail corporations.

True, new people turn 18 everyday, but more and more of their income goes into paying for higher rents/mortgages, student loans, and other expenses, leaving less for discretionary spending.

A reform to the education system (less college more trade schools, etc.) could allow young people to get a better ROI on their time and finances, as well as the government’s subsidy. The government is propping up failing universities. In housing, the government bailout of lenders that offered mortgages to people they knew couldn’t pay led to the 2008 economic crisis. Ultimately, it required legislation (Dodd-Frank Act) to stop these practices, but the damage had been done.

Ultimately, the rising debt will need to be paid back with higher taxes, which will eat away at the productivity of the average taxpayer. Perhaps the government expects population growth to outpace the debt burden.