GDP doesn't measure wealth

[JACK-2]

Contrary to conventional wisdom. I usually use HDI to measure wealth, but I'm curious if there any other metrics for measuring wealth?

[The Big Daddy C-Master]

The way we measure wealth here is very flawed for many reasons. For one we measure it with a formula that has been outdated and doctored up to get the results they want without accounting inflation and things like spending money on repairing things like storm damage. On top of that they try to count things as investments when they clearly aren't. We have many problems with our system in regards to how "wealth" is calculated. It's phony.

[JACK-2]

Dec 19, 2013 20:23:26 GMT -5 The Big Daddy C-Master said:

The way we measure wealth here is very flawed for many reasons. For one we measure it with a formula that has been outdated and doctored up to get the results they want without accounting inflation and things like spending money on repairing things like storm damage. On top of that they try to count things as investments when they clearly aren't. We have many problems with our system in regards to how "wealth" is calculated. It's phony.

So, how would we measure wealth?

[The Big Daddy C-Master]

Dec 19, 2013 20:24:39 GMT -5 JACK-2 said:

Dec 19, 2013 20:23:26 GMT -5 The Big Daddy C-Master said:

The way we measure wealth here is very flawed for many reasons. For one we measure it with a formula that has been outdated and doctored up to get the results they want without accounting inflation and things like spending money on repairing things like storm damage. On top of that they try to count things as investments when they clearly aren't. We have many problems with our system in regards to how "wealth" is calculated. It's phony.

So, how would we measure wealth?

Many people would simply measure it in a more pure form of production minus consumption with inflation included in there somewhere. Our numbers try to doctor things up to get a different result.

[JACK-2]

Dec 19, 2013 20:31:45 GMT -5 The Big Daddy C-Master said:

Many people would simply measure it in a more pure form of production minus consumption with inflation included in there somewhere. Our numbers try to doctor things up to get a different result.

Do you have a chart?

[The Big Daddy C-Master]

Dec 19, 2013 20:39:44 GMT -5 JACK-2 said:

Dec 19, 2013 20:31:45 GMT -5 The Big Daddy C-Master said:

Many people would simply measure it in a more pure form of production minus consumption with inflation included in there somewhere. Our numbers try to doctor things up to get a different result.

Do you have a chart?

I'll see what I can find.

[JACK-2]

Dec 19, 2013 20:44:04 GMT -5 The Big Daddy C-Master said:

I'll see what I can find.

Thank you.

[The Big Daddy C-Master]

Dec 19, 2013 20:46:40 GMT -5 JACK-2 said:

Dec 19, 2013 20:44:04 GMT -5 The Big Daddy C-Master said:

I'll see what I can find.

Thank you.

You want a chart of how it's measured or what exactly?

[JACK-2]

Dec 19, 2013 21:22:15 GMT -5 The Big Daddy C-Master said:

You want a chart of how it's measured or what exactly?

If it all possible.

[The Big Daddy C-Master]

Dec 19, 2013 22:24:37 GMT -5 JACK-2 said:

Dec 19, 2013 21:22:15 GMT -5 The Big Daddy C-Master said:

You want a chart of how it's measured or what exactly?

If it all possible.

Well the current definition would just be total goods and services produced in a year in that territory. Problem is the numbers are doctored and contain many bogus statistics and government spending.

I'd like a wealth index that measures growth against consumption with inflation included. It would be simple but I think more effective.

1. Expenditures Approach:
The total spending on all final goods and services (Consumption goods and services (C) + Gross Investments (I) + Government Purchases (G) + (Exports (X) - Imports (M))
GDP = C + I + G + (X-M)
2. Income approach (NY = National Income)
Using the Income Approach GDP is calculated by adding up the factor incomes to the factors of production in the society. These include
National Income (NY) + Indirect Business Taxes (IBT) + Capital Consumption Allowance and Depreciation (CCA) + Net Factor Payments to the rest of the world (NFP)
In this approach,
NY = Employee compensation + Corporate profits + Proprietor's Income + Rental income + Net Interest
CCA = Igross + Inet (I= Investment)
NFP = Payments of factor income to the ROW minus the receipt of factor income from the rest of the world.
Thus,
GDP + NFP = GNP （GROSS NATIONAL PRODUCT)
GNP - CCA = NNP ( NET NATIONAL PRODUCT)
NNP - IBT = NY (NATIONAL INCOME)
3. Value added Approach:
The value of sales of goods - purchase of intermediate goods to produce the goods sold.

[JACK-2]

Dec 19, 2013 23:29:17 GMT -5 The Big Daddy C-Master said:

Well the current definition would just be total goods and services produced in a year in that territory. Problem is the numbers are doctored and contain many bogus statistics and government spending.

I'd like a wealth index that measures growth against consumption with inflation included. It would be simple but I think more effective.

1. Expenditures Approach:
The total spending on all final goods and services (Consumption goods and services (C) + Gross Investments (I) + Government Purchases (G) + (Exports (X) - Imports (M))
GDP = C + I + G + (X-M)
2. Income approach (NY = National Income)
Using the Income Approach GDP is calculated by adding up the factor incomes to the factors of production in the society. These include
National Income (NY) + Indirect Business Taxes (IBT) + Capital Consumption Allowance and Depreciation (CCA) + Net Factor Payments to the rest of the world (NFP)
In this approach,
NY = Employee compensation + Corporate profits + Proprietor's Income + Rental income + Net Interest
CCA = Igross + Inet (I= Investment)
NFP = Payments of factor income to the ROW minus the receipt of factor income from the rest of the world.
Thus,
GDP + NFP = GNP （GROSS NATIONAL PRODUCT)
GNP - CCA = NNP ( NET NATIONAL PRODUCT)
NNP - IBT = NY (NATIONAL INCOME)
3. Value added Approach:
The value of sales of goods - purchase of intermediate goods to produce the goods sold.

I-I see.

[The Big Daddy C-Master]

Yea, that's why I like my simple formula, less bs.

[JACK-2]

Dec 19, 2013 23:50:30 GMT -5 The Big Daddy C-Master said:

Yea, that's why I like my simple formula, less bs.

What do you think about HDI [Human Development Index]?

[The Big Daddy C-Master]

Dec 19, 2013 23:53:13 GMT -5 JACK-2 said:

Dec 19, 2013 23:50:30 GMT -5 The Big Daddy C-Master said:

Yea, that's why I like my simple formula, less bs.

What do you think about HDI [Human Development Index]?

I think it's more broad, but it is a neat way to look at things.