700 Club said that the Economy has grown 7.2% this year. Is that for real?

[JVS]

Or are they just creating a lie about how good the economy is?

They just called the election of 2000 a miracle!

I really should have turned the TV off after Maury.

[dpbrown]

1. It's a lie, mostly based on military spending and Halliburton

Without military spending included, the outlook is dismal.

[zoidberg]

4. Military spending was unchanged in third quarter

The full press release is on the BEA website.

[loudnclear]

38. No increase in military spending has to be a lie on its face. THINK!!

How on earth could there be no increase in military spending this year?
Better watch the base from which all these numbers are compared. And there is proof out there that the tax cuts were not "spent" to raise consumer spending. Consumer "debt" is what is churning these numbers. Remember: Everything is relative! With that $300-600 tax increase, the average American paid down some debt or used it to pay down and increase their debt. $600 down on a new SUV=$34,000 worth of debt. An do on.
FOX and the 700 Club may spin this for a while but soon even the ditto heads will realize that they are still unemployed. They will soon realize that our soldiers are still dying in Iraq and Afghanistan and no amount of spin will be able to survive a single act of terrorism in this country. Our economy is very fragile and as soon as China bears down on us (six months) and EU gains power you will find out just how fragile our economy is. Remember, Greenspan left interest rates alone. Just a little rise in inflation will send us over the edge.

[Frodo]

40. That consumer spending claim doesn't make much sense.

There is proof that the tax cuts were not spent? Consumer debt was what was spent?

Consumer spending increased at the fastest pace in 25 years (or rather, the sale of US goods and services).

Your statement equates to "they didn't spend THAT money, they spent SOME OTHER money". Which is silly.

[Mistress Quickly]

5. someone said this in another thread, no increase in military spending...

zoidberg (465 posts) Thu Oct-30-03 02:54 PM
Response to Reply #5

11. Defense spending was unchanged in third quarter


Non defense government spending increased around 4%. Last quarter military spending drove GDP growth. Not this quarter.


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http://democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=616639#616772



but I haven't seen any links yets for the info.

[zoidberg]

8. A link

http://www.bea.gov/bea/newsrel/gdpnewsrelease.htm

Real federal government consumption expenditures and gross investment increased 1.4 percent in
the third quarter, compared with an increase of 25.5 percent in the second. National defense was
unchanged in the third quarter, in contrast to an increase of 45.8 percent in the second. Nondefense
increased 4.1 percent, in contrast to a decrease of 5.4 percent. Real state and local government
consumption expenditures and gross investment increased 1.3 percent, in contrast to a decrease of 0.2
percent.

[Mistress Quickly]

10. Thanks for the link...

I like to be informed.

[alcuno]

57. Wait a minute. If these are quarterly advances...

Doesn't that mean that if the change in the second quarter over the first was 45.8% and they are unchanged in the third, then they are still up about 46% over the first quarter. After all, defense spending didn't go down.

[jiacinto]

55. Not necessarily true

http://www.washingtonpost.com/wp-dyn/articles/A40148-2003Oct30.html

" Angers, France: If possible, could you give us some idea of the proportions of the growth for "normal" increase and "war-related", i.e., defense spending. Is this growth being artificially driven by government or tax payer related spending ?

Thank you.

Frederick L. Joutz: The GDP release by BEA today suggests that federal government and defense expenditures were basically flat in the 3rd quarter. Thus, they do not appear to have directly effected the economy.

Defense expenditures did surge by 45% in the 2nd quarter and federal expenditures increased by 25%. Thus government expenditures were important contributors to the 3.3% growth rate in the 2nd quarter. But they have not contributed to the 7.2% released today. "

[Frodo]

56. Check again.

From the report itself:

The acceleration in real GDP growth in the third quarter primarily reflected an acceleration in PCE,
a deceleration in imports, an upturn in exports, and accelerations in residential fixed investment and in
equipment and software that were partly offset by a deceleration in federal national defense spending.

[grannylib]

2. True but spinning

Yes, that seems to be the accurate figure...and of course, it's all due to Shrubbie's shrewd tax cuts for the wealthy...
Problem is, economic growth without job creation is pretty meaningless, and I have heard that the numbers are skewed somewhat due to something about major mortgage refinancing or something...

[grannylib]

3. Miracle, eh?

It's a miracle any of us regular Joes/Josephines have survived the idiot's reign thus far...

[Sarwah]

16. hi, it's your daughter

can you pick me up? please?

[JVS]

18. Welcome to DU

[Sarwah]

28. thank you. :)

[newyawker99]

19. Hi Sarwah!!

Welcome to DU!! :toast:

[Sarwah]

29. thanks!

[Blue-Jay]

20. nevermind

edited because it appears that I jumped to the wrong conclusion. Sorry about that.

[Sarwah]

21. thank you heartily for your assumption.

did you ever think that maybe i am one of grannylib's three daugthers?

[Blue-Jay]

22. If that's the case, please accept my apologies.

The timing of your first post seemed a little odd to me. I'll edit my previous post.

[Sarwah]

24. ...

what do you mean, the timing?

the thing is, i'm at school right now and am becoming rather ill. i'm trying to get ahold of my my mom so she can pick me up, and i know she's been on the forums this morning. so i thought it would be rather clever of me to get an account and track down one of her posts, but so far she does not appear to have seen my reply.

by the way, sorry for cluttering the forum with completely unrelated posts.

[Blue-Jay]

33. I'll PM you, and butt out of this thread with my last shred of dignity.

[Sarwah]

34. well, as long as you still have a shred. that's what counts.

[grannylib]

44. Sorry for the unrelated-to-topic posts, all

Sorry about any confusion when my youngest tried to reach me (she is wise for 16 - she knew right where to find me!)
Thanks much for your looking out for a sister DUer!!
I can see where you might have thought that someone was trying to needle me...
All is well!

[JVS]

45. Hey no problem.

[grannylib]

30. Still need to be picked up?

[Sarwah]

31. yes

my period started this morning and it's rather agonizing at the moment.

[NicoleM]

6. Well, it was a miracle, sort of.

The guy with the most votes didn't win.

[mac5]

26. if its not real its close

The economy did expand in the third quarter substantially. I think as sad as it might be, economic recovery may be at hand and that is the worst thing that could happen because if we have two more "good" quarters, GWB would land slide next November and may have the momentum to hurt us in the house and the senate even more. Im hoping we atleast maintain what we have but we have more seats up next year than the GOP and that puts us at risk. I just dont see any leadership in the party, we seem to be flailing away no making any real progress.

[JVS]

7. Pat just called Zell Miller "our favorite Democrat"

while discussing Miller's endorsement of W

[Jack The Tab]

27. There's the last nail in the coffin...

When the antichrist is calling any Dem a good person, you know it's time to cut that "Dem" loose.

[RichM]

9. It's an "annualized rate" for the 3rd quarter. Here's a link to BEA press

release & summary -

http://www.bea.gov/bea/newsrel/gdp303a.htm

It doesn't appear to be due to military spending. The latest tax cuts went into effect during the quarter.

[OHdem10]

11. 700 Cublub spreads WH Propaganda

There is apparently some growth out but what they refuse to say is--this is growth with jobs being developed. This week I saw on CNN where RJR, Sony and one other large Company are cutting thousands of job each. Are these grwoth gains and profits being relaized because Comapnies are downsizing not growing??

It is nothing new for Pat Robertson to paint Rosy Scenarieios for the White House. He carries great influence over the Republkican Sheeple. Back under Bush I we had the same situation--growing stockmarket at times but no new jobs. The mantra finally became "he cares more about WallStreet than Mainstreet and Bush I lost the election.

[MUAD_DIB]

12. If that were even remotly true then wouldn't

everyone be employed?

[beyurslf]

13. the 7.2 was for the 3rd quarter

Much of that, I would presume, was from the mortgage boom. May applications hit an all time high. These loans would have closed in the 3rd quarter, primarily. I work in mortgage lending and at that time, we typically worked on a 60-90 day window. May apps closed in Aug and Sept.

Many people took out equity in their home and spent it. This drove the economy and will not happen again in Q4. In July I had 80 loans on my desk and closed 50-60 loans a month all summer. I have 2 loans today and will close 6 in October. None of the Oct loans were cash out.

Mortgage refinance applications have dropped 90% since May.

The mortgage bust is upon us and can no longer be expected to carry the economy and consumer spending.

[flpoljunkie]

23. Also fueled by consumer spending up 26% from child tax credit rebates...

This money has now been spent.

As for business, inventory reduction continues as companies are wary of the staying power of this "rebound".

The outlook for the fourth quarter is considerably less bright for all these reasons.

Edited to add that the 45.8% military spending in the second quarter helped to catapult the economic growth of the third quarter.

[nolabels]

35. This does make sense, then afterall

The ripple effect of that military spending along with the housing sector. So can we tell that the pent up demand in the housing market has been spent and other than a rebound from a really bad place to just bad nothing really has happened and it is just living on borrowed money. I posted this in the another thread

More Gross Domestic Propaganda for an unsuspecting populous. I will mark this day as the launch of Multinationals to get * another appointment. They have to try and prop this dude up; they know they will not have that much of an easy going with an alternative. A business community that is another interregnal part in this web of this government / military / prison complex makes me suspicious. There must be some up kick, but is it real and sustainable or is just, cooked books, hype and few other flukes. Out here in Southern California things don’t look that great. Any clues on World GDP, is it really measurable?

This whole story has to be major bullshit somewhere, with all the work they have shipped overseas, to fall or flat nature of the dollar, to the improperly factored inflation rate. Interest rates have stayed stagnant which are also good indicators of no real economic growth. This seems just like a lot of bunk, other than lots of more homes built what could this be based on, people picking up more debt because of refies on homes on which a big bubble has been built up?

People are really desperate for good news and I think they are lighting a match and trying to start a fire with this. Pump and dump, get some more fools to buy into it so they sell theirs and get out? Who knows, with parts of the government giving out more falsehoods than truth, how could anybody believe any of it? Does anybody feel financially better off than they were 3 years ago? Is there a Poll on DU somewhere? Not that I like bad news, it's just that I like real and true News and I have not seen a whole lot of it coming out lately

Lastly is GDP tied to a Quality of Life Index for an average person?


Other thread

GDP is ONE indicator of economic performance- economy is not "blistering"
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=617202

[zoidberg]

14. Everybody will never by employed

Even in the best economy plenty of people don't have jobs.

[ibegurpard]

25. Hahaha

7.2% would be a boom. What a bunch of fools.

[tom_paine]

39. Like Stalin, Brenzhnev and the Soviets

They are SO intoxicated with their power to lie unchalleneged and of course now they have "all the tools of the State at their disposal" (don't think they haven't been using them), that they cannot resist but go for the REALLY BIG LIE.

My response: Yes, Comrade Bunnypants*, and toilet paper production is up 600%, too.

We are rapidly approaching an era of Soviet-style blanket lies.

Be ready. It's going to another level.

[Blue_Chill]

15. You watch the 700 club?

How do you manage to control the desire to toss your tv our the window?

[JVS]

17. I was watching maury and I walked across the room to use the computer

Maury ended and 700 club came on. So I just listened while reading and working.

[ProfessorGAC]

32. It's A Complete Fabrication

There are uncorrected data from Q3 that reflects a nominal GDP growth rate, if extended for 4 quarters, of 7.2%. The actual growth rate is MUCH lower than that.

The corrections will come in later, usually about a month behind, to account for negative net exports and the like.

In addition, since the economy's been so bad, many very large firms (retail and consumer products) have book closings at the end of June. As a result, they depleted inventories to enhance cash positions at fiscal year end. (This is a common accounting technique.)

So, in the third quarter, lots of these companies rebuilt inventory, but the actual consumption of those products has not yet taken place. This happens every year, but it is more intense in poor macroeconomic periods, as the inventory run-off is more drastic.

So, the answer to your question, is Yes, they're lying. It may be a lie born of ignorance, but a lie nonetheless.
The Professor
The Professor

[tom_paine]

36. Of course it's a complete fabrication, Prof

Nice to hear it confirmed, though.

[Frodo]

41. Corrections are not always down professor.

Latest GDP growth figures for 1st and 2nd quarter were both adjusted upward the month after.

Isn't it wishful thinking on your part that these will necessarily go down?

[DemocratSinceBirth]

43. The 7,2% Growth Figure Is An Artifact....

It reflects the tax cuts and pent up demand.....

There has not been a mature economy in history that can grow at that rate on a sonsistent basis....

[Frodo]

46. We've come close before.

1998 Q1 and Q4 and 1999 Q4 were all close to this.

One quarter does not represent growth on a consistent basis. It also does not represent fake growth either. "It reflects tax cuts" is like saying "Bush was right" and "pent up demand" is worthless too since they spent the money last quarter (it could have been pent up longer). of course it's "pent up" that what happens when people stop spending. When they START spending again it's ALWAYS "pent up demand" being released. That doesn't make them fake numbers.

It doesn't have to grow like that consistently (if it did we should just start a new party since no Democrats will get elected). If the estimates of 4% growth for the next four quarters are true we have our work cut out for us.

[ProfessorGAC]

47. No, And You're Facts Are Wrong

The first estimates for Q1 and Q2 were adjusted downward. I don't know where you got your information.

I get mine from the database of the NAEA which is linked to SAUS.

I don't do ANY wishful thinking about the economy. I analyze the data for a living and to teach econometric analysis using polydimensional modeling.

So, you can question my "wishful thinking" if you wish, but you're information on which you base your questioning is in error.

Additionally, if you actually looked at the data, the quarterly estimates that come out within 30 days of the quarter's end have been revised downward 84 times in the last 100 quarters. I think it's wishful thinking on your part that you would catch me in some logic trap.

Sorry. No cigar.
The Professor

[Frodo]

49. Interesting. But check again.

Just a month ago the second quarter GDP growth was revised upwards from 3.1% to 3.3%. And the May figures revised Q1 upward from 1.6% to 1.9% and also revised upward the previous Q42002 figures to 1.4%.

Or are you just claiming that FIRST adjustments are more likely to be downward rather than upward?


And I'll cut you some slack and presume you don't puff yourself up with big words, but there is no term "polydimensional modeling", it's "polydimentional analysis". Try applying that to revisions over the last twenty-five years or so and compare revisions during upward cycles, static cycles and downturns. I suspect you will find that things are more likely to be revised upward during upswings (particularly at the start of an upswing) and more likely to be revised downward at other times (not just "growth", but increasing/decreasing change in the rate of growth - so Q4 1999 would be a "downswing" even though it had positive GDP growth).

My point is that it still boils down to "wishful thinking". If, in fact, the economy is not doing particularly well... we will see downward revisions of previous quarters' GDP growth. If, on the other hand, this is the start of some "boom"? Expect several quarters to be revised upwards based on later figures unavailable at the time.

It is backward reasoning to say things aren't so good since they will be revised downward. It's that things will be revised downward IF things aren't going as well as we noe think.

[ProfessorGAC]

50. Yes.

I'm sorry you are not aware of the term polydimensional analysis, but that doesn't mean it doesn't exist. It just means you don't know what it is. PDA is a technique in which every output parameter is iterated over a series of input parameters and interactions in a polynomial curve fit, taking out the datapoint in question, reducing the degrees of freedom for each iteration, but by a differing dimension (the parameters and their interactions) for each parameter, each interaction, each degree of freedom. Since your questioning me, i'm quite surprised you didn't know that.

Your suppositions about upward and downward corrections is in error as well. The probability of downward correction is 5 times that of upward corrections.

Lastly, i'm am connected to the NAEA database RIGHT NOW! There is no record, at all, of upward corrections to GDP growth in Q1 and Q2. This is the fully compiled database of the association that derives it's data from the Dept of Treasury and Dept of Commerce as fed into the Statistical Abstract of the United States. I don't know where you get your numbers.

You've bored me. I'm out.
The Professor

[Frodo]

53. Did you read the post?

I'm well aware of the term. Notice how I used it correctly and you didn't? :-) We physicists were using it in high-energy physics long before you guys glomed on to the technique.

You restate your previous argument without any thought to the point. How does the cyclical change in the rate of economic growth affect the likelihood that GDP growth revisions will be made upward or downward? Can your students dodge questions like that? Can you say that growth will never hit 7% because 100% of the last 36 months have been below that? What kind of answer is that?

I have no idea what database you are connected to "RIGHT NOW", but the financial press seems fine for me. CNN/Money reported on 9/23/03 "Gross domestic product, or GDP, grew at a revised 3.3 percent annual rate in the three months from April to June, up from a 3.1 percent rate reported a month ago that Wall Street economists had expected to be unchanged." and in May reported "The US economy plodded ahead at a 1.9 percent growth -rate in the first quarter of 2003,
The Commerce Department said recently revising upward its preliminary 1.6 percent growth estimate.
"

[Frodo]

54. Let me save you some time

I have a conference call so mom says I can't stay out and play with you anymore.

According to the commerce department, from 1978 to 1999, EVERY category of revision for current-dollar GDP and real GDP (advance to preliminary or final OR preliminary to final OR any of the above to "latest") is MORE likely to be UP than Down.

Maybe your "model" is upside down?

[andym]

37. It's for the third quarter, it was expected due to tax cuts, it will slow

Annualized rate for the third quarter only.

This article says it was partially a temporary consequence
of tax cuts and it was not expected to continue at this
rate in the coming quarters.

http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20031030/bs_dowjones/200310300841001006

However, the question is what effect does this economic activity have on
employment. Employment is a lagging indicator, it can lag even 12 months after the economy is recovering. If it's going to change
then we'll see evidence of fewer layoffs, more hirings.

[LittleApple81]

42. Read the "Bush Boomlet" in Slate

http://slate.msn.com/id/2090498/

snip...
Some of the Bush boom is a matter of defining performance. We have yet to see two consecutive quarters of impressive growth. And even if John Snow's prediction of 2 million new jobs in the next 12 months materializes, that is still poor by historical standards. That breaks down to only 166,000 new jobs per month—which barely covers the 150,000 new job-market entrants each month and leaves a mere handful of positions for the millions of jobless who are currently seeking work. Between October 1993 and October 2000, the economy created an average of 2.88 million jobs per year. That's a boom.

The Bush boom promoters also sidestep the real issue about the third-quarter growth. It would be hard for the economy not to surge when you consider how much money the administration has poured into it in the form of tax cuts and government spending. It remains to be seen whether the economy can produce jobs and growth without continual booster shots, and whether the massive deficits the administration is running will drag down growth for years to come.

In Bush Boom, Bowyer argues that markets and investor activity can tell us more about the economy's health than the backward-looking government data upon which we usually rely. As evidence for the boom, he points to personal income, which has grown at a 5 percent clip since the third quarter of 2001, strong productivity, and reduced taxes on investment. (OK, OK, and OK.) Employment growth, he argues in the antidisestablishmentarian vein, is happening under the radar screen. (Maybe.)

The problem for the boomsters is that the data by which we traditionally measure economic growth examine the past, not the future—tomorrow's GDP figures will tell us what happened in the past quarter, not what will happen next quarter or next year. Job creation—just one among many important indicators but probably the most important political indicator—is a famously lagging indicator. Worse, these figures are always subject to revision. So, an economy that seems to be doing poorly can, when one looks back at it a few years later, be deemed to have been doing OK (see: 1991 and 1992). And when you're at the tail end of a boom, it can feel like it's going to go on forever (see: 2000).

snip...

[Changenow]

48. My neighbor who has been unemployed for a year

was blasting the Democrats this morning. Since the NYT had a reporter who lied, every word in the NYT is false. Fox doesn’t publish corrections; therefore all of Fox is truthful. The war was necessary, and it is impossible to support the troops and oppose the war. It is time to invade Iran and Syria, maybe Saudi Arabia

It sort of made my head spin. Politics is like religion; how you could not reflect on what you believe after this much time is incredible to me. It just has to be that if you start to think about the truth then you will go insane.

[Woodstock]

52. Tell him you will drive him to the recruiting station to enlist

and take the place of one of the one armed or one legged Americans who are coming home

[Woodstock]

51. temporary effect of tax cut

http://www.ufenet.org/research/BushStimulus.html

...Half of all Americans will receive less than $100 from the tax cut in 2003, according to Citizens for Tax Justice. But Americans making $1 million or more will receive $93,500 from the tax cut, according the Tax Policy Center.

Over the next four years, the bottom 60 percent of taxpayers will receive just 9 percent of all the tax cuts, while just the top one percent receives 39 percent of the tax cuts. The tax cut benefits flowing to the top 1% far outpace the 23% share of federal taxes they now pay.

The distribution of tax cuts do not get better with age. The tax cuts targeted at middle- and low-income families sunset, or disappear, after 2004. As a result, in 2006, 52 percent of the Bush tax cut goes to the wealthiest 1 percent of Americans...

Most states are constitutionally required to balance their budgets. So, in order to close their budget deficits, state legislatures will have to either cut spending or raise taxes. By cutting spending, they will layoff public sector workers leading to further declines in demand. Most states rely on the sales and property taxes for revenue, which most directly affect middle- and low-income families. ..