03-10-2025, 10:12 AM | #8669 | |
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Consumption + Investments + Government Spending + Net Exports = GDP
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03-10-2025, 04:11 PM | #8670 | |
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03-11-2025, 07:59 AM | #8672 |
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On the GDP reporting, the only issue is what the headline is since most people don’t read the actual reports (or much of the articles about it). If your goal is to report what the non-government economy is doing then you would exclude gov’t spending (but that is imperfect for a lot of reasons); if you use government spending to prop up the numbers or claim economic success for your agenda, then you would prefer the full GDP/GNP numbers. Thus, it is political.
Worth noting that other measures have had the reference numbers (headline numbers) changed over time. Inflation measures and money supply measures come to mind as examples. I think it is really just propaganda (political); those with the interest to read the details already look at the full suite of reporting. |
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03-11-2025, 08:04 AM | #8673 |
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On GDP currently, the administration would greatly reduce government spending, which would lower GDP and likely result in “recession” headlines. If the private sector is growing (perhaps not fast enough to fully offset the decline in gov’t expenditures), is it really a recession that requires some fiscal or FED intervention? That’s the economic issue; the political issue is obvious and I won’t go further down that path due to forum rules.
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03-11-2025, 08:09 AM | #8674 | |
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03-11-2025, 11:27 AM | #8675 | |
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in every other instance such as here... its pretty much a straight disaster
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03-11-2025, 04:46 PM | #8676 | |
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The only times tariffs really make sense, IMHO, for an economy as globally connected as ours is if they are done early and with extremely solid reasoning behind them. Meaning, they aren't intended to block trade and instead are setup to ensure fair trade. To expand on that point a bit. One area China has used heavily in the past to accelerate manufacturing job loses in America was through artificially devaluing their currency. This was a major reason China would purchase and hold disproportionate amounts of US debt. That's not the only way China competes, but we're not going to have a PhD dissertation on US / China trade here... Back to the point. We could have levied tariffs on those goods in a focused manner to counter the currency manipulation and ensure the US manufacturers could compete on level ground. Doing blanket tariffs this late is counterintuitive. You're going to struggle to build back the manufacturing base and its auxiliary suppliers. But even worse... by attacking our allies you're losing access to their markets too... Best we can do is to seize on the world's growing concern around China with trade agreements that make our market more favorable to trade with while building an off ramp from China's manufacturing prowess... Republicans and Trump can't do that though as the major trade pacts to do that, like the TPP, were signed by Obama. So instead we're setting ourselves on fire. ![]() |
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03-11-2025, 11:48 PM | #8677 | |
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03-12-2025, 03:14 AM | #8678 |
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Hello all,
A reminder to all that please do not post political posts. Such posts will / have been deleted and may lead to infractions / bans against members and / or this thread being deleted. You can read more about this here. Thanks, Mani
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03-13-2025, 12:07 PM | #8680 | |
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Government cannot be run like a business.
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03-13-2025, 12:08 PM | #8681 |
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I'm not, but this coming recession is a bit "manufactured" I would say.
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03-13-2025, 03:34 PM | #8683 |
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Recession:
GDP is roughly $30T annually. Government spending (fed and state) is approx $5.1T. If DOGE is successful and cuts $1T from Government spending, the $24.9T of private economy will have to make that up to avoid a recession, and then some to have growth. That equates to about 4%, so it is possible but difficult. A recession used to be defined as two consecutive quarters of negative GDP growth, so using that, we can see that it is possible the timing of cuts in government spending and non-government growth might misalign, so a recession is possible. I’d call it a “technical recession”. The last few years GDP growth was heavily impacted by increases in government spending, which is why the numbers were good but people didn’t feel it (they just felt the inflation). A technical recession as I described above also likely won’t be felt in the private sector. As with any macro analysis, those who lose their jobs (in this case mainly government employees) obviously do feel it severely. IMO a recession is possible, but perhaps less than 50% probability, and will be concentrated in the government sector if it does happen. And it will be brief. |
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03-13-2025, 03:59 PM | #8684 | |
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When Delta Airlines says travel took a nose dive and partially blames government firings, there are reverberations that extend to many parts of the economy. It won’t just be government employees looking for jobs if we get any kind of recession IMO. With regard to the market, earnings expectations need to come down. If SPY earnings are handicapped by 10% the market will need to come down a lot more to trade at a 18x valuation like in some recent pullbacks. Not predicting this, but I’m not especially eager to buy these dips with the current vision for economic policy since I expect earnings to come in lighter than the consensus.
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03-13-2025, 04:06 PM | #8685 | |
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The real issue is whether the non-government economy is growing and will continue to grow. I think so. I also think the FED will cut rates and there might be a “DOGE dividend” and other tax cuts that help further stimulate the non-gov’t sectors (especially consumer), but that all remains to be seen. (I think this is the real reason the FED wants to go slow on rate cuts, so the economy isn’t over-stimulated) On the other hand, if the tax package from the first Trump administration is allowed to expire at the end of 2025, as is currently law, we will need massive FED rate cuts to offset the fiscal anti-stimulus or 2026 will be really bad. Taken together, the FED will be doing a dance with the administration to maintain balance and a growth bias through all of this. |
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03-13-2025, 04:16 PM | #8686 | |
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03-14-2025, 08:13 AM | #8687 | |
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if you look at the unemployment report over many months, you'll see most job growth and hiring came from GOVT and Healthcare... white collar / professional jobs have not been good for at least 2 years.... and the number of people I know across ALL industries that I talk to that have been laid off is massive... with very little prospects in finding another good job that pays as well. So fundamentally a huge part of the employed population is now slowly starting to be unemployed and losing the wage growth they've had... all while inflation has slowed down albeit still not within any accepted targets. Housing market is effectively frozen right now as well... All of those things have been true for months now... with only the stock market rolling up until the last month... now I think things will get worse but the downturn didn't start a month ago... unless folks solely look at their 401k... of which most america does unfortunately because they aren't well educated... now none of these things define a recession... but if gdp turns negative.... then it will be seen in many metrics... i continue to be of the mindset that nothing since Covid has been real as prices are finally catching up to most consumers
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03-14-2025, 08:36 AM | #8688 | |
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The only thing injecting uncertainty into the economy is the executive. Correct, it started around 2 months ago, cant really remember what happened to kick it off but I'm sure someone will remind me.
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03-14-2025, 08:52 AM | #8689 | |
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if you look at the economy as a whole which you should be... i've provided at least few examples above why it hasnt been rosy for months...
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03-14-2025, 08:55 AM | #8690 | ||
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Anyone doubting recession and using GDP as a factor into their analysis perhaps may want to change course.
https://www.opb.org/article/2025/03/...economic-data/ Quote:
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