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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (66824)	8/26/1999 2:41:00 PM
From: Les H	Read Replies (3) \| Respond to of 132070

US COMMERCE DEPT PLANNING SOME UPWARD REVISIONS TO GDP 12:29 EDT 08/26 By Joseph Plocek marketnews.com WASHINGTON (MktNews) - The U.S. Commerce Department's eleventh benchmarking of the National Income and Product Accounts could add as much as 1.5 percent, or $115 billion, to growth, sources say. The changes are scheduled for October 28, when 3Q GDP will also be released. The benchmarking includes a new treatment for software that recognizes it as fixed investment, because it produces a stream of services that lasts more than a year. In fact, the Bureau of Economic Analysis estimated the average service life of software at three to five years. Currently software is recognized as a cost of production that is consumed. As a result of the changes, GDP will be increased in business purchases and in government consumption. Private fixed investment is expected to be about $95 billion higher, and government about $20 billion higher. Robert Parker, chief economist at the BEA, said the new methods are definitional changes "as opposed to statistical revisions based on new sample data that help re-write economic history, so it is risky to assume anything" about the revisions "since 15 other pieces of information might come in." Nonetheless, Parker concedes that the software revisions alone will push GDP higher. He said that reclassifications from consumption to investment raises GDP, especially in the private sector. He cited insurance and airline reservation systems as two items that particularly have longer lives than previously estimated. In the government sector, air traffic control and tax tracking systems in use at the Internal Revenue Service are other examples. The changes in the NIPA accounts are in line with those discussed in an April 1998 Congressional Budget Office study entitled "Changing the Treatment of Software Expenditures in the National Accounts," which found current NIPA accounting may make "current statistics misleading." Kristin McCue, CBO economist, put the increased investment at $47 billion for 1995. "That change would result in... an increase in measured GDP (of) about 0.7 percent," she said. BEA also plans smaller changes in a number of NIPA categories, which may be previewed at a press conference this fall, Parker said. The other changes include modifications to government employee retirement plans and private noninsured pension plans; redefinition of some financial services, such as excluding capital gains distributions by regulated investment companies from dividend payments; and reclassification of government taxes and transfer programs. >>>What the article doesn't mention is that these changes >>>are being dictated by the White House and perhaps also >>>Congress in order that they can ratchet up their surplus >>>numbers and push through their spending packages to buy >>>the Election 2000 votes. There was an article in the UK >>>papers that Blair is pushing for an upward revision in >>>the GDP so that he can announce budget increases in >>>health care and other programs.

To: Knighty Tin who wrote (66824)	8/26/1999 3:36:00 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

To All, A hymn of praise for the greatest indicator of the past year, the Paper Chase Shooting Off His Mouth Matrix Dynamic (PCSOHMMD). This morning, I bought puts on the QQQ in response to the PC message saying that big tech stocks would always go up. I already have a large profit. I was scared for a few minutes as the QQQ rallied despite the infallible contrariness on the PCSOHMMD. But inevitable is inevitable. Folks, we have a major talent on this thread, even if it has an uncanny backwardization. <g>