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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (31280)	1/9/2009 11:15:13 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Re: "the opposite of the housing stock inflating is the housing stock deflating, which has been happening for a few years now." Yes. The bubble that inflated housing valuations (enabling MEWs) has definitely popped now.... Re: "More to the point the GDP gains where temporary, a temporary gain means you lose that gain later," Yes. Correct. The MEWs (which helped people keep their consumption spending up) were finite. They could not continue forever. Re: "But it was part of the GDP. If your measuring GDP growth you still count it. GDP doesn't depend on the increase being sustainable." Correct. And, as those before and after charts showed, that's exactly what happened. It was COUNTED (appropriately) in the Bush era GNP numbers. It's just that it was not sustainable. It was hollow. A bit like eating your seed corn to get through hard times. Re: "If you want to measure some form of self defined adjusted GDP growth to remove temporary factors," (Yes, that's exactly what the chart did....) Re: "... than you have to add the temporary factors back in when the bubble pops, or your double counting a negative factor." Now you've lost me. I don't understand that last part. the 'double counting a negative factor' thing doesn't make any sense to me. For example: we can produce two different charts for the current year (or 2008, take your pick) to show "GNP". One can be the ordinary as-reported government GNP numbers. The other chart can show an "adjusted GNP" number net of mortgage equity withdrawals (which, although they are much down in magnitude from recent years, MEWs are probably still going on as a measurable effect right now. Some people are still drawing from their mortgages, it's probably much reduced though, most likely back closer to 'normal' historical levels now). NEITHER chart (the un-adjusted, nor the MEW-adjusted one) would be "double counting ANYTHING. Let alone "double counting a negative factor".... So I don't see what you are trying to say with that....