
StrongTowns: Market Correction Time - mmonihan
https://www.strongtowns.org/journal/2020/3/2/market-correction-time
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luckyscs
This argument fails to account for the insane amounts of wealth that djia
Nasdaq are gaining from global growth. I would like to see these numbers
compared with global gdp vs the total government spending of all nations.

I also question how the switch from products to services has influenced the
numbers. I don't know how gdp is calculated but it seems non trivial to value
goods to services in a why that truely communicates the expansion/value of the
economy.

Further more, markets look to the future. Let's say an asteroid passes by with
all the energy and materials we would ever need and we could harvest then for
free, would the market grow by all the value of the minerals in that asteroid?

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djannzjkzxn
Is it just me or is there a very basic math error here? The chart compares the
sum of deficits (aka the increase in cumulative debt) over several years to
the increase in GDP. But GDP is an annual measure. You can’t say that the debt
is directly paying for the increased GDP as depicted here, because in fact the
quantity measured by GDP _resets_ each year. If one dollar spent by the
government once can create one dollar of GDP not only this year, but also keep
creating another dollar of GDP for each year in perpetuity, that would
actually be a pretty good investment! The basic macro answer would be that a
dollar of government spending gives you a dollar of GDP _this year only_
(perhaps with some constant multiplier), so this would be a great result for
proponents of government spending.

We ought to compare annual debt to annual production, or cumulative debt to
cumulative production.

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aazaa
> The chart shows cumulative growth in GDP since 2010 compared to the
> cumulative amount of deficit spending by the federal government. Without
> that deficit spending, GDP over the past decade is negative.

> ...

> ... The Modern Monetary Theorists out there might find this to be a great
> argument for deficit spending, but it’s really a pretty simple trick to grow
> the economy by $1 trillion today by borrowing $1 trillion from tomorrow.

The author makes some good points.

The discussion would be strengthened if the graph obviously showed what he
says it does. This should be a simple matter of using GDP growth minus deficit
spending as one of the bar sequences.

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Gibbon1
There is a paper from Norway's geology administration that says what's
happening is that fossil fuel productivity is in steep decline since about
2005. Which means the amount spent on fossil fuel (oil and gas) extraction is
growing faster than the world economy. Basically an economist looking at gross
figures thinks everything is fine. But a mayor of a city looking at his
budgets feels like things are getting worse.

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rjkennedy98
This really screams of someone who wants a crash because they were on the
sidelines during this bull market. Many if not most of the companies are
international in nature and gdp is just a single data point for judging them.
Many if not most companies have little to do with strip malls and our built
environment. What on earth does Google or Microsoft have to do with car
centric development? People use google all around the world.

