pacomartin
pacomartin
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May 4th, 2012 at 9:33:15 PM permalink
Quote: whatme

Pac I will try to simplify the answer.
GDP IS NOT PROFIT. Just b/c GDP goes up doesn't mean profit went up
In short, People pay an income tax. Businesses pay a profit tax.



I think that answer is too simplified. I'm looking into more insight.

Businesses are in business for profit. It seems to me that an increase of $1.7 trillion should produce some more profit. Instead we have a large drop in Corporate Income Taxes.

Fiscal Year 2006 2012 Change$ Change%
Individual Income Taxes $1,043,908 $1,164,650 $120,742 11.6%
Corporate Income Taxes $353,915 $236,801 $(117,114) -33.1%
Social Insurance and Retirement Receipts $837,821 $840,650 $2,829 0.3%
Excise Taxes $73,961 $79,415 $5,454 7.4%
Customs Duties and Fees $24,810 $30,817 $6,007 24.2%
Estate and Gift Taxes $27,877 $11,377 $(16,500) -59.2%
Miscellaneous Receipts $44,577 $104,889 $60,312 135.3%
Total $2,406,869 $2,468,599 $61,730 2.6%
whatme
whatme
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May 8th, 2012 at 9:24:12 PM permalink
Pac I gave a short answer b/c if I were to go further the frustration with government BS would get JB suspended for 30 days!!!


GDP is based on "market value" not actual price paid by customers.

Take a can of tuna fish, 3 stores selling it at $1.99, $1.89, and $1.79 the market value is $1.89. However if you use a coupon that saves you $1 the market value remains at $1.89. Coupons, sales, rebates, and anything else (short of permanently lowering the price) business use to get you to buy tuna fish is an ADVERTISEING EXPENCE, and does not affect the value.

While business want to make $ people are cheap. They well we, will not pay more $ simply b/c the costs of the products/services skyrocket. People want "value" so while sales are going up, the profits are dropping well based on your chart plummeting.

If I go any further I'll get banned.

In short GDP is worthless garbage.
pacomartin
pacomartin
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May 9th, 2012 at 6:57:42 PM permalink
Quote: whatme

GDP is based on "market value" not actual price paid by customers.

Take a can of tuna fish, 3 stores selling it at $1.99, $1.89, and $1.79 the market value is $1.89. However if you use a coupon that saves you $1 the market value remains at $1.89. Coupons, sales, rebates, and anything else (short of permanently lowering the price) business use to get you to buy tuna fish is an ADVERTISEING EXPENCE, and does not affect the value.

In short GDP is worthless garbage.



Hypothetically if the government says the GDP of Nevada is $127.5 billion in 2010.

The NGC says the top 256 casino (over $1 million gaming apiece) had $22 billion in revenue for the year ending June 30, 2010 .
They go on to say that there were 52.7 million rooms available, of which 43.225 million were rented at an average daily rate of $100.52
So the revenue for the rooms was 43.225 million TIMES $100.52 = $4.345 billion.
But $ one billion dollars of rooms were comped.

So how do the rooms get figured into GDP for Nevada? As $4.345 billion, or as $3.345 billion (less comps), or as some other calculation called "market value".
That could be the rack rate of all the rooms including the ones that are empty, which could be $10 billion or higher.



Gross GDP = C + I + G + (X − M)
C= consumption
I = Investment
G = Government spending
X= Exports
M = imports
JB
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JB
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May 9th, 2012 at 8:12:39 PM permalink
Quote: whatme

Pac I gave a short answer b/c if I were to go further the frustration with government BS would get JB suspended for 30 days!!!


Huh?
whatme
whatme
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May 9th, 2012 at 8:35:53 PM permalink
Comps are considered as expenses for the casino. The hotels had $4.345 b in revenue, based on your figures. Mind you the casino has other rooms on hold that the hotel can't sell publicly.

The casino pays the hotel for the rooms so if they want the hotel to have a 99% occupancy @ $300 a night, all that has to happen is to have 99 rooms comped, 1 room available but not used, the other rooms not available, and the casino pays the hotel $300*99=$29,700. btw casino hotel occupancy and rates get manipulated like this all the time.

Since the casino pays a fixed price for the rooms that price is what the value is for the comped room.

The easy answer to how GDP is calculated is to take market value and not care about discounts or whether other companies or divisions are paying the bill.
whatme
whatme
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May 9th, 2012 at 8:41:33 PM permalink
JB I should have been a bit clearer.

I mean no disrespect just that, Had you posted what I would have with all the bad language you would have been suspended, I would have been kicked out.

Sorry for the confusion.
Oliver
Oliver
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May 9th, 2012 at 8:58:12 PM permalink
This reminds me of the question: Who is John Galt?
pacomartin
pacomartin
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June 24th, 2012 at 12:52:32 AM permalink
Quote: whatme

GDP is based on "market value" not actual price paid by customers. In short GDP is worthless garbage.



So if nobody agrees that the problem is a revenue shortfall, in what area of spending is the government gone overboard? I can break down human resources into the first level (if it helps).
  • Education, Training, Employment, and Social Services
  • Health
  • Medicare
  • Income Security
  • Social Security
  • Veterans Benefits and Services

    Human Resource spending is now exceeding anemic revenue.

    Revenue Total, Federal outlays Fiscal Year National Defense Net interest Physical resources Other functions Undistributed offsetting receipts Human resources
    $1,258,566 $1,461,753 1994 $281,640 $202,932 $70,677 $74,845 -$37,772 $869,431
    $1,351,790 $1,515,742 1995 $272,063 $232,134 $59,113 $73,099 -$44,455 $923,788
    $1,453,053 $1,560,484 1996 $265,748 $241,053 $64,170 $68,859 -$37,620 $958,274
    $1,579,232 $1,601,116 1997 $270,502 $243,984 $59,852 $74,362 -$49,973 $1,002,389
    $1,721,728 $1,652,458 1998 $268,194 $241,118 $74,669 $82,206 -$47,194 $1,033,465
    $1,827,452 $1,701,842 1999 $274,769 $229,755 $81,892 $98,101 -$40,445 $1,057,770
    $2,025,191 $1,788,950 2000 $294,363 $222,949 $84,925 $113,777 -$42,581 $1,115,517
    $1,991,082 $1,862,846 2001 $304,732 $206,167 $97,492 $107,049 -$47,011 $1,194,417
    $1,853,136 $2,010,894 2002 $348,456 $170,949 $104,308 $117,026 -$47,392 $1,317,547
    $1,782,314 $2,159,899 2003 $404,744 $153,073 $115,577 $123,030 -$54,382 $1,417,857
    $1,880,114 $2,292,841 2004 $455,833 $160,245 $116,239 $133,252 -$58,537 $1,485,809
    $2,153,611 $2,471,957 2005 $495,308 $183,986 $130,131 $141,743 -$65,224 $1,586,013
    $2,406,869 $2,655,050 2006 $521,827 $226,603 $164,699 $138,245 -$68,250 $1,671,926
    $2,567,985 $2,728,686 2007 $551,271 $237,109 $133,815 $130,338 -$82,238 $1,758,391
    $2,523,991 $2,982,544 2008 $616,073 $252,757 $161,883 $142,436 -$86,242 $1,895,637
    $2,104,989 $3,517,677 2009 $661,049 $186,902 $443,791 $162,781 -$92,639 $2,155,793
    $2,162,724 $3,456,213 2010 $693,586 $196,194 $88,753 $174,065 -$82,116 $2,385,731
    $2,303,466 $3,603,061 2011 $705,625 $229,968 $161,850 $177,374 -$86,494 $2,414,738
    $2,468,599 $3,795,547 2012 estimate $716,300 $224,784 $279,960 $200,320 -$98,897 $2,473,080
FleaStiff
FleaStiff
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June 24th, 2012 at 3:17:41 AM permalink
I think it has something to do with blood from a turnip.
FleaStiff
FleaStiff
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June 24th, 2012 at 3:24:42 AM permalink
The casino pays an arbitrarily determined fixed-price for the room which is simply a bookkeeping value not a market value.

I don't see any reason to have high priced hotel rooms other than it allows for discounts and comps at high rates. Its still a "sticker" price from thin air.

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