BarroMetrics Views: Rewriting the GDP
What do you know guys and gals, the US GDP, due out on 8:30 am, Wednesday July 31, will show at least an additional +3%.
How do I know this? Well the BEA as of Wednesday will start counting spending on research, development and copyrights as investment. In the process, it will allow the US:
- to show its deficit spending dropping as a share of GDP
- it will also allow the US to show US debt as a share of GDP, estimated about 2%
Wow, I wish I could increase my net worth by a stroke of a pen.
It seems to me that expenditure for research and investment is expenditure rather than part of ‘the value of a country’s finished goods and services’ (Definition of GDP). The results of the research and investment would be an output for GDP but that what is not being measured.
US figures are starting to reflect those of Mainland China. Interesting but can they be taken at face value?