well you might not recall it but it is taught in every Econ 101 class in the country.
British economist Maynard Keynes explained the problem this way: according to national income statistics, if you marry your maid, national income goes down. The salary you no longer pay her is deemed to be a fall in the country's wealth, even though the two of you may be happier than before the marriage.
Look at it this way, economics tries to be an exact science. I hire a photographer to come take 200 pictures of my wedding, I agree to pay him $10 a picture. In both of our models that is $2,000 in GDP. Now I hire a photographer for 10 hours at $20 an hour to take 200 pictures of my wedding. GDP stays the same in my model, in your model it goe down $2,000, which model makes sense to you?. Consumption is the opposite of expenditure, you can't say there was an expenditure but no consumption anymore then you can change mathematics.
Four days before Obama’s inauguration, before he officially took charge of the American government, Rush Limbaugh boasted publicly that he hoped the president would fail. Of course, when the president fails, the country flounders. Wishing harm upon your country in order to further your own narrow political views is selfish, sinister and a tad treasonous as well.
Subsequently, during his State of the Union address, which is pretty much a pep rally for America, an unknown congressional representative from South Carolina, later identified as Joe Wilson, stopped the show when he called the president of the United States a liar. The president showed great restraint in ignoring this unprecedented insult and carried on with his speech. Speaker Nancy Pelosi was so stunned by the slur, she forgot to jump to her feet while clapping wildly, 30 or 40 times after that.
Last spring, president Obama took his wife Michelle to see a play in New York City and Republicans attacked him over the cost of security for the excursion. The president can’t take his wife out to dinner and a show without being scrutinized by the political opposition? As history has proven, a president in a theater without adequate security is a tragically bad idea. (Remember: “Apart from that, Mrs. Lincoln, how did you enjoy the play?”)
At some point, the treatment of president Obama went from offensive to ugly, and then to downright dangerous.
The healthcare debate, which looked more like extreme fighting in a mud pit than a national dialogue, revealed a very vulgar side of America. Obama’s face appeared on protest signs, white-faced and blood-mouthed in a satanic clown image. In other tasteless portrayals, people who disagreed with his position distorted his face to look like Hitler, complete with mustache and swastika.
Odd that burning the flag makes Americans crazy, but depicting the president as a clown and a maniacal fascist is accepted as part of the new rude America.
Maligning the image of the leader
now explain why Keynes statement that if you marry your maid it reduces GDP, how does that work if wages don't factor into GDP? LOL
yes when I pay my gardener it shows up in C as me making an expenditure( or my consumption of his services), if I pay him under the table it doesn't show up as me consuming his services, therefore it reduces measured GDP.
So if you want to argue semantics you can make an arguement your right, his wages don't show up as part of C, but my paying him does show up as part of C. So yes wages are part of C because every wage is part of Consumption.
Regardless if I start to pay him above the table instead of below the table it increases measured GDP.
well that isn't what they taught me when I got my B.S. in Econ from an Ivy League school. You know in the real world.
If you pay someone to mow your lawn and report wages paid, that adds to GDP. If you pay that person under the table, it doesn’t. If you pay your maid to clean your house, it adds to GDP. Except if you marry her, then it doesn’t. Unless of course she gets access to the credit card, in which case spending probably increases GDP dramatically. In England, sex with your wife does not add to GDP, but sex with a prostitute does – even if it is unreported. Go figure. There are so many jokes and one-liners that I could add to this litany, but I’m going to resist. Okay, just one. Can you imagine the reception if you came home with a blonde hair on your dark suit and your excuse was, “Honey, I was just doing my bit for the national economy. We all have to make sacrifices.”
Housekeeping, cleaning, cooking, and other such duties do not get counted in GDP, although without them GDP would suffer significantly. Perhaps that is because when the original discussions about what constituted GDP were underway, “woman’s work” was significantly undervalued.
You believe in democracy right? Just let the house vote on the bipartisan bill that 70 Senators have already voted yes on. It will pass and you can stop the tea billies from blackmailing democracy.
(Reuters) - President Barack Obama defended his decision to bypass Congress and overhaul U.S. immigration policy on his own on Friday, saying he was forced to act because House of Representatives Speaker John Boehner would not let legislation come to a vote.
Ok optimal, sorry went out for a while. I'm going to answer your question because you were open minded enough to admit you were wrong last time.
My first statement was it would immediately increase the statistical measurement of GDP, this is irrefutable, factual, definitional and mathematical.
C includes among other things ALL wages paid and reported. This is why I mentioned Keynes maid and his quote. If JMK pays his maid 200 quid a year that is part of C which means it increases GDP. But if John marries his maid and she is cleaning the house as his wife he no longer pays her so, GDP declines even though the same amount of work is being done. That is why I stated it was first a statistical measurement.
OK so if even one Juan goes from being paid under the table to having reported income then GDP increases by that amount.
So while you are correct, the current GDP numbers do reflect the money that underground labor spends, it doesn't include their initial wages.
Now, you did make a good point, which was when someone receives income (any income even under the table ) and spends it, it translates into an increase in the GDP. This is what economist (even beginning economist) call the multiplier effect. It is in fact, almost the basic fundamental assumption of Keynes "priming the pump theory."
In economics we measure this multiplier effect as a function of the marginal propensity to save (MPS). So if the worker spends 95% of what he earns the gdp multiplier is 1/.95 (that is how an mathematicians summate an annuity.) . Obviously the math is a lot more complex because the MPS changes with each transaction.
Ok so anyone who has taken econ 101 realizes Obama's regulatory changes increases the GDP. It's simple math.
Now if you want we can talk about efficient markets and why these changes also result in a real increase in GDP we can continue your education.
OK try and stay with me on this optimal, it is complex so if you have black and white tea billie glasses on it's to complicated for you.
Legalizing existing workers immediately improves the GDP statistically and gradually improves the GDP and wages. It immediately improves GDP statistically, like Keynes said if you want to reduce the GDP marry your maid. By bringing underground labor into the system the GDP statistics improve by the amount of activity that is no longer underground.
Over the longer term, immigration reform facilitates the ability of labor to move to it's most productive position. This increases GDP.
Immigration reform helps reduce business activity that illegally employees, exploits and underpays non-paper holding immigrants based on a system of fear of deportation. As a consequence all wages are held down, this is preventing GDP increases.
This action allows these people to open business, take out loans, advertise and hire other workers. This increases the GDP.
no my little minion. As was perfectly clear from your posts, you thought the 2% payroll deduction was a nice tax cut for the middle class when you thought Bush passed it, when it was pointed out to you that Obama passed it, you decided it was a raid on social security.
I was just pointing out to the observant that you are so biased that your opinion shifts 180 degrees depending on what party supports the policy. Your opinion isn't based on what you believe policy should be, your opinion is based solely on your tribal allegiance to the tea party.
I was outraged when Obama signed the Renewable Fuel Standards in 2007 and forced gasoline producers to use U.S. made ethanol in their blend. It cost the taxpayers a lot of money that went straight to the corn lobbyist . I found it particularly outrageous that the law even put high tariffs on cheaper sugar cane ethanol from overseas. Doing this was an obvious play to the agricultural interest that sold out the American consumer (not to mention starved millions around the globe by driving up corn prices.)!!!
Oh wait a minute, that was 2007 and Bush and the GOP passed that legislation. I think the Renewable Fuel Standards act was a brilliant move that saved the country.
Oh I see, it was a tax cut when you thought Bush had passed it but once it was pointed out to you that the black president signed it, it magically turned into a raid on Social Security. LOL
Well, meanwhile in the real world Obama isn't setting any precedent, he is doing exactly what Reagan and Bush Sr did. One of the reasons it is constitutional is because Congress has not allocated enough money to fully enforce deportation of 11 million people, as a consequence the Executive branch has no choice but to allocate deportation resources where they will do the most good.
Your laughable analogy to taxes of course makes no sense, unless of course the Wacko Birds defund the IRS.
I guess you are confused, Obama passed the 2% payroll tax cut not Bush, it was part of the origional stimulus bill which NO GOPER voted for. It was signed in 2010, any idea when Bush stopped being President?
The American Recovery and Reinvestment Act of 2009 (ARRA) (Pub.L. 111–5), commonly referred to as the Stimulus or The Recovery Act, was an economic stimulus package enacted by the 111th United States Congress in February 2009 and signed into law on February 17, 2009, by President Barack Obama.
Decreases budget deficits, balances out an aging population, and strengthens Social Security:
The CBO found that the enacting Senate immigration reform bill will reduce the federal budget deficit by nearly $850 billion over the next 20 years. In addition, the independent Chief Actuary of the Social Security Administration (SSA) has found that immigration reform will improve the long-term financial standing of Social Security by adding younger workers to the U.S. workforce. The SSA Actuary estimates that the Senate’s immigration reform bill will add nearly $300 billion to the Social Security Trust Fund over the next decade and would improve Social Security’s finances over the long run, extending Social Security solvency by two years.
nice fairy tale, LOL yeah your study shows few illegals were getting paid below minimum wage, is that the one you and Rush limp brain did? LOL oh and this law doesn't make illegals eligible for Social Security, you know in the real world, but will make a significant portion of them no longer being paid under the table and now they will be paying into S.S., there is no way to avoid the payroll tax (remember the one the GOP raised by 30% when they took control of Congress).
Strengthens the overall economy and grows U.S. GDP: Independent studies affirm that commonsense immigration reform will increase economic growth. The Congressional Budget Office (CBO) estimated that enacting the Senate immigration reform bill will increase real GDP relative to current law projections by 3.3 percent in 2023 and 5.4 percent in 2033 – an increase of roughly $700 billion in 2023 and $1.4 trillion in 2033 in today’s dollars. A larger labor force; higher productivity and investment; and stronger technology, tourism, hospitality, agriculture, and housing industries are just some of the key ways that immigration reform strengthens the U.S. economy.
Meanwhile in the real world. Obama isn't adding 5m unskilled workers to the labor pool at all. Those people are already here and are mostly already working. Since they do not have proper documentation they are often taken advantage of by employers who underpay them, off the books. This change will allow those workers to come out from the shadows and employers will be forced to pay them market wages (raising wages for everyone) increasing the GNP, and they will now pay taxes instead of being part of the underground economy.
They are doing the jobs that the meth addicted children of the tea billies are to lazy to do, let's let them do it legally and pay taxes on their earnings
Sen. Mitch McConnell (R-Ky.) isn't even majority leader yet, but he is already facing a rebellion from Tea Party members of Congress who are livid about President Obama's unilateral moves to reform the U.S.'s immigration system and allow some five million undocumented immigrants remain in the States.
As Robert Costa of The Washington Post reports, Republican Party leaders are struggling to rein in right-wing conservatives who want to strike back at Obama by threatening a government shutdown or even trying to impeach the president, moves that party elders believe could backfire. Then there are the impolitic remarks coming from the likes of Rep. Michele Bachmann (R-Minn.) — who said Obama's executive action would invite millions of "illiterate" immigrants to the U.S. — which could further erode the party's standing with Latinos.
Here's how Sen. John McCain (R-Ariz.) put it to Costa:
"It only takes a couple" of comments for an unflattering narrative to build about the Republican response, said Sen. John McCain (R-Ariz.). "That's the trouble with having some of these new, young punks around here. They ought to listen to us old geezers." [The Washington Post]
- - Ryu Spaeth