Don't understand. Doesn't debt, which is not income, contribute to the purchasing power and the GDP? Or is that considered a subsidy? GDP = money supply x velocity of money. Money supply is not just income. If it were, then how could economy grow?
When the government issues debt and spends money, for instance, on infrastructure it creates income for companies and people building these things. Therefore, indeed, debt contributes to the GDP
This discrepancy could be due to very high illegal immigration. Wages paid under the table in cash won't get counted as income while the products produced by illegal immigrant labor would get counted since they are sold on the market.
Thanks for the comment. This of course makes sense. The immigration argument is brought up very frequently these days. The issue is, nobody can quantify it. $600 billion is a lot and I doubt even half of it is immigration. Time will show what was the reality after they revise the data.
Don't understand. Doesn't debt, which is not income, contribute to the purchasing power and the GDP? Or is that considered a subsidy? GDP = money supply x velocity of money. Money supply is not just income. If it were, then how could economy grow?
When the government issues debt and spends money, for instance, on infrastructure it creates income for companies and people building these things. Therefore, indeed, debt contributes to the GDP
This discrepancy could be due to very high illegal immigration. Wages paid under the table in cash won't get counted as income while the products produced by illegal immigrant labor would get counted since they are sold on the market.
Thanks for the comment. This of course makes sense. The immigration argument is brought up very frequently these days. The issue is, nobody can quantify it. $600 billion is a lot and I doubt even half of it is immigration. Time will show what was the reality after they revise the data.