The U.S. economy will grow by 3% in July. How do I know? Because a statistician with the government says so, that’s how.
How does he know? Because the new accounting methodology guarantees it.
Here’s how it works! From now on, money invested in research and development will be counted as an addition to GDP.
But what if the research fails to produce anything of value? No matter. It will produce something of value: a higher GDP figure for the government to report.
The government’s stat man said this: “We’re capitalizing research and development, and also this category referred to as entertainment, literary and artistic originals, which would be things like motion picture originals, long-lasting television programs, books and sound recordings.”
And you thought re-runs of Magnum P.I. do not make America richer.
I wonder how much richer America is because of Bowling for Dollars?
Yes, we count output of successful research and development as adding to GDP. But that’s way too narrow a definition. It is too focused on development. What about research? We have to count research!
This is the cost-of-production theory of value resurrected from the conceptual grave!
I guess this means that sinking dry holes are productive.
Well, why not? The government counts government expenditures as productive. Dry holes are surely as productive as the federal government. Probably they are a lot more productive. Think Iraq. Think Afghanistan.
The Bureau of Economic Analysis is going to revise all past GDP figures, all the way back to 1929. The statistician admitted, “we are essentially rewriting economic history.”
See how productive new ideas are? This rewriting of economic history will be funded by the government.
Don’t call this a conceptual dry hole. Call it government productivity.
This new approach is being adopted all over the world. This is the new international standard.