Net Domestic Product (NDP)

CAVEAT:  This piece is not meant to degrade any government worker who is committed to serving the public. Rather, it brings light, hopefully, to the dark myth that a government generates revenues or produces any commercially viable product that increases the nation’s productive capacity; it does not.

For any individual or business, Gross income less deductions equals Net income. The endeavor of that individual and business is to maximize income and minimize deductions to maximize Net income. The net income deserves the attention to measure the strength and, therefore, life of that individual’s or business’s growth and solvency.

Likewise, the GDP of a country also doesn’t reflect the solvency of the country. Gross is not the “bottom line”; Net is. So I created a general calculation to depict Net.

GDP has long been an indicator of our country’s economic health. Yes, we have a consumer-based economy.  Check the news about our economy. Our financial health/sickness is broadly represented by our GDP. The correlation GDP has with consumer confidence is positive and natural. When money supply IS NOT ARTIFICIAL and has momentum, people are at least catching glimpses of it. When capital is used by many, the myriad of benefits multiplies. That also means more capital is able to be squandered by those not accustomed to having any.

The elements included in GDP include many individual and commercial results. And it represents the GROSS results. The truth, as I surmise by the term and math, is that GDP is affected by positive and negative things in our economy. But it doesn’t reflect “deductions”. The three biggest deductions that don’t get mention are taxation (some is necessary), government spending (employee wages, public unions, pensions, their negotiators, and unfunded “promises”), and regulations (duct cleaning, etc). (In California, we have pet names like Point of Sale crap that requires someone to shell out another six pence. CO and smoke detectors, water heater strapping, certifying all ducting, how close the property is to natural hazards…. I could go on.)

And we’re not even considering actual taxes to pay for our unnatural profit, and fees to record documents on computers bought with taxes from people whose name is on the document being recorded. )

(Head explodes here!)

It is obvious (maybe to me alone) that government employees are compensated by monies that go to taxes instead of to further build GDP results. That means taxes are what I would include in Gross Domestic Deductions (GDD) and their recipients are essentially on welfare (paid from the same purse).

California’s government is abusing the public’s misunderstanding of their value. A tax dollar cannot ever be worth a dollar after it’s sent to the taxing authority. With a smaller government, the return on that dollar would be greater. As government employment increases relative to private employment, GDP continues to be reduced by GDD.

Thomas Paine agrees even if you don’t.

I don’t want anarchy or a complete lack of government or a lack of taxation. I don’t want to disparage public servants who work hard. I want roads fixed. I want our nation defended. But there is too much money going to (e.g.) high school Vice Principals, DMV senior management, ducting approval departments, and a lot of others (this includes their retirement funds).

GDD will forever negatively impact GDP. I want us to admit it and reduce it. To “govern”, like in a U-Haul truck, is to suppress the maximum output of the engine being governed.  For a control to increase the speed of an engine, it’s called turbo, boost, or “leave it alone”. Government, by definition, is therefore meant to limit or impede forward movement ONLY because the GOVERNOR makes the rule about “fast enough”.

As the government improves business freedom, it reduces its GDD. As Congress approves trade agreements and removes obstacles, it may fund itself. Likewise, their simple existence, vacations, and scandalous impeachment events do harm to the GDP. Why then do we pay them for scandals and vacations?

Baby steps: reduce taxes, reduce government employment, reduce government spending, and reduce the choke points on contributors to GDP. That is, reduce GDD.

Please go to https://jayemerson.com/blog/ and subscribe in the right sidebar.