Re: OT Cheney - Cutting Gas Tax Stupid

LOL. The globalized economy is why economists switched from GNP to GDP.

GNP measures the total annual net output _of_ a nation, regardless of where the output was produced. That's not too bad to calculate when all of a nation's factories are located within its borders, but it is hard if they're spread around the world and when accounting and taxation are handled differently in each place and companies try to shift costs and taxes to nations where those factors are most favorable. Because this causes difficulties in accounting, a few decades ago economists started to favor GDP, which measures the total annual net output produced _within_ a nation, regardless of whether it was produced by companies incorporated there or by foreign companies operating within that nation.

Suppose a company has factories in the US but is incorporated in Bermuda for legal and tax reasons. US GDP will measure what those factories produce, while the "true barometer" of GDP will say those factories contributed little to the US economy but a great deal to Bermuda's.

Does that mean you think the Toyotas assembled in the US, of imported parts, are considered to be made in Japan? LOL