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Thursday, April 4, 2013

The Economy by Industry and Expenditure:

http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth/gross_domestic_product_gdp.html

http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth/consumer_expenditures.html

The US census collected in 2010 has all sorts of interesting information.  In a quest to find out where all the money of this world goes, I came across two census spreadsheets that look at it from the business and the consumer perspective.

From the business perspective, money tends to slosh around in vague categories that don't look like they're providing any value at all.  For instance, obviously useful portions of the economy, like Agriculture, Construction, and Manufacturing are relatively small portions of our GDP (133 billion, 537 billion, and 1.585 trillion respectively.)  Meanwhile, categories wherein I don't even know what the people are doing are enormous portions of the economy:

'Professional and Technical Services' :  1.069 trillion.

What does this mean?  It can't be doctors since health care is in another category.  Is this entirely lawyers?  Plumbers?  Computer Programmers?  Who are these mysterious professionals and what could they possibly be doing that's worth as much as our entire manufacturing base?

Or how about this category --  "Real Estate, Rental, Leasing:"  1.869 trillion.

This can't mean the building of new houses, because that's already covered by 'Construction:  537.5 billion.'

So two trillion dollars of our economy are just fat cat landlords collecting rent while smoking cigars, laughing at the poor peasants who can't even afford their own homes?

Or over here, what on Earth category is this?  "Information:  639.4 billion."  Information is apparently a larger portion of our economy than Construction!  But how can information itself be a separate category from 'professional and technical services?'  How can it be a separate category from
'Educational Services?'  Nor is it part of the category for 'Arts, Entertainment, and Recreation.'  Apparently pure, undiluted information, whatever that means, is a huge portion of our GDP.

And don't you just love this sector of the economy?  "Finance and Insurance:  1.172 trillion"

So the Mitt Romney's of the world are having fun making money by having money, and this sitting around with vast amounts of money in your pocket (the basis of both investment gains and insurance industries) is ten times as large a source of GDP for America than 'Agriculture, Forestry, Fishing and Hunting.'

It used to be the economy made sense.  That when you saw someone working, you could figure out immediately why what he was doing was productive and necessary, and why he should be well rewarded for doing the work he is doing.  But when "Information" is a bigger slice of the GDP pie than 'Mining' and 'Utilities' combined, you start to wonder just what kind of economic system are we living under?  As far as I can tell, most of the money in the US goes into black holes that can't even explain their reason or purpose for being, or why anyone getting paid in that field deserves a cent.

When you turn around and look at things from a consumer's perspective, the economy makes perfect sense again.  The census is somewhat out of date, but in 2009, the average head of household had $63,000 to work with.  After the horrendous income taxes that Republicans keep moaning about, the average after tax income was $61,000.

After taxes, what do these people spend their income on? 

Food:  $6,372
Housing:  $16,895
Apparel and Services:  $1,725
Transportation:  $7,658
Healthcare:  $3,126
Entertainment:  $2,693
Education:  $1,068
Personal Insurance and Pensions:  $5,471  (which includes the cost of Social Security)

All of these purchases seem reasonable and ordinary.  It's unavoidable that everyone needs to buy food, clothing, shelter, health care, transportation, education and retirement planning just to live.  It's almost impossible to get by without one of these categories.  Furthermore, since happiness is the entire point of life, it would be pretty stupid not to spend anything on entertainment while we still can.

Why is it, then, that the consumer side of the economic picture is so clear, while the producer's side is infinitely abstract and obfuscated?  We spend our money on obviously necessary products like food and shelter and transportation.  We earn our money from infinitely unnecessary tasks like "Information" "Leasing" and "Finance."  Somewhere in here I sense a tape worm sucking the common American dry.

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