Comment on It will trickle down any second now

• Alaknar@sopuli.xyz ⁨1⁩ ⁨week⁩ ago

  When it comes to measuring their wealth it’s not real money.

  This is not entirely correct.

  As in: it’s technically correct, but practically they just use their equity as leverage for loans, turning them into cash without actually touching them. Oh, and since they took on debt, now they get to report that as a loss and get tax breaks. They can pay off the interest from whatever actual money they’re earning.

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  • Saarth@lemmy.world ⁨1⁩ ⁨week⁩ ago

    This is exactly my point, their equities act very similarly to our real money/assets. There is nothing unrealised about it

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• InternetCitizen2@lemmy.world ⁨1⁩ ⁨week⁩ ago

  But when it comes to calculating GDP and growth and other economic metrics these are still included

  I’m not sure what you mean here. GDP is total money spent and as such would not include equity.

  Tho GDP is real, or at least as any metric and proxy we use for measurement.

  When it comes to measuring their wealth it’s not real money.

  This bit is kinda true. Its not money until its sold. I would include being leverage into a loan to count similarly and should be taxed as capital gain (this is a current loophole)

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  • Saarth@lemmy.world ⁨1⁩ ⁨week⁩ ago

    Is the money earned by hedge funds and investment banks part of the GDP calculations or not ?

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    • InternetCitizen2@lemmy.world ⁨1⁩ ⁨week⁩ ago

      Example if Elon Musk takes out a loan with his tesla stocks as collateral, will the financial transaction that have taken place, be part of GDP calculations or not ?

      No, but the things he buys with said loans will.

      The standard understanding of how GDP is calculated is: GDP = Consumption © + Investment (I) + Government Spending (G) + Net Exports (NX).

      The investment must be spent that year and most of the net worth that is being discussed here was accumulated over previous years. Said net worth is not real money until it is sold (or tax side stepped with loans on assets). To be a bit more clear this is money spent by investors on securities and such that is counted; not the revenue of the brokers.

      I think in your wanting to make capitalism immoral, which it is, you are holding a private definition of these things. It is also confusing as these definitions can be somewhat similar to each other and used interchangeably (like mass and wight, have you ever said something weighs 10kgs?).

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      • Saarth@lemmy.world ⁨1⁩ ⁨week⁩ ago

        The point I am trying to make here is the equities act like real money. They can be traded, and profits can be generated by said trades and deals (the profits are part of the GDP calculations). Which means that for all practical purposes equities are equivalent to real money.

        Now we can debate what actually constitutes real money, and whether the definition ends at dollars or all global currencies or government bonds or assets like gold etc etc.

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