Re: Two zone acceleration effect

["Jack O'Donnell" <jackodonnell@xxxxxxxx>]

Greg Nowell wrote:
>
> Consider investment as a component of aggregate
> income.  Assuming some arbitrary measure of GDP,  the
> situation in case no. 1 might be
>
> Y = I + C or, in geographic zone #1,
> 100= 20 + 80.
>
> No consider zone #2
> Y=I +C
> or 100=50+50.

<<SNIP>>

Before one can accept these possibilities one must first accept
definitions for the terms used. Not very surprisingly they tend to carry
at least two independent concepts -- that which is connotatively
understood to be and that which is measured and called that which was
defined.

Starting with "Y" which is understood to be the sum of the value of all
the goods and services produced in an economy. By such conceptual
definition this would include, among many other things, the value of
fruits and vegetables, etc. produced for home consumption. Because of
the difficulty in measurement the measure is limited to the value of the
seeds, fertilizer, tools, etc. the "consumer" purchases in order to grow
these items of income and any value added by such a consumer is not
counted.

Also, a sale of common stock beyond the first issue to create a
"corporation" as an investment creates "income" for an individual but is
not included in the measure of income because it is considered just a
transfer of ownership and not "production" of a good or service. Lost in
this assertion is the difference in price from the original issue to the
present valuation which is "just there" but not accounted as part of
aggregate income.

Moving on to "I" which is connotatively understood to be the value of
production set aside to assist further production. This is measured as
that portion of measured "Y" used to purchase tools and other stuff for
the production of marketable goods and services. Excluded is the value
of a company determined by the market place to be worth more than the
funds spent to create the company, a substantial portion of the value of
all the goods and services set aside to assist production.

Next comes "C" which is understood to be the final reduction of produced
goods and services to their final resting place of zero value.

In asking your questions consider your use of these terms either as the
values measured or as the terms are actually defined. Then give an
explicit definition for whichever usage you prefer. Do so and you may
find the equations lose most [all?] of their usefulness as analytical
tools to the tautological certainty that at least one of the terms must
be defined by the "equation" supposedly relating the terms.

--
			-- jbod

		Tax Privilege, Not People
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