The GDP number came out this week - the first iteration since certain changes were made to how it would be calculated. It's all about goosing the outcome. Take one shining example that seems particularly absurd given recent events.
Pension fund benefits are now classified as investments rather than as an expense. Moreover, the value to be attributed for GDP is the future proposed benefit, not just today's cash outlay. What does that mean? So, let's assume that Microsoft has some sort of pension plan. The company contributes $10 today with the expectation that the money can earn 8% per year, so that in 20 years the employee stands to get something like $40. That future benefit of $40 is now what the GDP number will incorporate.
That decision takes ridiculousness to another level.
All you have to do is occasionally read some financial papers or websites to get smacked upside the head with an article about how practically every corporate and government pension plan is underfunded. Which means they are not hitting their return targets such that they will be able to pay out the expected benefit. Which makes the choice of promise over actual contribution silly.
And, if you don't believe me, just ask Detroit.
