Here’s my personal stimulus story. I added something to U.S. GDP this week. The American-made 9-year-old water heater in my Cambridge condo failed yesterday, covering the basement floor with water. This was discovered about 6 pm last night. As I was not in the area, the neighbors all got together in an attempt to stanch the water gushing out. They closed all of the shut-off valves, but the water kept coming. Greg Walsh, the plumber, had planned to come the next morning, but sent his son to investigate. It turned out that the American-made shut-off valve had failed and, despite being shut off, was not impeding the water flow. Son of a great plumber is at least a pretty good plumber, so he managed to stop the geyser. By noon the apartment was being supplied by a new American-made water heater and equipped with some new shut-off valves. GDP should be at least $1000 larger and government economists will hail this as a green shoot of recovery.
9 thoughts on “Adding to GDP this week (the failed water heater)”
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The technology of water heaters and car batteries is very advanced. They have figured out how to make them fail minutes before their warranty expires so that you can get a miniscule amount to cover the failure for them to survive their full lifetime. Once in a while they last slightly longer than the warranty.
On the bright side, the new water heater is probably more energy-efficient than the old one.
Tom: It is true that the thing failed about one year before its 10-year warranty ran out. I haven’t gotten the bill yet so I’m not sure what the warranty covered. But even if the warranty covered most of the parts cost, the manufacturer still had to invest labor and material in making the new water heater, so the GDP has gone up about the same as if I had to pay for the whole thing.
rglovejoy: I asked if the new heater would be more efficient and the plumber said that it was almost exactly the same design.
I had a GE water heater that failed only a year into a 12-year warranty. GE claimed “installer error” and refused to make any restitution.
This is an unusual story. Normally an insurance claim for $10K+ involving new floors is involved!
I agree about your rants about the GDP. The GDP is a useful comparator, when Government spendings, savings rate and ratio of production to services are kept constant. The greatest fallacy is not adjusting GDP for savings rate, i. e. developing a measure like GDP10 = a calculation of what the GDP would be the current quarter, if the savings rate were 10 percent.
Curt,
Yeah, the water heater warrantees are more or less worthless (parts only, absurd exemptions, etc.). Get the lowest warrantee one, and just replace the anode rod every two or three years and it’ll last 15 years. The only difference between as 12 year warrantee heater and a 6 year warrantee one is that the 12-year has two anode rods, and the 6 year has one. That’s it.
If you flush the water heater a couple times a year and replace the sacrificial electrode every now and then, a water heater should last nearly forever. Newer ones have a flame flash sensor, which is made of glass, and easy to break on installation, and can’t be replaced.
The warranty on the heaters is a joke… most of the cost is in the labor to install the heater (and if its burst, you’re not exactly in a position to bargain). My thermostat recently gave way and the plumber was kind enough to go to the supply store and have it replaced under warranty. Saved $15. Spent $130 for 1/2 hour of plumber’s time.
Given that most heaters will eventually leak, it is surprising that builders don’t work the probability into their construction.A depressed area with a built in sump pump could easily mitigate the effects of the leak, before it has caused extensive damage.
Now, what would be really good (and I’d pay double for it) is if there was an easy way to connect/disconnect the heater from the water mains without the involvement of a plumber. I’d still come out much more ahead.
If my experience isn’t unique, toasters too tend to fail a week or 2 after the warranty has expired – almost never before.
This aside, warranties are really a tricky animal. About 3 years ago, I replaced all 4 tires on my car at Costco. They offer life time warranty (whatever that is) as long as you rotate them (at a Costco shop) once a year. Got a hole in your tire? No problem, it’s covered, and they will repair it. Tires blow up because you hit a pot hole or a cure? No problem, it’s covered, and they will replace it. So, 2 months ago, when I ended up with a flat tire (it was a nail) I went to Costco to have it repaired. But I was refused the service because I have “water damage”!!! I was furious, so I asked, how could I have avoided the water damage? What did I do to cause it? Answer, nothing, and nothing — it’s the road and the weather of New England!
So much for that life time warranty!