The Germans have a funny, catchy little tune about their GDP. Here's part of the chorus:
ja ja ja jetzt wird wieder in die Haende gespukt,
wir steigern das Bruttosozialprodukt...
It means now we're going to spit in our hands because the GDP is rising. Here is a basic definition of GDP; Gross Domestic Product. The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
I found a lovely site that shows how US GDP compares to other countries. The U.S. is of course in first place. But I have a plan to make GDP rise to even higher levels. The plan is this: We should include all of the work thateveryone does. For example, as a housewife, the work I do is insignificant when calculating the GDP. But I am producing something, namely well adjusted, hard working adults that, with any luck, wont crowd the prison system. What about college students? I, for one, am trying to produce a happy i.e. well paid CPA with my efforts on things like this blog. Why don't we give homework a value in the GDP?
If you look at what goes into the GDP you can see what our society values, and more importantly what it does not (me). I'm not sure having a high GDP is all that important anyway, but if we're going to have one I would like to be included.
3 comments:
I'm having a hard time considering the post persons ideas for formulating the GDP. I guess it was more of a post that was going for the laugh factor than the informative route.
I don't think housewives and students doing homework are included in GDP because it would be to hard to calculate. Plus if the work people do and the good to society they bring could be calculated I don't beleive the U.S. would be sitting at the top of the list anymore.
-1 for two spelling errors in Biancca's post. Also, if you are looking for ideas, browse through the blogs on the right. I am also not happy that this is a macroeconomic post.
Anyway, GDP is not perfect, and it does miss some things. What is important is that what it counts is correlated with what it doesn't count. This is important because it means that growth in GDP is correlated with all of our activities.
One additional consideration is that the health of a firm is measured by a combination of a balance sheet (measuring stock variables) and an income statement (measuring flow variables). You can't really accurately assess firm health without both. But, GDP is capturing flow variables only. We really need a balance sheet assessment of national economies, and there just isn't one.
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