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GDP is atrocious, "velocity of money" is worse, but really any attempt to measure "economic well being of most people" (direct quote from OP) based on dollars m

GDP is atrocious, "velocity of money" is worse, but really any attempt to measure "economic well being of most people" (direct quote from OP) based on dollars moving through the financial system is problematic. Finance-industry circle jerks? Counted - often over and over again. Domestic labor (especially child care) by a stay-at-home spouse? Not counted. Made-up increases in asset value? Counted. Barter or charity? Not counted. When GDP is the basis, mean vs. median hardly even makes a difference. Many countries have worked toward better measures of human prosperity, but again the US is falling behind. https://www.scientificamerican.com/article/gdp-is-the-wrong-tool-for-measuring-what-matters/ https://www.scientificamerican.com/article/gdp-is-the-wrong-...

indymike 4y ago
GDP is a blunt force measurement. A country with a high GDP per capita USUALLY (not always) has a higher standard of living that one with a low GDP per capita. Taxation figures heavily into GDP - most taxes end up being measured as a share GDP (and why "financial circle jerks" and "made up increases in asset value" are counted as they eventually... but not always... end up being taxed). That is why "economic growth" is so good for the public sector. More GDP generally means more money to work with. Output that is out of reach of taxation (i.e. domestic labor, barters, charity) is also USUALLY not counted in GDP. Finally, the Scientific American article is a really good read. GDP is not a measure of quality of life, and really never has been. It's just a measure of economic output.