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Private debt dwarfed public debt until very recently, and it's still significany higher: https://braveneweurope.com/steve-keen-what-is-the-role-of-public-debt-a

Private debt dwarfed public debt until very recently, and it's still significany higher: https://braveneweurope.com/steve-keen-what-is-the-role-of-public-debt-and-private-debt-in-the-next-great-financial-crisis https://braveneweurope.com/steve-keen-what-is-the-role-of-pu... Also GDP is a terrible proxy for economic prosperity. A broken window adds to GDP, but subtracts from prosperity. If we had a better proxy for prosperity, it would be easier to see if government debt was actually net negative or net positive effect. As is, all arguments one way or the other are speculation and ideology.

xyzzy123 4y ago
I think prosperity (particularly if we include health, education, wellbeing etc) is unfortunately very difficult to measure and any attempt necessarily incorporates a lot of speculation and ideology. A forest cleared creates wealth & prosperity, but what was the value of the forest that was lost? What value do we put on natural amenity, biodiversity, a pristine environment? An employee works very long hours, numbers go up. Great. In specific situations though we can ask: was any wealth actually created, or was the wellbeing of the employee and their children simply exchanged for dollars? etc. It's value judgements all the way down.
- daze42 4y ago
  This seems to be the root of most, if not all, economic disagreements. It's just so hard to objectively measure these things.
- smaddox 4y ago
  Agreed. But I don't think it would take a herculean effort to do better than GDP.
- csomar 4y ago
  As the divide gets more extreme (between GDP per capita numbers and reality), I think we’ll soon have a “Quality of Life” kind of an index. You can have a high salary in country A, but live in a small studio, eat shit-food and have to take a crappy metro for work. Or you can take a much lower salary, live in a nice 2-Br apartment, eat at nice restaurants and take a new nice metro for work, and still be able to afford a car. You’d need $120k/year to afford 1 in New York, and $30k/year to afford 2 in Kuala Lumpur.
rcme 4y ago
Just because a broken window contributes to GDP doesn’t mean GDP is bad. Is your argument that the government is spending to break windows?
- ClumsyPilot 4y ago
  basically, yes. Its called the housing market - an asset that controbutes nothing to the economy goes up in value and makes life unaffordable for new generations. There are pther manofestations of thos, and it is not always done by governments. One of the few true reflections of economic health is commodities - those cannot be fakes.
  - rcme 4y ago
    Productivity has been increasing. The amount of land is fixed. In such a scenario, I would definitely expect the value of land to increase.
    - ClumsyPilot 4y ago
      Uk is a densely populated country, and 95% of land is just empty - field, forest, whatever. Only 5% of land is built on.
      - rcme 4y ago
        Sure, but you also have to consider the proximity to where the productivity gains are happening. The median household income has increased 4 times over in SF since 1990 (30K - 120K). Do you really expect property values in SF to stay the same? And of course, that's just the median. At the high end, the difference is even more pronounced. https://fred.stlouisfed.org/series/MHICA06075A052NCEN https://fred.stlouisfed.org/series/MHICA06075A052NCEN
- smaddox 4y ago
  It's not inherently bad. It measures what it measures. It's just a terrible measure of prosperity. See, for example https://www.weforum.org/agenda/2018/01/gdp-frog-matchbox-david-pilling-growth-delusion/ https://www.weforum.org/agenda/2018/01/gdp-frog-matchbox-dav...
_glass 4y ago
The Human Development index is kind of okay, if you don't want to go down the more qualitative path. https://hdr.undp.org/data-center/country-insights#/ranks https://hdr.undp.org/data-center/country-insights#/ranks

xyzzy123 4y ago

I think prosperity (particularly if we include health, education, wellbeing etc) is unfortunately very difficult to measure and any attempt necessarily incorporates a lot of speculation and ideology. A forest cleared creates wealth & prosperity, but what was the value of the forest that was lost? What value do we put on natural amenity, biodiversity, a pristine environment? An employee works very long hours, numbers go up. Great. In specific situations though we can ask: was any wealth actually created, or was the wellbeing of the employee and their children simply exchanged for dollars? etc. It's value judgements all the way down.

daze42 4y ago
This seems to be the root of most, if not all, economic disagreements. It's just so hard to objectively measure these things.
smaddox 4y ago
Agreed. But I don't think it would take a herculean effort to do better than GDP.
csomar 4y ago
As the divide gets more extreme (between GDP per capita numbers and reality), I think we’ll soon have a “Quality of Life” kind of an index. You can have a high salary in country A, but live in a small studio, eat shit-food and have to take a crappy metro for work. Or you can take a much lower salary, live in a nice 2-Br apartment, eat at nice restaurants and take a new nice metro for work, and still be able to afford a car. You’d need $120k/year to afford 1 in New York, and $30k/year to afford 2 in Kuala Lumpur.

rcme 4y ago

Just because a broken window contributes to GDP doesn’t mean GDP is bad. Is your argument that the government is spending to break windows?

ClumsyPilot 4y ago
basically, yes. Its called the housing market - an asset that controbutes nothing to the economy goes up in value and makes life unaffordable for new generations. There are pther manofestations of thos, and it is not always done by governments. One of the few true reflections of economic health is commodities - those cannot be fakes.
- rcme 4y ago
  Productivity has been increasing. The amount of land is fixed. In such a scenario, I would definitely expect the value of land to increase.
  - ClumsyPilot 4y ago
    Uk is a densely populated country, and 95% of land is just empty - field, forest, whatever. Only 5% of land is built on.
    - rcme 4y ago
      Sure, but you also have to consider the proximity to where the productivity gains are happening. The median household income has increased 4 times over in SF since 1990 (30K - 120K). Do you really expect property values in SF to stay the same? And of course, that's just the median. At the high end, the difference is even more pronounced. https://fred.stlouisfed.org/series/MHICA06075A052NCEN https://fred.stlouisfed.org/series/MHICA06075A052NCEN
smaddox 4y ago
It's not inherently bad. It measures what it measures. It's just a terrible measure of prosperity. See, for example https://www.weforum.org/agenda/2018/01/gdp-frog-matchbox-david-pilling-growth-delusion/ https://www.weforum.org/agenda/2018/01/gdp-frog-matchbox-dav...

_glass 4y ago

The Human Development index is kind of okay, if you don't want to go down the more qualitative path. https://hdr.undp.org/data-center/country-insights#/ranks https://hdr.undp.org/data-center/country-insights#/ranks