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You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measur

You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measure for quality of life/economic well being/etc, in points one and two. Does that make sense? I think you're letting your terminology run away from you in your first point. It's true that "Disposable income" doesn't need to cover educational, medical, and other social expenses in Scandinavian welfare states, but those expenses still have to be paid out of tax receipts. I don't see how the Scandinavian governments can get $35000 per person in value out of $25000 per person in income.

pedrocr 17y ago
>You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measure for quality of life/economic well being/etc, in points one and two. Does that make sense? My first point was about disposable income which is a subset of GDP. My second one only said that high relative costs can just mean flat income structures independent of GDP (hence the two extreme cases of Portugal and the US with high and low GDPs both having low costs for pizza compared to Sweden. I never really argue that high GDP doesn't make you richer. > I think you're letting your terminology run away from you in your first point. It's true that "Disposable income" doesn't need to cover educational, medical, and other social expenses in Scandinavian welfare states, but those expenses still have to be paid out of tax receipts. I don't see how the Scandinavian governments can get $35000 per person in value out of $25000 per person in income. I agree with you that the pure GDP comparison makes the disposable income point less important. But GDP by itself doesn't seem comparable either. If the Scandinavian population consumes on average more healthcare and education on a per-service not per-dollar basis than the US one, you can have a higher purchasing power just because you buy a higher percentage of Chinese goods produced with low wage costs instead of locally supplied healthcare and education delivered by higher-earning local wages (ever increasing since you are getting richer). But now I am way out of my league. IANAEconomist All this discussion naturally forgets the next point of how much this added GDP/wealth actually drives happiness. From what I saw from Happiness research Europe has actually been obtaining gains in overall happiness while the US has stagnated. One theory was that productivity gains in Europe were used to reduce number of work hours while in the US they were used to increase GDP. Europe would be doing the better tradeoff as both were already at diminishing returns for money but time off had a good return. An interesting theory at least.

pedrocr 17y ago

>You cite %change in GDP as a measure of economic growth in your third point, after claiming in your first and second points that GDP itself is not a good measure for quality of life/economic well being/etc, in points one and two. Does that make sense? My first point was about disposable income which is a subset of GDP. My second one only said that high relative costs can just mean flat income structures independent of GDP (hence the two extreme cases of Portugal and the US with high and low GDPs both having low costs for pizza compared to Sweden. I never really argue that high GDP doesn't make you richer. > I think you're letting your terminology run away from you in your first point. It's true that "Disposable income" doesn't need to cover educational, medical, and other social expenses in Scandinavian welfare states, but those expenses still have to be paid out of tax receipts. I don't see how the Scandinavian governments can get $35000 per person in value out of $25000 per person in income. I agree with you that the pure GDP comparison makes the disposable income point less important. But GDP by itself doesn't seem comparable either. If the Scandinavian population consumes on average more healthcare and education on a per-service not per-dollar basis than the US one, you can have a higher purchasing power just because you buy a higher percentage of Chinese goods produced with low wage costs instead of locally supplied healthcare and education delivered by higher-earning local wages (ever increasing since you are getting richer). But now I am way out of my league. IANAEconomist All this discussion naturally forgets the next point of how much this added GDP/wealth actually drives happiness. From what I saw from Happiness research Europe has actually been obtaining gains in overall happiness while the US has stagnated. One theory was that productivity gains in Europe were used to reduce number of work hours while in the US they were used to increase GDP. Europe would be doing the better tradeoff as both were already at diminishing returns for money but time off had a good return. An interesting theory at least.