I’ve often had this question about GDP. Does the overpriced US healthcare system contribute to it? Not throwing shade, just genuinely curious about GDP’s value as a measure.
Which is why measuring economic health by GDP is utterly useless. It only measures the wellbeing of a minority of Americans -- those that have the most money to spend.
GDP is the worst metric ever devised. Even the guy who came up with it said not to look at it. If we ever fix healthcare the GDP is going to plummet, and everything other than GDP is going to be way better.
No. “Economic value”, that is GDP, means consumption. We are consuming plane trips, and that counts as valuable because we were ready to pay for it.
If I enjoy watching people dig holes and refill it in my backyard, and pay people to do so, this is creating “economic value” because “it bring you pleasure, and you were ready to put a hundred dollar in it, that means it gave you $100 of pleasure” (that's literally how GDP works), it doesn't benefit medical care in any way. And it fact, if I'm paying $1000/h for hole digging, I'm actually harming medical care, because some people would become hole digger instead of nurse / doctors / researchers.
Well, it's necessary to remember what GDP actually measures, and that's the sum of all economic transactions. This does not necessarily make a country richer or improves its quality of life. For example, if the US healthcare system operated on the same level of efficiency as the average European one, the US GDP would instantly shrink by at least 5% (probably quite a bit more). There are lots of things that the US does inefficiently (not always a bad thing, some inefficiency is the price of freedom).
As Robert Kennedy once put it:
"Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans."
Of course, it's not the case that had the US GDP not grown as much, we would instead have had more of an increase in life expectancy. The American population is unfortunately quite unhealthy by global standards, mainly due to lifestyle issues. Besides, with the US life expectancy at 79 years and the world's best at 85, you're not buying much to begin with.
As other commenters are pointing out, it would be nice if there was a better measure of a population's health and happiness; but GDP corresponds to it to a large degree, perhaps up to a certain point of wealth, as you said.
GDP doesn't measure a healthy economy however. It measures aggregate production which can be owned by a small minority of extremely wealthy asset holders while everyone else needs to work double shifts.
I'd want a measure of inequality in whatever function is used to measure happiness.
GDP is such a juiced up a number I would not want to base any metric on it especially how much more debt we could conceivably take on. As an example: Americans are getting healthcare dicked at 18.3% of GDP, erm I mean they are contributing that much to the "economy" in a good way.
I wholeheartedly agree that there is a lot wrong with GDP. It sure isn't directly equivalent to quality of life. BUT when the issue is morbidity and mortality among the working-age population, GDP isn't that bad a metric. And it has the advantage of appealing to greed.
I thought GDP wasn't a real measure? Are we selectively choosing when and if GDP is a real measure, but specifically only when it's beneficial to the side I am arguing for?
Oh absolutely agreed that (US) GDP is a terrible metric that we optimize for. There must be other signals of general economic health that would better serve the greater population.
GDP is a terrible measure of a population's wealth.
As a famous economist said - "the ideal GDP is a chain-smoking terminal cancer patient going through an expensive divorce whose car is totalled in a 20-car pileup"
It is only one measure of success, but it is not misleading. You can just use it and 6 other measures. Then if infant mortality goes way up you can still say let's figure out how to manage that and if it costs some gdp, that's fine. In fact real policy is saying we should spend more of that gdp on prenatal care for example. Doing that will neither make gdp go up or down.
And it's unclear who they're even talking about here. In the democracies politicians hardly talk about it at all. It's usually healthcare, some group is bad, or something should be regulated differently (like energy).
Economic health in general? GDP misses some important details, but it's a much better measure than simply looking at the share prices (not even the market caps) of a small selection of companies operating in a specific sliver of the economy that was very important 100 years ago, but represents a declining fraction of overall US productivity.
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