Why do we care about GDP? Isn't Net Domestic Product what's important?

[snot]

This probably shows how much of an economist I'm not, but why do we care about Gross Domestic Product? Isn't it Net Domestic Product that matters, i.e,, the real value we create NET of the costs incurred to create it, any additional debt it collateralizes, etc.?

If a household or company is consistently spending more than it's taking in, no matter how much it's taking in, bankruptcy is inevitable.

Our government has the privilege of printing money, but if net productivity continues to decline, how can our dollars not become worth less?

Part of our privilege has to do with the fact that elites in other countries have run their countries further into the ground than the US – we started out with more value to burn through than they did, for one thing – so that the dollar still looks stronger by comparison; but once elites have pillaged all the real value here as well as elsewhere, there simply won't be anything left that's not already in their hands; at that point, I see no alternative to either revolution or starvation.

I realize the world economy is incredibly complex in many ways, but I don't see how that eliminates the fact that if you're eating more carrots than you're growing, fiat money or no, you're going to run out of carrots.

Reading suggestions welcome as well as any other kinds of explanation – thanks!

[Moostache]

1. All I can do is quote RFK on this...

...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.

REMARKS AT THE UNIVERSITY OF KANSAS, MARCH 18, 1968
Robert F. Kennedy
University of Kansas
March 18, 1968
(Above...ignorant commentary below)...

I believe that looking at Gross Domestic Product as a metric is asinine and counterproductive. The true metric is quality of life and NOT measured from the ivory towers or gilded mansions, but from the bottom-up. From the homeless veteran and hopeless addict's chances for recovery or for a helping hand up. From the least among us, as the Gospels of Jesus make CLEAR and the gospels of prosperity distort and abuse. From the founders to the foundering, from the bottom to the middle and then to the top... The United States of America stands firm as the greatest ideal in human history for governance and self-rule of the people, by the people and for the people.

GDP is simply another way to avoid talking about the ways that product and bounty is distributed and how it is used to help ALL citizens, not just the lucky ones who manage to momentarily rent more material possessions than others (and when they lay dying and their heirs are counting the breaths until they can evict them from renting those possessions, so that they may horde them unto themselves next - then they will know at the last what greed begets - more greed and strife and no eternal glory). The measure of any society for its value to its citizens is not how well protected the privileged are, but how well assisted the lowest are. By that metric, the current USA is the very definition of a 'shit hole' country...but one that can be rescued still.

[LetsGetSmartAboutIt]

2. Interesting question

GPD is kind of an assumed metric, but you are right if it doesn't include the expense side of the equation it isn't very telling.

Maybe it does ?
Maybe it's used as a metric with historic ratios on the expense side ?

I am interested in a good answer to this as well !

[Voltaire2]

3. We have the privilege of controlling the fiat currency of the global system.

Every other nation has to trade in dollars, all other currencies are valued against the dollar.

In addition, and not unrelated, the global safe investment security is our treasury bond.

As has been demonstrated repeatedly, our government can generate huge deficits, our economy huge trade deficits, and that does not result in out of control inflation.

The recent round of inflation was a direct result of post pandemic restart issues, not the giant deficits we incurred supporting our citizens and our businesses.

The crisis the global system is in is not a consequence of currency inflation, it is instead the polycrisis of resource depletion, environmental destruction, social instability and the periodic ‘build out’ stagnation of capitalism.

[eppur_se_muova]

4. GDP is probably a lot easier to measure, and the accuracy of the result can be better relied on. nt