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35 comments on Robert F. Kennedy on Defining GDP and Some Other Thoughts

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Will Stewart on June 10, 2008 - 11:00am Permalink | Subthread | Comments top

Indeed, there are alternatives to the GDP, such as;

- Human Development Index, combining normalized measures of life expectancy, literacy, educational attainment, and GDP per capita

- Genuine Progress Indicator, measuring whether or not a country's growth, increased production of goods, and expanding services have actually resulted in the improvement of the welfare (or well-being) of the people in the country (includes resource depletion, pollution, farmland and natural parks area and health, etc.)

- Gross National Happiness, a complex set of subjective and objective indicators to measure 'national happiness' in various domains (living standards, health, education, eco-system diversity and resilience, cultural vitality and diversity, time use and balance, good governance, community vitality and psychological well-being)

- Happy Planet Index, a measure of each country's average subjective life satisfaction, life expectancy at birth, and ecological footprint per capita

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urbangardener on June 10, 2008 - 11:27am Permalink | Subthread | Parent | Comments top

GDP: The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

Only if exchanged for dollars. You can transport a child to school via your car in which case this service produeced for your child is NOT included in GDP, or via a taxicab or limo service, in which case it IS included in GDP. You can wash your family's clothes in the laundry room/closet of your home in which case it is NOT included, or you can leave them at the dry cleaners in which case it IS included. You can watch your kids after school which is NOT included, or you can hire a babysitter which IS included. You can cook them a meal in the kitchen [not included in GDP] or you can pay the nanny or the pizza delivery guy or the restaurant to do it instead[included in GDP]. Same service performed, different way of counting it.

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JoulesBurn on June 10, 2008 - 11:47am Permalink | Subthread | Parent | Comments top

If you own your home, the amount that you theoretically would pay in rent is included in GDP. I don't know if the feds inflated figures accordingly during the housing boom, but this would seem to exaggerate things a bit.

More critique from Mish.

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WNC Observer on June 10, 2008 - 1:23pm Permalink | Subthread | Parent | Comments top

Furthermore, if we were to sell everything except the shirts off our backs to other countries - lock, stock and barrel - it would be considered to be a boom year as far as the GDP is concerned.

This is what you get when you only operate with an income statement and are oblivious about the balance sheet. We are depleting and depreciating our national assets and loading up on liabilities like a bunch of manic lunatics.

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35 comments on Robert F. Kennedy on Defining GDP and Some Other Thoughts

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