I mean, more or less. When discussing GDP, you’re discussing things at such a massive scale that only the details of the details filter down. Like the speed of the Earth - obviously it matters, but no one living here is going to notice on their daily walk that the Earth has sped up or slowed down by 100 mph. It’s a tool (ideally) for discerning growth and potential courses of action for large-scale decision-makers, like the government.
But doesn’t GDP also take into consideration real estate and military spending, two things America very much spends dickloads of money on? In an ideal scenario, it would be an accurate measure, but because housing prices are so high and military spending is basically going infinite at this point in the US, you could argue it’s a worthless metric because of how inflated it can be.
Military spending isn’t that much higher as a percentage of GDP than it has been in the past. To increase the GDP by 3.3% by itself, the military budget would have to have over doubled in the last year. As much as we spend on the military, it has not doubled in the past year.
Real estate is a larger part of the economy, but real estate price inflation still would only account for a small amount of that 3.3% increase in GDP. If we assumed 100% of the growth in the past year was pure greed and had no relation to actual supply and demand, it would still only account for under 1% of the 3.3% GDP increase. And as much as housing prices have increased due to greed, you would have to count me skeptical that it’s 100% corporate greed and 0% of the actual demands of the market.
So basically it means nothing to the average person?
I mean, more or less. When discussing GDP, you’re discussing things at such a massive scale that only the details of the details filter down. Like the speed of the Earth - obviously it matters, but no one living here is going to notice on their daily walk that the Earth has sped up or slowed down by 100 mph. It’s a tool (ideally) for discerning growth and potential courses of action for large-scale decision-makers, like the government.
But doesn’t GDP also take into consideration real estate and military spending, two things America very much spends dickloads of money on? In an ideal scenario, it would be an accurate measure, but because housing prices are so high and military spending is basically going infinite at this point in the US, you could argue it’s a worthless metric because of how inflated it can be.
Military spending isn’t that much higher as a percentage of GDP than it has been in the past. To increase the GDP by 3.3% by itself, the military budget would have to have over doubled in the last year. As much as we spend on the military, it has not doubled in the past year.
Real estate is a larger part of the economy, but real estate price inflation still would only account for a small amount of that 3.3% increase in GDP. If we assumed 100% of the growth in the past year was pure greed and had no relation to actual supply and demand, it would still only account for under 1% of the 3.3% GDP increase. And as much as housing prices have increased due to greed, you would have to count me skeptical that it’s 100% corporate greed and 0% of the actual demands of the market.