Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Which is why is not a good indicator...

Government overspending, for example, increases the GDP.



No, GDP is a necessary but not sufficient condition for lavish government services. Yes, there are ways to juice GDP figures without actually having a functioning economy that can support lavish government services, but if your GDP is flat or declining, there's no way you'll be able to continue affording lavish government services.


You can make debt, as many governments have been doing until now...

And debt (spending) ironically will increase the GDP.

If a company keeps on producing goods and doesn't sell them? That increases also the GDP. ( as long as they don't throw them away )

If a government makes debt to buy weapons and increase the army? Look at the Russian +4% GDP just because of that. However, how sustainable is that? The GDP doesn't care at all about that.

The GDP doesn't provide the full picture of how a country is doing economically, but it's good to have a first overview to later do a deep dive into, but so are other "tools".

It's an old tool created 100 years ago, and we keep on using it although the world has changed drastically since then.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: