GDP is a big fat lie

[oldtobor]

GDP is a big fat lie.

 

Why do economists still use such a FALSE measure of wealth such as GDP ?

A real measure would be simply the ratio between minimum pay and minimum amount of money needed to rent a one bedroom home. If you plot this ratio wage/rent from 1970 to now you will see that it was once (in the USA) maybe 400/100 dollars and now is 800/400. So it went from 4 to 2 in 30 years, about 2% less each year. The real growth of our wealth is MINUS 2% each year. In Europe and Japan it is way worse maybe MINUS 3%. So the real wealth is constantly DECREASING with no end in sight!

 

Reasons are :

 

1) constant population increase looking for homes (people from poor nations getting in USA and Europe)

 

2) Capitalism getting harsher, companies squeeze all the profits they can from real estate , by renting ever higher and opening and closing offices to squeeze profit from poor people that have to rent or buy homes to work in central cities like chicago tokyo.

 

3) Gas and other resources costs always more.

 

 

We are all getting poorer and there is no end and sight, it is a race to the bottom.

[Skye]

I don't agree with your reasoning that there has been a loss in wealth. Even if there's been a proportionate reduction in the amount of money left over after paying the rent, that doesn't necessarily mean there's less wealth. I agree that GDP shouldn't be the be-al and end-all of economic analysis, but I don't see anyone claiming this. There's two kinds of GDP as it is, and lots of other measures.

[Mokele]

Personally, what I'd like to see is more reporting of the *median* income and such. The average can be strongly weighted by just a few super-rich individuals, but the median will show the income level at which 50% of people earn more and 50% earn less.

[Pangloss]

I always enjoy these "we're all about to die horribly" predictions. Especially the ones that are decades old. (chuckle)

[nameta9]

Actually I think it is a very good indicator. Since the minimum pay and rent are really the 2 factors that count for a person to survive. There are many stories of managers who were once making good and end up flipping burgers. So how is he going to manage ? This is the real bottom line.

 

The numbers are real if not even extremely moderate and conservative. In the US you're closer to 600 dollars a month for a 1 bed home and min. pay is 800 dollars. If you factor in other inflation like health care and other items (gas etc). you get that we are getting poorer at a more extreme rate. I think the point is that GDP seems to give us an impression that the economy "grows" so we are getting richer. In this sense that is totally WRONG AND FALSE! We are getting poorer even if you don't like the idea. Japan and Europe are getting even worse. Try to rent in Tokyo and work minimum wage.... Granted there are many rich and well off people, but as time goes by, they will be sacked.