[Zigurd]

That's an easy question with an obvious practical answer:

Include finance activities that are not out of line with comparables. Comparables: You know. Like the G7. Who do things like we do. Except sometimes they get it done for less. There is no reason to come up with a pure or dogmatic answer. Just a practical one.

Or do you think all medicine/pharma creates value, too? All prisons? All cops? All the military spending?

Some of all that is just self-injury. And you don't have to have a moralizing answer. All you need to know is that other nations get better results with less spending in those areas to know we are pissing that money away, not creating wealth, not improving quality of life.

And when I say disingenuous, I mean don't play stupid. You know very well what financializtion is.

[rayiner]

Again, what does financialization mean other than "finance I don't like?" Comparing to other countries isn't a very objective way to establish what should be included in GDP. It renders your measure useless in analyzing trends that affect the whole G7. It's not like large finance industry profits and exploding real estate prices are unique to the US.

Surely there are some objective measures that can be derived in a principled way?

[Zigurd]

It means one cheeseburger OK. Five cheeseburgers not OK. Simple enough?

The objective measure: Your neighbors with a good quality of life eats one cheeseburger. The one who died, five.

Being vegan would be even better but there is no need to be so... principled.

Do you find that "unprincipled?"

[rayiner]

How do you translate that "principle" into a useful definition of GDP? E.g. When can I include revenues from trading options contracts in GDP?

[Zigurd]

Roughly the same way you measure returns against a market index, or currency value against a weighted "basket" of currencies.

But some things should be obvious: The US vastly overpays for health care. The US is also a far outlier in prison spending. Finance probably isn't the biggest offender in soaking up money while failing to deliver quality of life or material output.