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by gruez
199 days ago
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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. |
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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.