[johnnyanmac]

It doesn't make sense. But that is exactly how policy makers justify how "the economy is doing good!" The GDP was never intended to be used as an indicator of national economic well being; only a simple statistic to measure how much money is exchanged between people.

But it only takes a few examples counter to what a public service should do to show that GDP reliance creates anti-patterns. e.g. rising healthcare costs is good for the GDP while universal healthcare is bad.

[cyberax]

The GDP number is an example of "all models are wrong, some are useful". You'll inevitably oversimplify at least _something_ if you try to boil down the economy to a single number.

GDP is still useful. I don't think there are examples of countries that had drops in GDP without being in deep trouble. It exploits the fact that economies [almost] never change quickly, so when you're looking at just one country, the GDP is a reasonable indicator of the overall state.

Where the GDP sucks is when people try to compare the _rates_ of GDP growth between countries.

[johnnyanmac]

I agree. It's a tool and it has its uses. I simply think this current decade has had a lot if "everything is a nail" approach to it. With gdp being used to hide a massive slowdown and contraction on the labor market and the rest of the "real" economy.

I think the modern indicator is how GDP growth last year would have been almost entirely flat had it not been for the massive amounts of AI spending. Something that as of now (regardless of thoughts of long term job aspects) is only constrainting the material market.

I don't fault the author for that usage because I know they are basically using the same language such policy makers use, and using it to disprove a really odd (but common) usage of GDP as this way to measure long term prosperity.

[rmah]

First, you are correct. However, the reason GDP is used as a proxy metric for economic growth because it's convenient. Doing so does make a few assumptions though, foremost of which is that the structure of the economy will change very little from year to year. If that is so, than a rise in GDP should correspond to a rise in economic prosperity (and by extension wealth). Thus, using GDP change to measure changes in prosperity works (more or less) year by year. but the longer the periods you compare (5 years, 10 years, 20 years), the less meaningful the number becomes.

[disgruntledphd2]

Yup. A substantial proportion of the difference in GDP between the EU and the US relates to how health care values are assigned. In the EU (for public healthcare), it's at cost while in the US it's the final transaction price. It would be interesting to deflate US GDP against the same metric used in the EU to get more accurate figures, but I've never seen such an analysis.