Last month, columnist Jonah Goldberg argued the U.S. economy “is doing amazingly well,” principally on the basis of our large and expanding gross domestic product.
However, is GDP (or for that matter, gross national product) the best measuring stick for the health or benefits of an economy?
In 1968, Robert Kennedy claimed GNP “measures everything in short, except that which makes life worthwhile.” One reason, he said, GNP is inadequate is that it includes the money value of goods and services that do not enhance quality of life: air pollution, cigarette advertising, ambulances, locks on doors, jails, and the loss and destruction of nature. Yet, countries around the world are still obsessed with increasing their GDP/GNP, whatever the cost.
Then, too, what about how wealth stemming from higher economic output is distributed? The Associated Press reported that half the CEOs in their 2024 pay survey made at least 196 times what their median employee earned. With such inequality, should we be surprised that, from 1968 to 2023, the percentage of Americans in poverty has hovered between 10% and 15%, despite the huge GDP growth celebrated by Goldberg? Isn’t reducing poverty more important than numbers of superyachts or voyages to outer space?
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Another limitation of GDP/GNP as success measures is that they don’t reflect debts incurred to juice economic activity. Recently, economic growth has come at a huge cost, in terms of federal borrowing; each American now has a federal government debt exceeding $100,000. Excessive debt can sink any country. Doesn’t an economy’s sustainability matter more than its size?
In a perfect world, the media and politicians would report on and promote mental and physical health rather than fixating on monetary wealth.
