In a military conflict, the general who determines, when, where, and how a battle will be fought is almost almost victorious. Debate is similar. Whoever defines the terms of the debate has the ability to influence the outcome by skewing the rules one way or the other. But in a nation’s economy policies derived from skewed definitions spell failure.
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ODAY’S polarized debates about the role of government often boil down to a single issue: the size of government compared with the size of the overall economy, as measured in gross domestic product.
This is true on both sides of the debate. One recent proposal featured in The Wall Street Journal argues for a “golden fiscal rule” that the size of government as a percentage of G.D.P. should always be shrinking; liberals frequently cite the higher ratio of government spending to G.D.P. in many European countries.
But such comparisons are not very meaningful: The way we measure government’s role in the economy is limited, inaccurate and unrealistic. If we want to understand how government and the overall economy interact, knowing the size of government tells us little if we are not measuring how government activities contribute to our economy over time.
The problem is that most government goods and services are provided free, so they do not have market prices like, say, mouthwash or financial planning. Standard national accounting — in G.D.P. and related economic indicators — addresses this by assuming that the value of government is exactly equal to what government spends, without any consideration of what government actually produces or of the value of this public output.
In a report released by my organization, Demos, this week, we make the case that, in at least four critical ways, this G.D.P. framework ignores or obscures public value in our economy, leaving us ill equipped to fashion policy to drive national success in the 21st century… [emphasis added]
Inserted from <NY Times>
Over they years, Republicans have skewed the rules so far to benefit billionaires for so long, that even Democrats are now using them, Click through to learn the four ways we need to start measuring the economy to accurately reflect and plan government’s role in it.
9 Responses to “How to Measure an Economy”
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All of our economic problems seem to come from skewed ideologies. In the first stated problem, both parties have confused the issue due to their dependence on donations from the rich corporations. We all know how the other side feels about social safety nets and publicly funded services even though they have proven to be beneficial to our country as a whole. The rich don't think they have to pay to keep roads and birdges in shape and they don't want to pay for protection provided by the police and fire departments. Remember Elizabeth Warren chastising them about that? Third, regulations are to be established only by themselves because they know best. Yeah, right! Apparently, scum doesn't need clean air and water to exist. So, to hell with the rest of us. Lastly, The only way they know how to measure human capital is how much money they can save by employing slave labor and providing no benefits. The masses don't need education to be slaves. They are also to be considered as possible human fodder for future wars which may benefit their bankrolls. This is why birth control and abortion should be eliminated. They need all those bodies.
Okay. Now I will climb off my soapbox and get my breakfast..
Patty, before St Ronnie Ray Gun, it was not as bad, but beginning with him Democrats foolisdhly werfe triangulated to the right, as Republicans hept moving further right. Democrats did not realizing that Republican were redefining the landscape.
Oh, wow, isn't this the truth. One other thing that leaps to my eye is that using these forms of measurement would immediately reveal how ineffective (except for the very few) privatization of ANYTHING is.
But get out your earplugs so that your eardrums won't burst from the conservative cries of "SOCIALISM !!!"
I better bury my head in my cat box for protection!! 😉
Without Government we have anarchy, so making Government Work FOR society is the Least it can do. Right now you cannot prove it is working FOR anything but the Corporations. THAT proves it is Bad Gvernment, no matter the size.
Bingo!
This was a very good article. Too much emphasis is being placed on the immediate costs, and very little on the long term benefits.
Virtually none!
As an example,
"In its first 20 years, the Clean Air Act generated health savings and other benefits valued at $22 trillion, compared with $500 billion in compliance costs. Arguably, net regulatory gains on such a scale should be considered a form of national saving, but they’re not. "
One example of many. How Republicanus/Teabaggerish not including such in calculations! I am sure that they only want to include the regulatory costs to show just how "big" government has become. Get people fired up with incomplete and deceptive information, then pare back the size of government. My guess is that if you asked the average citizen what "big government" means, they probably couldn't answer. And any understanding of all government does and how it does it is completely lost. As an example, if all the social security offices were closed to save on costs, people would have great trouble applying. But that is a false savings and only serves to kick people in the teeth, something at which the Republicanus/Teabaggers are particulary adept.
Mahatma Gandhi said "An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it." Just because Democrats have fallen in line with th Republicanus/Teabaggers on measurement, does not mean it is right. Time to get the tow ropes out and pull them back to the left, to meaningful measurement.
Sorry I didn't get this done last night, but before I did a TC face plant on my keyboard, I had to have a Lona nap.