Elected politicians all over the globe often boast about their economic achievements when their countries’ GDP goes up. And countrymen are impressed.
For example, Trump can pride himself as the USA’s GDP has grown to $21.7 trillion last year, a massive gain that makes the country the most significant economic power in the world.
GDP stands for gross domestic product, meaning the total market value of all the goods and services produced within the country. That gross production includes everything produced and purchased, services generated and bought, and investments made.
When the GDP number of a given year is divided by the population figure of the country, the result is taken as a reflection of the living standard of its citizens.
And this where the GDP gives quite a false impression about the actual well being of a nation. Under its blanket coverage are the stark realities of poverty, homelessness, and even hunger.
These realities are suppressed by governments’ public relations campaign that the country is doing great as per the rising GDP numbers.
GDP is a useful tool creating a false impression that the nation is economically well managed.
Since it does not reflect the true nature of the country’s well being as experienced by all its citizens, GDP needs to go beyond its present valuation of produced goods and services.