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Comment by rapsey | Hacker News Reader

What if the US is simply overvalued? Since covid it is quite staggering how expensive the US has gotten compared to the rest of the world.

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That, and the misconception the European countries are as a group in some sort of hunt to be the global number one, whatever that is.

Europe is not one country, nor is it just the EU, which itself is not a federation (people abroad seem to keep somewhat ignoring this important aspect). For the time being, we're not united under one flag, it's just a symbol of peace really. We're (mostly) happy neighbors, despite all the issues, despite proclamations by EU leaders on CNN.

What do you mean "overvalued"? This isn't measuring the value of stock, it's measuring GDP - the value of what is produced.

The measure is a poor construct. How much of GDP is Visa and Mastercard skimming 3% off the economy? Intuit charging for TurboTax. Healthcare. Collusion of institutional landlord rents using Yieldstar. Verisign. “Economic termites” as Matt Stoller coined.

US GDP, broadly speaking, is the broken window theory. Europe delivers better quality of life, cheaper, based on the objective metrics.

“Price is what you pay, value is what you get.”

Bobby Kennedy on GDP: https://youtu.be/aPgN_fSubKQ?feature=shared

Better said than I ever could have said it. Thank your for sharing, saving this.

GDP is what pays for healthcare, education and social welfare.

If those things aren’t important than yeah, it’s not the right measure.

The fact that you believe GDP pays for these things, and not that GDP reflects the spending demonstrates your uneducated opinion on the topic.

You don't think that GDP reflects national income, from which taxes are levied to pay for those things?

How do you think those things are paid for? Fairy dust?

And you call me uneducated?

Peak HN in this comment!

I’ve often had this question about GDP. Does the overpriced US healthcare system contribute to it? Not throwing shade, just genuinely curious about GDP’s value as a measure.

https://www.reuters.com/business/healthcare-pharmaceuticals/...

https://www.pgpf.org/blog/2023/07/healthcare-spending-will-b...

https://www.cms.gov/data-research/statistics-trends-and-repo...

But that same thing can be said of the GDP in the EU, it's not different. Plenty of actors skimming money off the top, or just government regulations sucking a few percent of GDP here or there (which is likely much worse in the EU).

So you're still comparing like to like.

And your example of 3% "skimming" ignores that most of that fee gets kicked back to consumers.

The GDP measurements include rents. The US happens to have a massive financial operation at its core. It is not necessarily a measure of productive capability.

I don't think you understand the financial industry if you think it's "rents".

The value of the dollar I guess. Compared to the rest of the world the US has insanely large salaries, but also seems to have insanely high costs of living. Comparatively for us Europeans the US is pretty outside of the price range since covid. The value of the dollar is higher than it was compared to the euro, but the exchange rate difference does not seem to be so large as to explain the difference in purchasing power.

Value can be overvalued. Value is what humans invent for themselves (but mostly others).

GDP is precisely one such imagined quantities that could easily be 10x more or less depending on who's doing the valueing.

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